Name and Location
Ana Paula gold/silver project, Mexico.

Client
Newstrike Capital.

Project Description
The Ana Paula project has measured and indicated resources totaling 41.01-million tonnes, grading at 1.469 g/t of gold equivalent, 1.41 g/t of gold and 5.37 g/t of silver. Indicated resources have been measured at 1.9-million tones, grading at 1.233 g/t gold equivalent, 1.113 g/t of gold and 10.85 g/t of silver.

The preliminary economic assessment (PEA) proposes the development of a greenfield gold/silver deposit with openpit mining and a gravity/flotation/carbon-in-leach (CIL) process plant, with a production rate assumed at 6 000 t/d.

The PEA forecasts an 8.2-year mine life and a life-of-mine strip ratio of 2.60 to 1. A total of 17.8-million tonnes of mineralised resource could be mined and processed, with 33.6-million tonnes of waste and 12.5-million tonnes of capitalised waste. Some of the waste rock will be stockpiled and an undetermined portion may be reclassified as a resource at a later date should metallurgical testwork support economic viability.

Throughout the life-of-mine, an estimated 957 000 oz of payable gold and two-million ounces of payable silver will be produced at an average head grade of 2.24 g/t of gold and 6.89g/t of silver.

The flowsheet selected for Ana Paula consists of a tertiary crushing system, followed by ball-mill grinding and gravity recovery, flotation, disposal of flotation tails, leaching of a combined gravity and flotation concentrate, and recovery of precious using the CIL method.

Net Present Value/Internal Rate of Return
The base-case scenario envisages a pretax net present value at 5% of $405.3-million and an internal rate of return of 47.5%, with a two-year payback.

Value
Initial capital costs are estimated at $163.9-million. Mining will be contracted, so no capital is included for mining equipment.

Duration
Not stated.

Latest Developments
Newstrike believes the economics concluded by the PEA provide a strong incentive for continued geotechnical, metallurgical and engineering studies.

It contends that there are excellent opportunities to refine various project elements and to improve the economics through gold recovery optimisation.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Newstrike Capital, tel +1 604 806 6110, fax +1 604 806 6112 or email info@newstrikecapital.com.