PPX Mining Corp. has designed a test mining and bulk sampling program on the Callanquitas Structure at Igor that will generate real-life mining costs and evaluate different mining techniques for the Callanquitas mineralization. The bulk sampling is intended to validate our resource model by extracting large tonnage samples from specific areas within the block model and also confirm precious metal recoveries indicated by our metallurgical test work. Utilizing the block model from the Company’s previously published resource estimate and the diamond drill hole database, PPX Mining geologists have created a preliminary mine plan that will selectively mine and extract carefully selected blocks from the resource model. These blocks were selected for the initial phase of test mining based on overall grade, relative content of gold and silver, relevance to the metallurgical testing program, and the degree to which the blocks represent the technical characteristics of the entire resource. The Company intends to use the data obtained during the test mining and bulk sampling program to complete a Canadian National Instrument 43-101 Preliminary Economic Assessment (PEA) or Pre-Feasibility Study (PFS) early in 2017. The PEA/PFS will evaluate various development options and define project economics for the possible commercial development of an integrated mining and processing operation focused on the Callanquitas Structure.
The test mining and bulk sampling program will be completed by our mining partner Proyectos La Patagonia S.A.C. (“PLP”). PLP recently received its Certificado de Operación Minera (“COM” or Certificate of Mining Operation) from the Gobierno Regional La Libertad in Peru (Regional Government of La Libertad) for mine development work at Callanquitas. The COM enables PLP to proceed with mining operations at the Igor Project and advance the development of test mining on the Callanquitas structure. PLP has mobilized mining equipment to the site including a dozer, LHD, supply and fuel storage facilities, mechanical support equipment, and personnel. After completing the administrative process required for the Permisos Explosivos (Explosives Permit), work will begin preparing the portals for two underground ramps that will be driven on the 3390 and 3440 levels of the upper portion of the Callanquitas structure. PLP intends to develop underground mining infrastructure could accommodate test mining at rates of up to 350 tonnes per day. Underground mining is expected to commence by October, 2016. Going forward, the area of test mining operations will be referred to as “Mina Callanquitas”.
As previously announced, should the test mining program, metallurgical testing, and/or test milling of gold and silver mineralized material from Mina Callanquitas generate any proceeds from the sale of any metal produced in the test program, the Company and PLP will divide the proceeds 75% and 25% respectively, after deducting the costs of the test mining and any costs related to the metallurgical/milling test program.