Solitario Exploration & Royalty Corp. (TSX: SLR / NYSEMKT: XPL) (“Solitario”) today announced that it will be initiating a NI-43-101 Preliminary Economic Study (“PEA”) on its Bongará zinc project in northern Peru. This will be the first evaluation to estimate the potential economics of the Bongará project. The project hosts a significant high-grade zinc resource that is open to expansion in all directions. Previously reported (June 23, 2014) NI-43-101 resources are:
| Table 1: Mineral Resource Statement for the Bongará Zn-Pb-Ag Deposit, Peru* | ||||||||||||||||||||
| Category | Metric Tons |
Grade | Contained Metal (millions) | |||||||||||||||||
| Zn | Pb | Ag | ZnEq | Zn | Pb | Ag | ZnEq | |||||||||||||
| Mt | % | % | g/t | % | (lbs) | (lbs) | (oz) | tonnes | (lbs) | |||||||||||
| Measured | 1.43 | 13.02 | 1.85 | 19.3 | 15.45 | 410.0 | 58.3 | 0.884 | 0.221 | 486.5 | ||||||||||
| Indicated | 1.35 | 12.51 | 1.71 | 17.1 | 14.74 | 372.6 | 50.9 | 0.744 | 0.199 | 438.8 | ||||||||||
| Measured + Indicated | 2.78 | 12.77 | 1.78 | 18.2 | 15.10 | 782.5 | 109.2 | 1.628 | 0.420 | 925.3 | ||||||||||
| Inferred | 9.07 | 10.87 | 1.21 | 12.2 | 12.44 | 2,173.0 | 241.5 | 3.554 | 1.130 | 2,487.6 | ||||||||||
*SRK Consulting (U.S.), Inc., June 5, 2014 – Please see Table 1 Notes at the end of this news release
The project is 39%-owned by Solitario and 61%-owned by Compañía Minera Milpo S.A.A. (“Milpo”). A total of 486 core holes totaling 117,280 meters have been drilled on the project. Included in this drilling are 95 underground core holes totaling 15,144 meters that were drilled from a 700-meter long tunnel that Votorantim Metais (Milpo’s 80% owner) completed in 2013. Work to date has demonstrated that Bongará is a high-grade zinc deposit with an average resource grade in excess of 12% zinc equivalent, has a relatively large resource base with excellent expansion potential, and produces a clean high-grade concentrate.
Chris Herald, President and CEO of Solitario, stated, “We are excited to initiate this study as it will bring together a broad array of technical components to provide the first real look at project economics. We are now in the process of selecting an independent consulting engineering firm to initiate and complete the PEA on this high-grade zinc deposit. We hope to complete the PEA before the end of the second quarter of 2017.”
This release has been reviewed for accuracy by Walter Hunt, Chief Operating Officer of Solitario, a “qualified person” as that term is defined in NI 43-101.
Terms of the Bongará Joint Venture
Currently, Solitario owns 39% of the Bongará project and Milpo owns 61%. Since inception of the joint venture in 2006, Votorantim and its 80%-owned subsidiary, Milpo, have funded 100% of project expenditures. Milpo can earn a 70% interest in the project by continuing to fund all project expenditures (except this PEA which is funded by Solitario and does not alter any of the terms of the joint venture) and committing to place the project into production based upon a positive feasibility study. After earning 70%, at the request of Solitario, Milpo has further agreed to finance Solitario's 30% participating interest for construction. Solitario will repay the loan facility through 50% of its net cash flow distributions.
About Solitario
Solitario is an exploration and royalty company traded on the NYSE MKT (“XPL”) and on the Toronto Stock Exchange (“SLR”). Solitario has a joint venture with Minera Milpo (a Peruvian zinc miner) on its high-grade Bongará zinc project in Peru and a 9.97% equity interest in Vendetta Mining. Solitario’s Management and Directors hold approximately 7.6% (excluding options) of the Company’s 38.7 million shares outstanding. Solitario’s cash balance at end of the third quarter of 2016 was approximately US$16 million. Additional information about Solitario is available online at www.solitarioxr.com
Notes to Table 1 extracted from NI 43-101 Report: “Mineral Resources Bongará Zinc Project Amazonas Department, Peru”
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves;
2. Mineral resources are reported to a Net Smelter Return zinc-equivalent (ZnEq%) cut-off grade based on metal price assumptions*, metallurgical recovery assumptions**, mining costs, processing costs, general and administrative (G&A) costs, and NSR factors***. Mining costs, processing, G&A, and transportation costs total US$51.30/t.
i. *Metal price assumptions considered for the calculation of metal equivalent grades are: Zinc (US$/lb 0.95), Lead (US$/lb 0.95) and Silver (US$/oz 20.00),
ii. **Cut-off grade calculations assume variable metallurgical recoveries as a function of grade and relative metal distribution. Average metallurgical recoveries for sulfide and oxide respectively are: Zinc (93.1%, 73%), Lead (84.8, 0%) and Silver (55.6%, 0%)
iii. *** NSR factors for calculating cutoff grades were: ZnEq% = Zn% * 1 + Pb% * 0.74 + Ag g/t * 0.02
3. Resulting cutoff grades used in this resource statement were 4.1% ZnEq for sulfide, 5.0% ZnEq for oxide, and 4.5% ZnEq for mixed material types.
4. Zinc equivalency for reporting in situ contained metal resources above was calculated using: ZnEq (%) = Zn (%) + 1.0 * PB (%) + 0.03 * Ag (g/t).
5. Density was calculated based on material types and metal grades. The average density in the mineralized zone was 2.91 g/cm3 as a function of the zinc and lead sulfide mineral content.
6. Mineral Resources as reported are undiluted.
7. Mineral resource tonnage and contained metal have been rounded to reflect the precision of the estimate, and numbers may not add due to rounding.
Source: Solitario Exploration & Royalty
