Karmin Exploration Inc. (“Karmin”) is pleased to provide an update on its 30% owned Aripuanã Zinc Lead Silver Project (“Aripuanã”) which is a main near-term growth project of its partner Nexa Resources S.A.
- Recent progress at Aripuanã includes ;
- Nexa has reported 2017 expenditures to the end of the third quarter totaling US$8.4 million including; • US$3.9 million on infill and exploration drilling and
- US$4.5 million on engineering, environmental and geo-mechanical studies.
- Karmin understands that an update to the mineral resource dated December 23, 2016 is expected in the first quarter of 2018.
- Engineering work has started on the feasibility study with completion expected in the second quarter of 2018.
- Nexa; (70% owner of Aripuanã) filed a prospectus on October 10, 2017 for listing on the NYSE & TSX that indicated; • approximately US$210 million of the net proceeds from the sale of Nexa common shares would be used to advance development of Aripuanã as follows;
- 2018 expenditures; US$59 million and
- 2019 expenditures; US$151 million.
- Nexa; (70% owner of Aripuanã) filed a prospectus on October 10, 2017 for listing on the NYSE & TSX that indicated; • approximately US$210 million of the net proceeds from the sale of Nexa common shares would be used to advance development of Aripuanã as follows;
- Financing & Strategic Review; Karmin is advancing discussions with several mining capital groups to arrange the financing for its participation in the development of Aripuanã as outlined by Nexa. Karmin is also reviewing strategic alternatives with the purpose of enhancing shareholder value through a corporate sale or the sale of all or a material portion of Karmin’s assets.
- Karmin has a 30% carried interest in Aripuanã and is not required to contribute to the project costs until one year after the completion of a feasibility study and notification from Nexa that the development of Aripuanã will proceed.
- Karmin has commercial rights proportional to its 30% interest in Aripuanã’s lead, copper silver and gold production. Nexa has rights of first refusal on Karmin’s 30% of the zinc production. As part of its strategic alternatives Karmin would consider the use of its participation rights on the silver and gold production to provide flexibility to potentially raise capital in the form of stream financing for future funding requirements and/or maximizing Karmin shareholder’s value.
TORONTO--(BUSINESS WIRE)--Karmin Exploration Inc. (“Karmin”) (TSXV and the Lima Stock Exchange: KAR) is pleased to provide an update on its 30% owned Aripuanã Zinc Lead Silver Project including significant expenditures of US$8.4 million to the end of the third quarter of 2017.
Aripuanã
The Aripuanã project is owned by Mineração Dardanelos Ltda., a joint venture between Nexa (which holds a 63.3% interest), Milpo (which holds a 7.7% interest) and Mineração Rio Aripuanã Ltda., a subsidiary of Karmin Exploration Inc. (which holds the remaining 30%). Aripuanã is an underground polymetallic project containing zinc, lead and copper, with an anticipated mine life of 24 years and a projected start date in 2020. The estimated aggregate capital expenditure required for this project is US$354.3 million. It is currently estimated that the Aripuanã project, if and when it is fully developed and begins operation, could produce an annual average of approximately 51.0 thousand tonnes of zinc in concentrate, 20.0 thousand tonnes of lead in concentrate, 4.0 thousand tonnes of copper in concentrate, 1.0 million ounces of silver and 25.0 thousand ounces of gold over a 24-year life of mine.
Aripuanã is an underground polymetallic project located in the State of Mato Grosso, Brazil, exhibiting characteristics of a Volcanogenic Massive Sulfide, or VMS, deposit similar to those found at Cerro Lindo. During 2016 and 2017, the Worley Parsons Company was engaged to develop a conceptual engineering study on development of an operation with 5,000 tpd ore mining and processing capacity. The environmental impact study for this project has been submitted to the SEMA/MT and is expected to be in its approval phase by the second quarter of 2018.
Nexa has a strong track record of mine development and expansion in Peru and Brazil including the modular expansion of Cerro Lindo’s processing capacity from an original 5,000 tonnes per day to the current capacity of 21,000 tonnes per day.
Outlook
Mineral exploration activities continue to identify mineralized deposits in the Aripuanã project. The results from these activities indicate there is the potential to increase the mineral resources in the Aripuanã project, supporting continued investment in mineral exploration activities in the project. In particular, the large resource base in the project indicates the potential for a long mine life of up to 24 years. Exploration has identified incremental resource expansion at Arex, Link, Ambrex and Babaçu. In order to execute this expansion, a 28,000 meter drill program is planned in 2017 focused on resource growth. Geological mapping and preliminary exploration activities have helped identify additional, potentially mineralized bodies at Massaranduba, Boroca, Mocoto and Arpa. It may also be possible to selectively mine areas containing high-grade ore during the early years of the life of mine to improve capital returns. It is intended that trade-off studies will be carried out related to the mineral process in order to better identify the potential of the Aripuanã project.
About Karmin
The common shares of Karmin are listed on the TSX Venture Exchange and the Lima Stock Exchange and trade in both markets under the symbol “KAR”. The principal business of Karmin is to acquire, explore and develop resource properties.
