Huakan International Mining Inc.: Updated Mineral Resource Doubles Indicated Tonnes on Main Zone and Adds Yellowjacket Zone at the J&L Property
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/18/12 -- Huakan International Mining Inc. (TSX VENTURE: HK) (the "Company") is pleased to announce that P & E Mining Consultants Inc. ("P&E") has completed an updated independent National Instrument 43-101 mineral resource estimate on the Company's 100% owned J&L property located near Revelstoke, British Columbia. The updated resource includes the recently completed Phase II drilling program, which had the primary goal of increasing the Indicated category of resources. The program was successful by more than doubling the Indicated tonnes on the Main Zone. The updated mineral resource estimate replaces the 2011 mineral resource estimate for the gold-silver-lead-zinc bearing Main Zone and includes the zinc-silver-lead bearing Yellowjacket Zone for the first time.
The updated Main Zone mineral resource of 3.95 million (M) tonnes in the Measured and Indicated Categories and 4.34 M tonnes in the Inferred Category is a significant increase over the 2011 Main Zone estimate of 2.37 million (M) tonnes in the Measured and Indicated Categories and 4.54 M tonnes in the Inferred Category.
The updated Main Zone mineral resource contains 722,000 oz Au in the Measured and Indicated Categories and 580,200oz Au in the Inferred Category compared to 518,400 M oz Au in the Measured and Indicated Categories and 757,500 oz Au in the Inferred Category from the 2011 estimate.
The updated Main Zone mineral resource contains 7,179,000 oz Ag in the Measured and Indicated Categories and 8,057,000 oz Ag in the Inferred Category compared to 5,096,700 oz Ag in the Measured and Indicated Categories and 9,997,800 oz Ag in the Inferred Category from the 2011 estimate.
The Yellowjacket resource contains 1.0 million (M) tonnes in the Indicated Category with 2,068,000 oz Ag in the Indicated Category.
The updated J&L mineral resource is presented below at a $110/tonne in-situ NSR cut-off value:
Main Zone
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Au Au Ag Ag Pb Zn
Classification Tonnes (g/t) (ozs) (g/t) (ozs) (%) (%)
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Measured 1,313,000 6.37 268,800 65.1 2,747,000 2.26 4.22
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Indicated 2,640,000 5.34 453,200 52.2 4,432,000 1.78 3.23
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Measured & Indicated 3,953,000 5.68 722,000 56.5 7,179,000 1.94 3.56
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Inferred 4,337,000 4.16 580,200 57.8 8,057,000 1.82 2.72
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Footwall Zone
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Au Au Ag Ag Pb Zn
Classification Tonnes (g/t) (ozs) (g/t) (ozs) (%) (%)
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Inferred 363,000 3.65 42,500 25.4 296,000 0.55 0.51
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Yellowjacket Zone
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Au Au Ag Ag Pb Zn
Classification Tonnes (g/t) (ozs) (g/t) (ozs) (%) (%)
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Indicated 1,003,000 0.21 6,900 64.1 2,068,000 2.77 9.08
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Inferred 35,000 0.35 400 81.9 91,000 3.18 6.26
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1. Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources may
be materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing, or other relevant issues.
2. Confidence in the estimate of Inferred Mineral Resources is insufficient
to allow the meaningful application of technical and economic
parameters. There is no guarantee that all or any part of a mineral
resource can or will be converted into a mineral reserve.
3. The mineral resources in this estimate were calculated using the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM
Standards on Mineral Resources and Reserves, Definitions and Guidelines
prepared by the CIM Standing Committee on Reserve Definitions and
adopted by CIM Council.
4. The following parameters were used to derive the NSR block model values:
-July 2012 US$ two year trailing avg. metal prices: Pb $1.02/lb, Zn
$0.97/lb, Au $1,538/oz, Ag $31.38/oz
-Exchange rate of US$0.95 = CDN $1.00
-Main Zone Process recoveries of Pb 80%, Zn 72%, Au 92%, Ag 88%
-Yellowjacket Process recoveries of Pb 80%, Zn 85%, Au 92%, Ag 70%
-Smelter payables of Pb 95%, Zn 85%, Au 96%, Ag 91%
-Refining charges of Au US$15/oz, Ag US$0.50/oz
-Concentrate freight charges of C$65/t and Smelter treatment charge of
US185/t
-Mass pull of 5% and 8% concentrate moisture content.
5. The NSR cut-off of CDN$110 per tonne was derived from $75/t mining,
$25/t processing and $10/t G&A.
The updated mineral resource estimate was prepared under the supervision of Wayne Ewert, P.Geo. of P&E, who is the independent Qualified Person. The mineral resource estimate involved 3D modeling methods and parameters, and statistical and grade continuity analyses. Gemcom GEMS modeling software was used for the 3D block model and subsequent grade estimates. Composite grade capping was used to restrict the influence of statistical outliers during Inverse Distance Squared (1/d2) interpolation of block grades. A total of 311 drill holes have been completed on the property. The resource estimate utilized a total of 428 bulk density measurements determined on site by the Company utilizing the wet immersion technique.
The 2012 forty-five hole drill program was under the supervision of Paul Cowley, P.Geo., the Company's Qualified Person and VP Exploration. BQTW-sized core samples were cut in half and sent to ALS Laboratory Ltd. in Kamloops/North Vancouver, BC. Samples were assayed for gold by fire assay (50 gram charge) as well as assayed for silver, lead and zinc. The Company inserted standards, blanks and duplicate samples throughout the sample sequence as quality control checks.
Company VP Exploration, Paul Cowley, P.Geo. said, "The Phase II drill program was a resounding success by more than doubling the Main Zone Indicated tonnes. Additionally, we added another million tonnes of Indicated from the Yellowjacket. With the combined Measured and Indicated tonnes from both Main Zone and Yellowjacket, the Company will be considering advancing the project to the Pre-Feasibility stage."
J&L Resource Expansion Potential
The J&L project is the Company's flagship property, which it continues to aggressively advance. The drilling to date indicates that the Main Zone may continue for a strike length of at least 1.4 kilometres and in the downdip direction for at least 800 metres. There remains good potential for additional mineral resources on the Main Zone, which Huakan believes remains open in the down dip direction and along strike to the northwest and southeast. A graphical representation of NSR and thickness will be posted on the Company website to demonstrate current drilling coverage The Yellowjacket Zone is a series of zones which lie sub-parallel to and in the immediate hangingwall to the Main Zone. The Yellowjacket Zone had until now, a historic resource dating back to 1991. The Company will be conducting further metallurgical test work to enhance the recommended processing flowsheet.
Wayne Ewert, P.Geo. of P&E and Paul Cowley, P.Geo., VP Exploration for the Company, are the Qualified Persons as defined in National Instrument 43-101, who have reviewed and approved the contents of this press release.
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION
Certain of the statements made and information contained herein may contain forward-looking statements or forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or forward-looking information include, but are not limited to, statements concerning: the J&L Main Zone and Yellowjacket Zone resource estimate and the Company's exploration plans. Forward-looking statements or information include statements regarding the expectations and beliefs of management. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.
Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to: completion of announced transactions, history of losses; requirements for additional capital; dilution; loss of its material properties; interest rates increase; global economy; limited history of production; speculative nature of exploration activities; periodic interruptions to exploration, development and mining activities; environmental hazards and liability; industrial accidents; failure of processing and mining equipment; labour disputes; supply problems; commodity price fluctuations; uncertainty of production and cost estimates; the interpretation of drill results and the estimation of mineral resources and reserves; legal and regulatory proceedings and community actions; title matters; regulatory restrictions; permitting and licensing; volatility of the market price of common shares; insurance; competition; hedging activities; currency fluctuations; and loss of key employees. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada.
Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Huakan International Mining Inc.
Paul Cowley, P.Geo.
VP Exploration
(604) 694-2344
Huakan International Mining Inc.
Wilson Jin
President
(604) 694-2344
www.huakanmining.com
