The Toroparu Gold-Copper Project lies within Sandspring's 1,000 km2 Upper Puruni Area mining concessions, located in the heart of the Guiana Shield's prolific Mazaruni-Barama greenstone mineral belt; which is host to a number of multi-million ounce gold deposits including Las Cristinas, Las Brisas del Cuyuni, and Aurora.
The Toroparu Gold-Copper Resource, an 8.4 million ounce gold and 536 million pound copper resource, was first discovered in 2007 under a 10 km trend of historic alluvial and saprolite gold workings at Toroparu Hill. To date, 91,878 metres of diamond core drilling results have identified a 2,100 x 300 x 500 metre block of shear hosted mineralization within a metamorphosed section of massive to intermediate volcanics and volcaniclastic sediments in contact with a younger granitic pluton. The Toroparu Gold-Copper Resource remains open in all directions.
On May 9, 2011, Sandspring filed a positive Preliminary Economic Assessment of the Toroparu Gold-Copper Project conducted independently by P&E Mining Consultants Inc. of Brampton, Ontario, Canada ("P&E"). The report "TECHNICAL REPORT, UPDATED RESOURCE ESTIMATE AND PRELIMINARY ECONOMIC ASSESSMENT OF THE TOROPARU GOLD-COPPER DEPOSIT, UPPER PURUNI RIVER AREA, GUYANA (NI 43-101 & 43-101F1, P&E Report No. 208)(the "PEA") can be found on this website andunder Sandspring's profile at www.sedar.com.
The Preliminary PEA envisions a phased open pit mine plan, a 33,000 tonnes per day mill and associated infrastructure with life of mine production of 3.83 million ounces gold and 308 million pounds of copper. Annual production over the first four years of operation is expected to average 310,000 ounces gold and 29 million pounds of copper. Based on the favorable economic assessment of the project, P&E recommends that the Company advances the Toroparu Gold-Copper Project to the Definitive Feasibility stage.
Highlights of the PEA include:
-
Life of mine1 pre-tax net present value (NPV 5%) of $854 M and IRR of 24.5%.
-
Life of mine1 production of 3.83 M oz. Gold and 308 M lb. Copper.
-
3.2 year payback of $617 M pre-production Capital Expenditures.
-
Annual production of 310,000 oz. Gold and 29 M lb. Copper averaged over payback (years 1-4).
-
Annual production of 273,000 oz. Gold and 20 M lb. Copper averaged over open pit mining operations (years 1-13).
-
Cash cost of $317/oz. Au averaged over the first four years of operation (pre-tax), $424/oz. Au averaged over the 13-year open pit mining operations, and $448/oz. Au averaged over the 17-year life of mine (including the cost of processing the low-grade stockpile at the end of the open pit mining operations. All cash costs are net of Copper by-product credits.
-
The environmental permitting process is at an advanced stage.
Mineral Resources
With the release of the PEA, Sandspring reported that an updated mineral resource estimate had been completed for the Toroparu deposit at its 100% controlled Upper Puruni Area concession.The updated mineral resource estimate was prepared by P&E in collaboration with Sandspring personnel.
The updated mineral resource estimate integrates the results of the infill and step-out drilling program that took place during the fourth quarter of 2010 as a lateral and depth extension of the pit outline primarily to the northwest of the historic Toroparu Open Pit as defined in the Technical Report and Updated Resource Estimate, No. 193 of October 13, 2010, available under the Sandspring's profile at www.sedar.com. The updated resource estimate includes 31 new holes drilled in the Toroparu Gold-Copper Deposit area resulting in the first Measured Resources in the project's history (Table I).
The mineralized zones, as defined in the PEA are characterized by 127 deposit specific NQ diamond drill holes totaling 63,614m in the open pit area and along the interpreted mineralized trend drilled from 2006 through December 2010. Mineralization is open in all directions. A total of 46,195 Au and 43,770 Cu assays are now available in the data bank.
-
At a cutoff grade of 0.42 grams of gold equivalent per tonne, in pit measured and indicated ounces of gold, and pounds of copper increased by 596,000 ounces of gold (22%), and 27,700pounds of copper (11%), respectively, when compared to the last estimate released on October 13, 2010.
-
In pit measured and indicated mineral resources stand at 3,236,000 ounces gold, 289 million pounds of copper, and 3,931,000 ounces of Measured and indicated gold equivalent resource 4.
-
In pit inferred mineral resources stand at 4,211,000ounces gold, 200 million pounds of copper, and 4,684,000 ounces of inferred gold equivalent resource 4), a 37 % increase when compared to the last estimate released on October 13, 2010
Table I: Updated Mineral Resource Estimate Comparison Table– October 2010 – May 2011 Technical Reports
Grade Cut Off
AuEq (g/t) |
Tech Report 193 October 13, 2010 |
Tech Report 208 May 5, 2011 |
| Category
| Tonne
(000't) |
Grade (g/t)
Gold
(000'oz) |
Grade (%)
Copper (000'lb)
| Grade (g/t)
Gold Eq. (000'oz) |
Tonne
(000't) |
Grade (g/t)
Gold
(000'oz) |
Grade (%)
Copper (000'lb) |
Grade (g/t)
Gold Eq. (000'oz) |
0.24
(Base Case) |
Measured |
|
|
|
|
29,656 |
0.88
842 |
0.14
89,600 |
1.11
1,063 |
| Indicated |
|
|
|
|
122,213 |
0.68
2,672 |
0.09
240,000 |
0.84
3,287 |
| M&I |
|
|
|
|
151,869 |
0.72
3,514 |
0.10
329,600 |
0.89
4,349 |
| Inferred |
|
|
|
|
214,838 |
0.71
4,929 |
0.05
235,600 |
0.80
5,535 |
0.42
|
Measured |
|
|
|
|
25,242 |
0.99
807 |
0.16
86,400 |
1.25
1,105 |
| Indicated |
98,937 |
0.83
2,640 |
0.12
261,700 |
1.04
3,293 |
89,359 |
0.85
2,429 |
0.10
203,100 |
1.01
2,916 |
| M&I |
98,937 |
0.83
2,640 |
0.12
261,700 |
1.04
3,293 |
114,601 |
0.88
3,236 |
0.11
289,400 |
1.07
3,931 |
| Inferred |
140,054 |
0.76
3,422 |
0.07
216,100 |
0.88
3,952 |
149,539 |
0.88
4,211 |
0.06
200,000 |
0.97
4,684 |
-
The mineral resources in this estimate were estimated 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.
-
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 and are subject to the findings of a full feasibility study.
-
The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
-
The metal prices used in PEAestimate were a February 28, 2011 two-year trailing average as follows: Au US$1,137/oz., Cu $3.13/lb., Au : Cu ratio using 93% Au recovery and 80% Cu recovery was 1.62 Cu to Au. Mining costs were $1.28 per tonne of Fresh rock and $0.87 per tonne of Saprolite. Processing and G&A costs were $8.16/tonne. Pit optimization slopes were 50 degrees.
-
Quantities of gold have been rounded to the nearest 1 thousand and copper to the nearest 100,000 lb.
Potentially Mineable Resources
The PEA was based on a Potentially Mineable Portion of the Mineral Resource (Table II) defined ata 0.50 g/t AuEq cut-off grade for both saprolite and fresh rock.The AuEq cut-off for the Toroparu Gold-Copper Resource was elevated from the resource cut-off grade of 0.24 g/t AuEq to optimize project economics and repayment of pre-production capital expenditures.
Table II: Potentially Mineable Portion of the Mineral Resource
| Grade Cut Off (g/t AuEq) |
Category |
Tonnes
(000's) |
Grade (g/t)
Gold (000'oz) |
Grade (%)
Copper (000'lb) |
Grade (g/t)
Gold Eq. (000'oz)
g/t |
0.5
(Base Case) |
Measured |
24,040 |
1.0
774 |
0.16
82,400 |
1.29
989 |
| Indicated |
67,465 |
0.88
1,897 |
0.12
170,200 |
1.09
2,364 |
| M&I |
91,505 |
0.91
2,672 |
0.13
252,600 |
1.14
3,354 |
| Inferred |
48,749 |
0.81
1,273 |
0.08
88,600 |
0.96
1,505 |
| Stockpile |
39,012 |
0.31
374 |
0.06
11,000 |
0.42
527 |
-
The estimated tonnes and grade shown above are based on a 0.5 g/t Au equivalent mineable resource, 7% mine dilution at a diluting grade of 0.20 g/t and 0.03% Cu, with 2.5% mining losses. The metal prices used were based on a February 28, 2011 two-year trailing average as follows: Au US$1,137/oz., Cu$3.13/lb., Au : Cu ratio using 93% Au recovery and 80% Cu recovery was 1.62 Cu to Au. Mining costs were $1.28 per tonne of Fresh Rock and $0.87per tonne of Saprolite. Processing and G&A costs were $8.16/tonne. Pit optimization slopes were 49 degrees in Fresh Rock and 38 degrees in Saprolite as disclosed in Sandspring's March 22, 2011 press release.
-
The Resources in the table above contain Inferred mineral resources. The reader is cautioned that Inferred Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that value from such Resources would be realized either in whole or in part.
Geology
The Toroparu Gold-Copper Deposit mineralization is predominantly contained in a zone of disseminated gold-copper sulphide mineralization within a 2,100 m long x 300 m wide x 500 m deep subsurface block of poorly stratified fresh, tuffaceous, metavolcanics and derived volcaniclastics. The WNW trending, sub-vertically dipping mineralization assemblage is open along strike, at depth, and contains additional potentially continuous sub-parallel zones of mineralization. The Toroparu Gold-Copper Deposit occurs along the margins of a weakly mineralized copper-molybdenum-enriched porphyritic granodiorite pluton. Gold occurs both as disseminated free grains in metavolcanics and as carbonate and silica alteration fracture fills. Primary copper minerals include chalcopyrite and trace bornite.
Expansion Potential
The historical growth and mineral resources that has occurred at the Toroparu Gold-Copper Project due to continuous drilling from 2008 to 2010 is displayed below. Such rapid resource expansion highlights the continued potential of the Upper Puruni Property. Sandspring's 2011 drill program is designed to actively explore the extent of the mineralization potential in all directions at the Toroparu Gold-Copper Resource and test additional anomalous areas that are defined by Sandspring's systematic regional geologic exploration program of its Upper Puruni Area concessions.
Grade Cut off
(g/t AuEq.) |
Tech Rpt 153
Oct 2008 |
Tech Rpt 186
July 2010 |
Tech Rpt 193
Oct 2010 |
Tech Rpt 208
May 2011 |
| > 2.0 |
664 |
878 |
863 |
1,885 |
| > 1.5 |
1,081 |
1,407 |
1,501 |
2,798 |
| > 1 |
1,764 |
2,303 |
2,930 |
4,397 |
| > Resource Grade |
2,342 |
3,786 |
6,602 |
7,448 |
| Resource Grade |
0.50 |
0.40 |
0.42 |
0.42 |
2011 Drilling and Engineering Outlook
The primary objective of the PEA was the establishment of base case economics for the Potentially Mineable Portion of the Mineral Resource. This was defined by 63,365 metres of deposit specific drilling conducted from December 2006-December 2010 within a 2100 m x 300m x 500 m deep block of mineralization open in all directions.
The next step in the advancement of the Toroparu Gold-Copper Project is a Pre-Feasibility Engineering Report, which will include results from Sandspring's 2011 drill campaigns and advanced engineering studies.
The primary focus of Sandspring's 2011 drill campaign is to define the full extent of both the Global and Potentially Mineable Portions of the Resource. As of July 30 2011, the company has completed 88,780 metres of infill drilling within the 2100 x 300 x 500m Toroparu Gold Copper Resource area and 25,109 metres of step out exploration drilling. This is expected to extend the mineral resource contour, better understand geologic controls of grade and mineralization, and increase the quality of the existing measured, indicated and inferred resources in preparation for a Definitive Feasibility Study, the results of which will be reported over the balance of the year.
Sandspring has commissioned a number of pre-feasibility level engineering studies that are at or near completion, which will advance the engineering knowledge of the project for inclusion into the Pre-Feasibility Engineering Report scheduled for completion in Q1 2012.
These studies include:
-
Additional geologic and resource modeling by SRK Consulting
-
Metallurgical test-work designed to evaluate and optimize alternative treatment methods for maximizing gold recovery on site in doré bars conducted at SGS Lakefield by Jacobs Metals Canada
-
Aerial topographic survey (LIDAR) of mining permit area surrounding Toroparu and power-overland road corridor to Itaballi conducted by Walsh Engineering & Merrick (add full name)
-
Pre-feasibility level pit slope stability and pit dewatering study conducted by Knight Piesold
-
Tailings Storage, Site Facility, and Hydrogeology models conducted by Klohn, Crippen, Berger
Qualified Person and Additional Information
The reports and certifications of the "qualified persons" as defined by National Instrument 43-101 are contained in the PEA on this website or under the company's profile on www.sedar.com
1NI 43-101 Measured and Indicated of 3.5 Million oz. Gold & 330 Million lb. Copper &NI 43-101 Inferred Resourceof 4.9 Million oz. Gold and 236 Million lb. Copper.
2Potentially Mineable Measured and Indicated Gold Resource of 2.7 Million oz. grading 0.91 g/t, Measured and indicated Copper Resource of 253 Million lb. grading 0.13%; Inferred Gold Resource of 1.27 Million ounces grading 0.81 g/t and Inferred Copper Resource of 89 million lb. grading 0.08% within an optimized pit shell cut-off at 0.5 g/t AuEq.