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Invicta

In June, 2009, the audit of the Invicta Mine Feasibility Study by The Lokhorst Group Ventures Inc. was completed. The study was filed on SEDAR on July 8, 2009 and is available at http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00003879

Highlights

  • The operating cost for the mine and plant is 28.92 USD/t and the capital cost is USD 65.3 million.
  • The sum of 5-years bulk revenue is USD 600.1 million and net profits are USD 185.3 million, with a gold base price of USD 900/oz and copper base price of USD 2.00/lb.
  • Net Present Value (NPV) at 11% discount rate of the 5-year free cash flow net of debt amortization amounts to USD 159 million in base case scenario.
  • The life of mine (LOM) based on the probable mineral reserve of 7,903,000 t. grading 2.11 g/t Au, 19.1 g/t Ag, .52% Cu, .38% Pb, .35% Zn, is five years with production rates of 3000t/d Year 1, 4000t/d Year 2, and 5000t/d Year 3, 4 and 5.

Stanford Financial Analysis Highlights

  • Year 1 EBITDA/Sales ratio is 72.3.
  • Year 1 EBITDA/Sales ratio is 72.3.
  • Average EBITDA/Net Investment ratio is above 158% during the first year of operation.
  • 5-year Average ROI of 67.8%.
  • Invicta Project’s NPV remains positive at higher discount rates.
  • When price levels are 20% below the base forecast, the NPV for shareholders remains USD 98.90 million and the IRR of the project at 72%.
  • Invicta would remain a profitable project even if the estimated net investment rises up to USD 90 million.
  • For every 5% change in the operating costs of Invicta the NPV changes approximately USD 5 million.
  • When the operating costs are 20% above the estimated value the NPV for shareholders is calculated as USD 137.65 million.
  • The base case on actual metals produced by the average metal prices over the 5 year period were: Gold - $819.54/oz, Silver - $14.48/oz, Copper - $2.59/lb, Lead - $0.76/lb and Zinc - $1.01/lb.
Projected Annual Metals Production

 

Year 1

Year 2

Year 3

Year 4

Year 5

Total

Au (oz)

79,655

108,153

148,394

116,796

47,724

500,722

Ag (oz)

1,021,122

523,225

465,581

582,117

623,007

3,215,052

Cu (lb)

11,829,224

4,661,406

6,060,369

7,366,862

11,553,979

41,471,840

Pb (lb)

4,390,177

8,275,010

151,509

0

1,482,317

14,299,014

Zn (lb)

1,592,771

2,402,677

1,596,386

0

0

5,591,835

Guy Lokhorst, P. Eng., the Senior Geological Engineer at The Lokhorst Group, is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the audit of the Invicta Feasibility Study.

NI 43-101 Invicta Technical Report of 11-20-09 Resource Estimate

Category

Tonnes

Gold

(g/t)

Silver

(g/t)

Copper

(%)

Lead

(%)

Zinc

(%)

Measured

868,000 2.71 31.26 0.69 0.73 0.61
Indicated 9,867,000 1.99 14.74 0.40 0.28 0.27
Measured and Indicated 10,735,000 2.05 16.08 0.43 0.32 0.30
Inferred

14,226,000

0.67 11.20 0.36 0.24 0.15

The updated resource estimate, comprised of sulphide mineralization only, is based on 12,400 metres of diamond drilling completed by Pangea Peru SA during 1997 and 1998, as well as 16,401 metres of diamond drilling and approximately 1,200 metres of underground development completed by Andean American during 2007 and 2008.

Notes:

1. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by the inability to obtain required environmental and other regulatory approval, environmental or operating permits. The estimate may also be materially affected by global economic conditions such as the price of gold and silver, the price of oil and other commodities utilized in the production of gold and silver. Unknown geologic or hydrologic conditions or other unknown factors may materially affect the resource estimates.

2. The quantity and grade of reported Inferred Resources in these estimations are conceptual in nature. 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.

3. Victor Jaramillo, P. Geo., of Discover Geological Consultants Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the resource estimates.

The Measured, Indicated and Inferred Resources have been estimated for the Atenea Structure only, which has been traced for over 2,700 metres of strike length and includes the Dany and Pucamina Structures (see Longitudinal Section below). Mineralization has been at depths of 400 metres below surface, and remains open to both depth and along strike.

The initial property acquisition entailed 5,800 hectares acquired by Andean American in early 2005. On October 20, 2005 Andean American acquired an option to purchase 100% of an advanced exploration project of 3,700 contiguous hectares from a Barrick wholly owned subsidiary, Minera ABX Exploraciones SA. Subsequent to this date, Andean American independently acquired an additional 15,600 hectares bringing the total land position for the project to 25,100 hectares (see Claims Map below).

The Invicta Project is located in West–Central Peru in the department of Lima, province of Huaura, approximately 250 kilometres by road northeast from the city of Lima, Peru. It is accessible by driving on the Pan–American Highway 154 kilometres (1:45 hours), and continuing approximately 96 kilometres on a steep terrain gravel road until the project area is reached (2:00 hours) at an elevation of 3,400 meters above sea level.

The climate is semi–arid most of the year, with little vegetation. The topography is rugged with deep V shaped valleys. Glacial springs supply water approximately 12 to 15 km east of the project. A creek that supplies water throughout the year is located at the Huaura River, located 7.5 kilometres to the west of the property. Trained mining personnel and power supply are available in the town of Sayan, approximately 55 kilometres from the Invicta Camp. The property is located within the limits of two indigenous communities named Paran and Collaray, with a population of approximately 400 inhabitants. Andean Explorations, a subsidiary of Andean American, has signed agreements with both communities that include social support and the hiring of workers.

Click here for Knelson Gravity Solutions report on Metallurgical Testwork at Invicta by Peacocke and Simpson
Charts & Maps
   
Claims 25100 Has 2009
  Invicta Project Structural Model   Longitudinal_Section
2700m Longitudinal Section (PDF)
 
   
3400 Level Adit-Sampling Results
 
3400 Level Adit-Sampling Results (PDF)
   
         
Invicta Photo Gallery      
 

 

 

 

 

Land Panorama
 
Property Entrance
 
Infrastructure
 
Camp
 
Invicta 3400 Level Adit Entrance
 
 
 
 
Back To Top

 

 
 
 
Entry to Adit
 
Inside Adit
 
Adit Map
 
Adit Rock
 
Adit Sample Rock
 
 
 
 

 
 
 
 
Adit Sample Rock
 
Group in Adit
 
In Adit
 
Adit Sample Rock
 
Adit Sample Rock

 

 
 
 
   
 
 
 
 
Drilling in Adit1
 
Adit Sample Rock
 
Drilling in Adit 2
 
Adit Sample Rock
 
Truck in Adit
 
 
 
 
Back To Top
 
 
 
 
Adit Sample Rock
 
Adit Sample Rock
 
Adit Sample Rock
 
Adit Sample Rock
 
Exiting Adit
 
 
 
 

 
 
 
 
Moving Rock
 
Rock Sample
 
Man with Rock Sample
 
Rock Sample 2
 
View of Core Area
 
 
 
   

 
 
 
 
Core Area
 
Two Geologists Examining Core
 
Geologists in Core Area
 
Examining Core
 
Core Sample Boxes
 
 
 
 

 
 

 
 
Tool Room
 
Rock Sample 3
 
Core Sample 1
 
Core Sample 2
 
Core Sample 3
 
 
 
 
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Core Sample 4
 
Core Sample 5
 
Invicta Camp 2
 
Drill Rig Setup
 
DDH at Invicta
 
 
 
   

 
 
 
 
Drilling
 
Rock Outcroppings
 
Crew Setting up
 
Trench Sampling 1
 
Trench Sampling 2
 
 
 
 

             
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