TORONTO, ONTARIO (AMEX: MRB) is pleased to report that gold and
silver production at its Cerro San Pedro mine in Mexico increased
56% and 35%, respectively, relative to the third quarter 2007. For
the year, the Cerro San Pedro mine produced 26,799 ounces of gold
and 406,592 ounces of silver. Approximately 53% of the gold and 48%
of the silver were produced in the fourth quarter demonstrating
that the mine is on track to achieve full and steady-state
production during 2008.
Key performance indicators for the fourth quarter 2007 and since
production commenced in May, are presented below, along with
production and cost guidance for 2008.
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Quarter Ended December 2007 Year to Date December 2007
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Actual Budget Budget Actual Budget Budget
Variance Variance
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Ore Tonnes to Pad
(000's) 2,291 2,007 14% 6,536 6,689 (2%)
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Gold Grade
(gm/tonne) 0.56 0.59 (5%) 0.51 0.54 (6%)
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Silver Grade
(gm/tonne) 18.14 21.41 (15%) 23.91 27.75 (14%)
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Poured Gold Ounces 14,103 17,324 (19%) 26,799 30,000 (11%)
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Poured Silver Ounces 194,431 187,839 4% 406,592 400,000 2%
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Cash Cost per Ore
Tonne $5.17 $4.49 15% $5.27 $5.25 0%
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- The Company produced 14,103 ounces of gold and 194,431 ounces
of silver in the fourth quarter. Gold production targets in the
fourth quarter were impacted by the Company's decision to use Cell
3 for bulk metallurgical tests rather than for the leaching of
fresh ore. As a result, the additional ore stacked on Cell 1
required extended leach time. By the end of December the pregnant
solution grades were back to budgeted levels.
- Cash costs per tonne of ore for the fourth quarter were $5.17,
15% above budgeted levels due to accelerated waste mining rates.
Cash costs on an annualized basis met projections.
- Ore production to the pad during the fourth quarter was
approximately 2.3 million tonnes, exceeding forecasts by nearly
300,000 tonnes.
- The Cerro San Pedro processing plant operated at 100% capacity
in the fourth quarter. The plant is currently producing
approximately 200 ounces of gold per day. Roughly 150,000 tonnes of
ore are being placed under leach each week.
- Gold and silver sales in the fourth quarter, unaudited,
totaled $10.4 million and $2.6 million respectively. The Company
sold 13,221 ounces of gold and 184,576 ounces of silver at an
average realized price per ounce of $790 and $14.21
respectively.
- The leach pad at Cerro San Pedro held approximately 6.6
million tonnes of ore at December 31, 2007 containing an estimated
108,400 ounces of gold and 5.1 million ounces of silver.
Approximately 44,200 ounces of gold and 853,900 ounces of silver
are estimated to be recoverable. Recovery rates appear to be
consistent with estimates for the type of ore on the leach pad and
the leach duration. The recovery period is estimated to be five
months for gold and six months for silver. Actual recoveries have
been 61% for gold and 48% for silver, which is in line with the
recovery curve projections.
To view charts displaying amounts of troy ounces poured, please
visit the following link:
http://www.ccnmatthews.com/docs/mr108.jpg
2008 Guidance
- The mine is expected to produce 80,000 ounces of gold and 1.35
million ounces of silver during 2008 at a cash operating cost, net
of silver, of $263/ounce of gold, based on the December 31, 2007
closing price for silver of $14.80 per ounce.
- Mine production is expected to be approximately 8.0 million
tonnes of ore and 13.8 million tonnes of waste during 2008,
resulting in a waste-to-ore ratio of approximately 1.7:1. This
figure is consistent with the Life of Mine (LOM) plan for 2008. The
LOM ratio is 1.2:1.
- Cash cost per tonne of ore mined for 2008, our first full year
of operation, is expected to be $5.40, exceeding the LOM plan for
2008 by only 12%. This modest increase is due to mining and general
and administrative costs.
- Capital costs for 2008 are estimated at $6.7 million and will
include the construction of Phase 2 of the leach pad, which has
been advanced to 2008 from 2009 as originally scheduled due to
increased mining rates.
- A three-year lease agreement with the Company's current
equipment provider, Desarrolladora de Proyectos Hidroelectricos,
S.A. DE C.V. was executed on December 19, 2007. The agreement came
into effect on January 1, 2008 and requires all maintenance to be
performed by the equipment provider. The leased fleet is operated
by Minera San Xavier personnel, Metallica's wholly owned operating
subsidiary.
- The Cerro San Pedro mine exited 2007 with a stellar safety
record. There were no employee Lost Time Accidents (LTA) and only
one LTA recorded by the contractors, an exceptional accomplishment
for a startup operation. Our employees are commended for achieving
this goal.
Conference Call
The Company will be host a conference call to discuss year end
2007 results and provide further operational updates on Tuesday,
March 18, 2008. Details of the call, including times and contact
numbers, will be released when they are finalized.
ON BEHALF OF THE BOARD OF DIRECTORS
Richard J. Hall, President and CEO
INFORMATION IN THIS NEWS RELEASE THAT IS NOT CURRENT OR
HISTORICAL FACTUAL INFORMATION MAY CONSTITUTE FORWARDLOOKING
INFORMATION OR STATEMENTS WITHIN THE MEANING OF THE UNITED STATES
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND APPLICABLE
CANADIAN SECURITIES LEGISLATION. IMPLICIT IN THIS INFORMATION,
PARTICULARLY IN RESPECT OF STATEMENTS AS TO FUTURE OPERATING
RESULTS AND ECONOMIC PERFORMANCE OF THE COMPANY, AND RESOURCES AND
RESERVES AT THE COMPANY'S MINERAL PROJECTS, ARE ASSUMPTIONS
REGARDING PROJECTED REVENUE AND EXPENSE, GOLD, SILVER AND COPPER
PRICES, AND MINING COSTS. THESE ASSUMPTIONS, ALTHOUGH CONSIDERED
REASONABLE BY THE COMPANY AT THE TIME OF PREPARATION, MAY PROVE TO
BE INCORRECT. READERS ARE CAUTIONED THAT ACTUAL RESULTS ARE SUBJECT
TO A NUMBER OF RISKS AND UNCERTAINTIES, INCLUDING RISKS RELATING TO
GENERAL ECONOMIC CONDITIONS AND MINING OPERATIONS, AND COULD DIFFER
MATERIALLY FROM WHAT IS CURRENTLY EXPECTED. THE COMPANY DISCLAIMS
ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS
OR OTHERWISE.
Contacts: Metallica Resources Inc. Richard J. Hall President and
CEO (303) 796-0229, Ext. 1
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