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NOT TO BE DISTRIBUTED OR DISSEMINATED IN THE U.S.
FOR IMMEDIATE RELEASE – October 22, 2007
South American Gold and Copper Company Announces Plans for Restarting
Operations at Pimenton
Toronto, Ontario, Canada - South American Gold and Copper Company
Limited (the”Company”) (TSX-SAG) announces today the planned
restart of operations at its 100% owned Pimenton gold mine. This is
contingent on a substantial portion of the 43,000,000 warrants issued
by the Company and expiring on November 1, 2007, at an exercise price
of Cdn $0.04 being exercised for total proceeds of up to $1,720,000
Canadian dollars.
For a planned investment of approximately US $1,370,000, including
three months of working capital, Pimenton will mine and mill 50 metric
tons of ore per day. The Company has set the following sequence of
goals for Pimenton that will be financed out of production cash flow:
1. Restart exploration and development crosscuts and raises
2. Use drilling to increase resources and reserves at Pimenton
3. Start mine preparation for a 200 tpd operation
4. Start drilling at Tordillo which is close to Pimenton
As audited in March 2005 by John Selters, an independent Qualified
Person under NI 43-101, Pimenton has proven reserves of 13,034 metric
tons assaying 14.4 g/t gold and 1.27% copper, probable reserves of
35,038 metric tons with 14.4 g/t gold and 1.26% copper, and a inferred
resource of 199,270 metric tons running 18.8 g/t gold and 1.6 % copper.
Direct operating costs of a 50 tpd operation at these grades is estimated
at approximately US $285 dollars per ounce. This cost is net of the
Value Added Tax (VAT, charged at 19%) refund discussed below. Monthly
production would be approximately 560 ounces of gold and 14.80 metric
tons of copper, or 700 equivalent ounces of gold, at a gold price
at US $700 per ounce and copper at US $3.00 per lb.
As detailed below, the Company has the reserves, equipment, and people
to start a 50 tpd operation at Pimenton:
• In the mine there are 12,000 metric tons of ore in prepared
stopes ready for extraction with grades ranging from 10.8 g/t gold
and 1% copper, up to 17.5 g/t gold and 1.8% copper.
• The Pimenton plant has a complete crushing section, a 75 tpd
mill and flotation cells that can be put back into service.
• Pimenton has a mine camp and all the necessary mining equipment
(including scoops, mine trucks, compressors, generators, underground
drilling equipment, a new Ingetrol Explorer Jr. diamond drill currently
drilling at the Company’s Bandurrias project) that it needs
to restart production, development and exploration at the mine.
• The Company has ready access to professional consultants in
geology, mining engineering, metallurgy, mine safety, as well as for
all legal, environmental, labor aspects, along with a skilled pool
of experienced ex-Pimenton miners.
• The mine is fully permitted and prior to restarting operations
requires 15 days notice to be given to the Chilean mining authorities.
• Minera Pimenton has US $2,400,000 in Value Added Tax (VAT)
refunds recoverable against sales of concentrates.
Patrick Esnouf, President of the Company stated “With the current
price of gold near a 28 year high, we believe we can quickly put the
mine back into operation and be profitable. While the operating scenario
is a lot smaller than the resource can support, it does have the advantage
of being fundable from the exercise of existing warrants, and thus
not further diluting shareholders’ positions. Further, we will
generate in-house financing for exploration, development and resource
drilling on a property which shows tremendous high grade potential.
In canvassing our backers recently, it has become clear that we need
more proven and probable reserves before we can initiate plans to
go to 200 tpd, which is the model Pincock, Allen and Holt reviewed
for us last year”.
The contents of this News Release have been reviewed and approved by William Hill, P.Eng., a Director of the Company and a Qualified Person under NI 43-101.
South American Gold and Copper Company Limited is a minerals producing, exploration and development company with properties and activities currently focused in Chile.
FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking
statements" within the meaning of Section 21E of the United States
Securities Exchange Act of 1934, as amended. Except for statements
of historical fact relating to the company, certain information contained
herein constitutes forward-looking statements. Forward-looking statements
are frequently characterized by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate",
"estimate" and other similar words, or statements that certain
events or conditions "may" or "will" occur. Forward-looking
statements are based on the opinions and estimates of management at
the date the statements are made, and are subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. These factors include the inherent risks
involved in the exploration and development of mineral properties,
the uncertainties involved in interpreting drilling results and other
ecological data, fluctuating metal prices, the possibility of project
cost overruns or unanticipated costs and expenses, uncertainties relating
to the availability and costs of financing needed in the future and
other factors. The Company undertakes no obligation to update forward
looking statements if circumstances or management's estimates or opinions
should change. The reader is cautioned not to place undue reliance
on forward-looking statements.