TORONTO, ONTARIO--(Marketwire - July 16, 2012) - Colossus Minerals Inc. (the "Company" or "Colossus") (TSX:CSI)(OTCQX:COLUF) is pleased to announce that Lyle Pritchard General Manager of Serra Pelada has been appointed as Vice President, Operations. Since joining Colossus he has lived up to his reputation as a highly-motivated and safety-minded mine operations manager with practical and progressive experience in all aspects of management and underground mining methods, as well as an experienced operator in challenging underground mining conditions. He has proven a strong leader of the operating team. Mr. Pritchard brings a wealth of experience from his years at Barrick's Bulyanhulu Mine in Tanzania and more recently at Goldcorp's Marlin Mine in Guatemala and AuRico's El Cubo Mine in Mexico. As part of this management realignment, Paulo de Tarso Serpa Fagundes, Chief Operating Officer, has left to pursue other interests and the Company wishes to thank him for his hard work and dedication in developing the Serra Pelada Project.
In addition to the promotion of Mr. Pritchard, the Company is also pleased to provide a status of development at its 75% owned Serra Pelada Gold-Platinum-Palladium Project. The Serra Pelada Project is a joint venture between Colossus and Cooperativa de Mineração dos Garimpeiros de Serra Pelada ("COOMIGASP") located in the State of Pará, Brazil.
- Additional metallurgical tests on higher grade Central Mineralized Zone ("CMZ") composites have achieved overall (gravity + flotation) recovery rates of approximately 97% gold, 80% platinum and 83% palladium.
- Latest metallurgical tests confirm a saleable concentrate can be produced with a final PGM grade (Pt, Pd, Au), before calcining, of 66.7 grams per tonne.
- A new and deeper part of the CMZ has been chosen for the bulk sample thus providing a larger horizontal and vertical panel from which to extract a more representative sample.
- Dewatering progressing well with ground water being drawn down more than 150 metres in localized areas.
Claudio Mancuso, President and Chief Executive Officer commented, "The latest metallurgical results are very encouraging as they re-affirm the robust metal recoveries and the ability to produce a saleable concentrate. Development activities are quickly gathering steam and, since his arrival in April, Mr. Pritchard has proven that he is eminently capable of bringing Serra Pelada into production in a safe, timely and cost-effective manner. Mr. Pritchard richly deserves this promotion and has the full support and confidence of the senior management and the board of directors as he advances the mine to production. We would also like to thank Paulo de Tarso Serpa Fagundes for his service to the Company and wish him well in his future endeavours."
The metallurgical update announced on April 10, 2012 disclosed results of gravity and flotation work conducted on samples from drill hole SPD-113 (74.40 metres at 31.17 g/t gold, 3.02 g/t platinum and 6.78 g/t palladium - please refer to news release of September 7, 2011), an interval with relatively low platinum group metals ("PGM") grades compared with other assay results previously disclosed.
More recently, further flotation testing has focused on a series of new metallurgical composites, compiled from samples of higher grade sections of mineralization from drill hole SPD-120 (74.35 metres at 15.45 g/t gold, 4.54 g/t platinum and 7.04 g/t palladium). This work has been designed to test the response of variability samples to the baseline flotation process and results from the first test on a higher grade Master Composite have verified the anticipated improvement in metallurgical performance.
The Master Composite, consisting of material from 47 samples from SP-120, had higher grade assays than previous metallurgical samples, as given in table 1 below:
Table 1 - Comparison of Composite Head Grades
|New 2012 Master Comp
|2011 C2 Comp
|2011 C3 Comp
As with previous testing, the new 2012 composite was subjected to gravity recovery prior to flotation testing. Gravity test results determined a gravity recovery of 76.2% gold which is in line with expectations and previously reported results. As with all previous testwork, gravity recovery of PGM's was low with 4.8% Pt and 9.5% Pd recovery to the gravity concentrate.
A sub-sample of gravity tails from the above work was subsequently tested using the Serra Pelada baseline flotation flowsheet. The metallurgical balance for this flotation test is given in table 2 below:
Table 2 - Test F-39, Metallurgical Balance
|Flotation Feed (Gravity Tails)
These results represent a significant improvement in PGM grade and recovery over previous work on lower grade samples. In particular, the flotation concentrate grade of 66.7 g/t (Pt+Pd+Au) also carries 18% carbon, which Colossus anticipates could be calcined on-site to further improve PGM grade and reduce transportation costs.
The flotation test described above was subsequently repeated on a second, larger sample of the Master Composite in order to prepare sufficient flotation concentrate for calcination and arc furnace testing. Results of this second test were very similar - providing further confidence in the result.
Normalizing the flotation recoveries to account for metal recovered by gravity, the distribution of metal recovery can be summarized as follows:
Table 3 - Test F-39, Metallurgical Balance
These latest results add considerable weight to the assumption that overall recoveries of 92-96% gold, 74-78% platinum and 67-71% palladium will be met or exceeded using a gravity plus flotation process.
Processing plant construction is progressing on schedule. While 90% of the site earthworks had been previously completed, additional terracing and slope stability work is almost complete and process plant civil construction is expected to begin imminently. Critical equipment has begun to arrive on site with the primary and secondary crushers now delivered. Manufacture of gravity concentrators, intensive leach reactors and electrowinning cells is complete and this equipment is currently being prepared for transportation to site.
Andy Holloway, P.Eng, Principal Process Engineer at AGP Mining Consultants, is a qualified person under National Instrument 43-101 and is responsible for the Company's metallurgical program and results and has verified the related content disclosed herein.
Primary decline development is progressing well with steady improvements in daily development rates since the arrival of Mr. Pritchard. As a result, the Company has decided to target new deeper areas for the bulk sample. With the arrival of Mr. Pritchard in April, the Company has introduced new procedures for periodic re-evaluation of mine design. During the most recent examination and revision process at the beginning of July, the Company decided to progress approximately 150 metres past the previously announced location for the bulk sample to open multiple working faces from which to take a more representative bulk sample. This method simplifies the step of moving from bulk sample to production and saves vertical development footage and costs. The Company has decided to delay the extraction of the bulk sample by 30-45 days to allow for additional development required for the new bulk sampling strategy. The Company is approximately 300 metres from the new bulk sample locations and thus is still on target to extract the bulk sample in the latter half of 2012.
As development progresses toward the CMZ, the Company continues to encounter better than expected ground conditions and water inflow continues to be manageable.
During July, the Company also took delivery of a new Sandvik DS-311 rockbolter and three new Sandvik LHD-307 scoops. The arrival of this new equipment will help improve cycle times and reduce maintenance downtime. This additional equipment availability was also considered when deciding to change the bulk sample locations. Secondary development is progressing well with the excavation of a permanent underground pumping station complete. Installation of pumps is expected to begin shortly.
Dewatering is on schedule with eight of ten available wells now in full operation. Of the remaining two wells, one is currently off line for scheduled maintenance and one is currently not in use due to the water level in the well being below the level of the pump; almost 150 metres below surface. The eight wells are now pumping approximately 550 cubic metres of water per hour which is sufficient to provide adequate dewatering for bulk sample extraction. During the next six months, the Company will complete the commissioning of an additional five wells which will provide further dewatering capability for the production phase. Permanent infrastructure construction related to the dewatering system was also recently completed with the installation of an independent electrical generation system to power the dewatering pumps.
During the quarter, the Company continued to gather information regarding the connectivity of the water in the historic pit and the ground water. While the Company is confident that there is no connectivity between the two water systems, management has decided to draw down the water level in the historic pit by approximately twenty metres in order to mitigate this residual risk. The Company intends to leave approximately three to five metres of water in the historic pit. All environmental permits for reducing the water level have been obtained and pumping has begun.
Colossus is a development-stage mining company focused on bringing its Serra Pelada project into production. Serra Pelada, located in the mineral prolific Carajas region in the State of Pará, Brazil, is host to one of the highest grade gold and platinum group metals deposits in the world. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Coverage of this famous mining rush by 60 Minutes can be viewed by following the link below. Colossus Minerals shares, warrants and notes trade on the Toronto Stock Exchange (TSX) under the symbols CSI, CSI.WT.A and CSI.NT respectively and in the United States its Common Shares trade on the OTCQX under the symbol COLUF. The Company is headquartered in Toronto, Canada.
CAUTIONARY STATEMENT REGARDING FORWARD‐LOOKING INFORMATION
Forward-looking statements in this press release include statements regarding the timing and nature of future exploration and development programs that are dependent on projections that may change as drilling continues, or if unexpected ground conditions are encountered. The Company does not currently have any mineral properties that are in production or that contain a reserve as defined by National Instrument 43-101. In addition, areas of exploration potential are identified which will require additional drilling to determine whether or not they contain similar mineralization to areas that have been explored in more detail. Significant additional drilling is required at Serra Pelada to fully understand system size.
Except for statements of historical fact relating to Colossus, certain statements in this press release relating but not limited to the Company's exploration and development plans, activities and intentions, constitute "forward‐looking information" within the meaning of the Securities Act (Ontario) or "forward‐looking statements" within the meaning of the United States Private Litigation Reform Act of 1995. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable. Forward‐looking statements are frequently characterized by words such as "target", "plan", "expect", "project", "intend", believe", "anticipate" and other similar words, or statements that certain events or conditions "appear to", "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. The factors include but are not limited to risks related to the joint venture operation, actual results of exploration activities, the inherent risks involved in the exploration and development of mineral properties, changes in project parameters as plans continue to be refined, delays in obtaining government approvals, the uncertainties of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties inherent to conducting business in Brazil and the rest of Latin America, the availability of equipment and supplies, unexpected adverse climate conditions, the reliance on only a few key members of management, as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recent Annual Information Form filed with Canadian provincial securities regulatory authorities and other regulatory filings which are posted on SEDAR at www.sedar.com. Unless required by law, Colossus 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.