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VANCOUVER, British Columbia, Jan. 21, 2014 (GLOBE NEWSWIRE) -- Huakan International Mining Inc. (TSX-V:HK) ("Huakan International" or the "Company") reports that, as a result of a review by the British Columbia Securities Commission (the "BCSC"), the Company is issuing the following news release to clarify its technical disclosure as follows:
Non-compliant Disclosure of Preliminary Economic Assessment (PEA)
On page 11 of its corporate presentation entitled "Developing Projects in B.C." dated December 9, 2013 (the "Corporate Presentation") and under the J&L project page of the Company's website, the Company referred to the results of the April 2012 PEA based in part on Inferred Resources, which omitted prominent cautionary language required by National Instrument 43‑101 –
Standards of Disclosure for Mineral Projects ("NI43‑101").
Accordingly, the Company has corrected this omission in its Corporate Presentation and website by adding the following language where relevant to its Corporate Presentation and website. "
This PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves; there is no certainty that the results of the PEA will be realized.Resources that are not reserves do not have demonstrated economic viability."
Highlights of the April 2012 Base Case J&L PEA Repeated
The Company restates the positive results of its April 2012 PEA which remains current and unchanged from its previous disclosure as follows. For more detailed disclosure of the PEA, please refer to the Company's April 24, 2012 News Release.
Net Cash Flow of $ 751 million, Net Present Value ("NPV") discounted at 8% of $ 202 million; Internal Rate of Return ("IRR") of 21% after tax or 26% pre-tax – at metal prices of US$1320/oz gold, US$22/oz silver, US$0.98/lb zinc, and US$0.94/lb lead
Mine Life – 9 years
Mine Production Rate – 1,500 tonnes per day ("tpd") or 540,000 t/y
Capital Expenditures – $ 264 million (Initial) and $ 35 million (Sustaining)
Average Life of Mine Operating Costs – $113 per tonne
Payback is 4.6 years (undiscounted) or 5.9 years (discounted at 8%)
Sales of dore (727,000 oz gold, 1.0 million oz silver) account for 61% of net revenue. Lead concentrate sales (containing 188,000 oz payable gold, 7,789,000 oz payable silver and 176.2 million lbs lead) contribute 31% of revenue, with the balance of 6% attributable to the sale of zinc by-products.
This PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves; there is no certainty that the results of the PEA will be realized.Resources that are not reserves do not demonstrate economic viability.
It should be emphasized that the April 2012 PEA was based on an earlier resource estimate, dated May 2011. Subsequently, as a result of its Phase 2 drilling, the Company produced a superseding resource dated September 2012 which postdates the PEA. The September 18, 2012 updated resource is restated below for fullness. The updated resource saw an increase of 35% to total tonnage but with a 21% lower overall gold grade.