VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 4, 2010) - Peregrine Metals Ltd. (TSX:PGM) ("Peregrine Metals" or "the Company") is pleased to report an updated, independent, National Instrument ("NI") 43-101-compliant copper and gold resource ("Resource") for the Altar porphyry copper-gold project ("Altar" or "the Project") in San Juan Province, Argentina.
UPDATED RESOURCE SUMMARY
The Resource estimate was jointly prepared by Nilsson Mine Services Ltd. and GeoSim Services Inc. of Vancouver, Canada, utilizing drill results for the 140 core holes (55,641 metres) drilled at Altar to date and is summarized in the following table. A NI 43-101 compliant, Technical Report that contains details of the resource estimate is in preparation and will be posted on SEDAR and Peregrine Metals' website by November 18, 2010.
*The copper equivalent ("CuEq") calculation is based on a copper price of USD $2.80/lb and gold price of USD $850/oz. It also includes a factor to compensate for an assumed gold recovery of 65% and a 90% recovery for copper.
Canadian Institute of Mining and Metallurgy ("CIM") standards and securities disclosure requirements stipulate that a mineral resource can only be declared on a deposit that has "reasonable prospects of economic extraction." The mineral Resource was estimated by ordinary kriging constrained by an optimized pit shell using a 0.30% CuEq cut-off grade and metal prices of USD $2.80 per pound of copper and USD $850 per ounce of gold. Block dimensions were 15 by 15 by 15 metres. Grade estimation was based on analyses of core samples from 140 diamond drill holes (55,641 metres) completed between 2003 and May, 2010. Assays were composited in 10 metre down-hole intervals. Copper grades were capped at 5% and gold grades at 0.3 g/t prior to compositing to remove outlier values.
Wireframe models of the leached cap and major lithologies were created based on cross sectional interpretation. The density values assigned to the major lithologies were based on 1,877 bulk density measurements of drill core.
The selected base case cut-off grade of 0.3% copper equivalent is considered consistent with other mineral deposits of similar characteristics, scale and location.
Key aspects of the Project include:
* Measured and Indicated Resource of 802 million tonnes, containing 7.41 billion pounds of copper at a grade of 0.42% (0.44% CuEq), an increase of 74% over the 2009 resource estimate, plus 1.53 million ounces of gold at a grade of 0.059 g/t, both at a 0.3% CuEq cut-off grade
* Inferred Resource of 465.6 million tonnes, containing 4.32 billion pounds of copper at a grade of 0.42% (0.44% CuEq), plus 880,000 ounces of gold at a grade of 0.058 g/t, both at a 0.3% CuEq cut-off grade
* A total of 55,641 metres in 140 holes has been drilled into Altar to date and the deposit remains open-ended in at least two directions laterally and at depth. For example, the deepest hole drilled at Altar, ALD-43, grades 0.70% copper over 800 metres, and the final 408 metres, between 602 and 1,010 metres of depth, grades 0.83% copper and ends in copper mineralization.
* Significant intersections of copper mineralization (up to 214 metres in length) grading in excess of 0.90% copper are present in the upper portions of the deposit (angle drill holes ALD 73, 76, 85, 89 and 99). See press releases dated June 2 and June 20, 2010.
* Altar has road access, relatively low elevation, potential water sources on-site and the topography is suitable for mining and processing infrastructure.
* Recognising the substantial increase in Resource size, Peregrine Metals is proceeding with a Preliminary Economic Assessment ("PEA") on a combination leach and concentrator mining operation to examine the best scenarios for mining and processing this large copper-gold deposit.
Images of the project and the updated resource can be viewed at http://www.pmet.com/i/pdf/altar536.pdf.
METALLURGICAL TEST-WORK UPDATE
A 627 kilogram shipment of whole HQ (6.4 cm) drill core samples from five holes drilled at several locations in the central zone of Altar, representing various host rock and mineralization types, is being utilized by McClelland Laboratories, Inc. in Sparks, Nevada for the 2010 metallurgical test-work, which includes copper column leach tests, gold bottle-roll tests and flotation tests. Dr. Joseph Schlitt of Hydrometal, Inc. is providing technical guidance over this work.
The core sample intervals were composited to provide 260 kilograms of material for 13 copper column leach tests that are designed to study the relationships of host lithology, ore grade and mineral solubility to the kinetics of copper extraction. Some of the columns were loaded with higher percentages of refractory copper mineralization to better understand the potential leach parameters of that type of mineralization as well as to evaluate the optimal crushing size. Refractory copper mineralization traditionally does not respond well to leaching. The column leach testing began in mid-June, 2010, and will run for at least 180 days. An additional six column tests on a total of 120 kilograms of drill core samples were initiated to further assess the leaching kinetics of refractory copper mineralization that could be applicable in a dump leach scenario. These tests will also run for at least 180 days. Interim results on the initial 13 column leach tests show that after 90 days, the copper recoveries range from 17 to 59 percent of total copper content. After 60 to 80 days, bacterial activity appears to have increased, helping to optimize leach conditions and accelerate copper recoveries. The current leach rates continue to trend upwards, although columns with samples dominated by more refractory copper mineralization continue to leach slowly, as expected.
Initial flotation testing is also being conducted on 25 kilograms of the same drill core composites that were prepared for the column leach tests. A programme of additional flotation tests on samples from ten metre intervals throughout the deposit is also being initiated. This programme will include work to optimize the flotation parameters.
The Company is continuing with its mineralogical examination of the entire deposit, as part of the metallurgical test-work programme. Further testing will be conducted to investigate how the mineralogy impacts leach solution chemistry and flotation characteristics, as well as copper recoveries from various crush sizes.
PRELIMINARY ECONOMIC ASSESSMENT UPDATE
The initial PEA, as announced on April 1, 2010, was envisioned to be solely on a solvent extraction/electrowinning ("SX/EW") copper heap leach operation focussing on the upper regions of the deposit. With the receipt of interim metallurgical results and an updated resource estimate showing that the measured and indicated copper resource has grown by 74% (or 105% at a 0.2% CuEq cut-off grade), the scope of the PEA has been modified and expanded to include a combined leach and concentrator mining operation. Work completed or underway on the PEA includes, but is not limited to, the following: environmental baseline studies, road access studies, infrastructure siting studies, preliminary water supply studies, geotechnical studies, metallurgical and mineralogical studies, and mine scheduling. Mine scheduling will be used to optimize the recovery of the higher grade material in the upper portions of the deposit in the early years of operations. The PEA is currently expected to be completed during the third quarter of 2011. More details on the PEA will be provided this quarter.
BACKGROUND INFORMATION
Altar is a large Andean-style porphyry copper-gold deposit. The alteration zone encompasses an area measuring over three by two kilometres with a strong, coincident induced polarization (IP) geophysical anomaly of approximately the same size. The copper mineralization within the upper 300 metres of the deposit includes both supergene digenite-covellite and hypogene chalcocite-bornite replacing earlier chalcopyrite. The mineralization below approximately 300 metres is primarily dominated by chalcopyrite.
Peregrine Metals has a comprehensive and rigorous quality assurance/quality control ("QA/QC") programme in place that employs certified assay standards, blanks and core duplicates, as well as routine check assays at a separate secondary laboratory.
Peregrine Metals holds a 100% interest in the Altar project subject to a 1% NSR royalty granted to Rio Tinto and another 1% NSR royalty granted to the underlying concession owners that may be purchased by Peregrine Metals from the underlying owners at any time for US $1 million.
Jeff Toohey, M.Sc., P.Eng., Vice President Exploration for the Company, is a Qualified Person as defined by NI 43-101 and is responsible for the design and implementation of the exploration work being carried out by the Company at the Altar Project.
John Nilsson M.Sc. P.Eng., President of Nilsson Mine Services Ltd. is a Qualified Person as defined by NI 43-101 and is co-author of the Altar Resource Estimate Report.
Ronald G. Simpson, B.Sc., P,Geo., President of Geosim Services Inc., is a Qualified Person as defined by NI 43-101 and is responsible for the updated resource estimate on the Altar Project.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Such forward-looking statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned exploration and development of its properties, planned expenditures and plans related to its business, mineral resource estimates and other matters that may occur in the future. These statements relate to analyses and other information that are based on expectations of future performance and planned work programmes.
The Company has made a number of assumptions with respect to, among other things, the price of copper and other metals, economic and political conditions, and continuity of operations. Although the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements will prove to be accurate.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following: fluctuations in mineral prices; the Company's dependence on one mineral project; the nature of mineral exploration and mining and the uncertain commercial viability of certain mineral deposits; the re-allocation of the proposed uses of the net proceeds of the offering and the private placement; the Company's lack of operating revenues; uncertainty in the Company's ability to obtain necessary financing to fund the development of its mineral properties or the completion of further exploration programmes; the Company's principal property being located in Argentina, including political, economic, and regulatory instability; governmental regulations and obtaining necessary licenses and permits; the Company's mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; fluctuations in the currency markets (particularly the Argentina peso, Canadian dollar and United States dollar); the business being subject to environmental laws and regulations which may increase costs of doing business and restrict the Company's operations; and the Company's dependence on key personnel.
Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company's forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
For more information, please contact
Peregrine Metals Ltd.
Mr. Eric Friedland
President
(604) 669-8800
or
Peregrine Metals Ltd.
Mr. Michael Westerlund
VP Investor Relations and Corporate Communications
(604) 669-8800
(604) 408-8881 (FAX)
info@peregrinemetals.com
www.pmet.comUPDATED RESOURCE SUMMARY
The Resource estimate was jointly prepared by Nilsson Mine Services Ltd. and GeoSim Services Inc. of Vancouver, Canada, utilizing drill results for the 140 core holes (55,641 metres) drilled at Altar to date and is summarized in the following table. A NI 43-101 compliant, Technical Report that contains details of the resource estimate is in preparation and will be posted on SEDAR and Peregrine Metals' website by November 18, 2010.
*The copper equivalent ("CuEq") calculation is based on a copper price of USD $2.80/lb and gold price of USD $850/oz. It also includes a factor to compensate for an assumed gold recovery of 65% and a 90% recovery for copper.
Canadian Institute of Mining and Metallurgy ("CIM") standards and securities disclosure requirements stipulate that a mineral resource can only be declared on a deposit that has "reasonable prospects of economic extraction." The mineral Resource was estimated by ordinary kriging constrained by an optimized pit shell using a 0.30% CuEq cut-off grade and metal prices of USD $2.80 per pound of copper and USD $850 per ounce of gold. Block dimensions were 15 by 15 by 15 metres. Grade estimation was based on analyses of core samples from 140 diamond drill holes (55,641 metres) completed between 2003 and May, 2010. Assays were composited in 10 metre down-hole intervals. Copper grades were capped at 5% and gold grades at 0.3 g/t prior to compositing to remove outlier values.
Wireframe models of the leached cap and major lithologies were created based on cross sectional interpretation. The density values assigned to the major lithologies were based on 1,877 bulk density measurements of drill core.
The selected base case cut-off grade of 0.3% copper equivalent is considered consistent with other mineral deposits of similar characteristics, scale and location.
Key aspects of the Project include:
* Measured and Indicated Resource of 802 million tonnes, containing 7.41 billion pounds of copper at a grade of 0.42% (0.44% CuEq), an increase of 74% over the 2009 resource estimate, plus 1.53 million ounces of gold at a grade of 0.059 g/t, both at a 0.3% CuEq cut-off grade
* Inferred Resource of 465.6 million tonnes, containing 4.32 billion pounds of copper at a grade of 0.42% (0.44% CuEq), plus 880,000 ounces of gold at a grade of 0.058 g/t, both at a 0.3% CuEq cut-off grade
* A total of 55,641 metres in 140 holes has been drilled into Altar to date and the deposit remains open-ended in at least two directions laterally and at depth. For example, the deepest hole drilled at Altar, ALD-43, grades 0.70% copper over 800 metres, and the final 408 metres, between 602 and 1,010 metres of depth, grades 0.83% copper and ends in copper mineralization.
* Significant intersections of copper mineralization (up to 214 metres in length) grading in excess of 0.90% copper are present in the upper portions of the deposit (angle drill holes ALD 73, 76, 85, 89 and 99). See press releases dated June 2 and June 20, 2010.
* Altar has road access, relatively low elevation, potential water sources on-site and the topography is suitable for mining and processing infrastructure.
* Recognising the substantial increase in Resource size, Peregrine Metals is proceeding with a Preliminary Economic Assessment ("PEA") on a combination leach and concentrator mining operation to examine the best scenarios for mining and processing this large copper-gold deposit.
Images of the project and the updated resource can be viewed at http://www.pmet.com/i/pdf/altar536.pdf.
METALLURGICAL TEST-WORK UPDATE
A 627 kilogram shipment of whole HQ (6.4 cm) drill core samples from five holes drilled at several locations in the central zone of Altar, representing various host rock and mineralization types, is being utilized by McClelland Laboratories, Inc. in Sparks, Nevada for the 2010 metallurgical test-work, which includes copper column leach tests, gold bottle-roll tests and flotation tests. Dr. Joseph Schlitt of Hydrometal, Inc. is providing technical guidance over this work.
The core sample intervals were composited to provide 260 kilograms of material for 13 copper column leach tests that are designed to study the relationships of host lithology, ore grade and mineral solubility to the kinetics of copper extraction. Some of the columns were loaded with higher percentages of refractory copper mineralization to better understand the potential leach parameters of that type of mineralization as well as to evaluate the optimal crushing size. Refractory copper mineralization traditionally does not respond well to leaching. The column leach testing began in mid-June, 2010, and will run for at least 180 days. An additional six column tests on a total of 120 kilograms of drill core samples were initiated to further assess the leaching kinetics of refractory copper mineralization that could be applicable in a dump leach scenario. These tests will also run for at least 180 days. Interim results on the initial 13 column leach tests show that after 90 days, the copper recoveries range from 17 to 59 percent of total copper content. After 60 to 80 days, bacterial activity appears to have increased, helping to optimize leach conditions and accelerate copper recoveries. The current leach rates continue to trend upwards, although columns with samples dominated by more refractory copper mineralization continue to leach slowly, as expected.
Initial flotation testing is also being conducted on 25 kilograms of the same drill core composites that were prepared for the column leach tests. A programme of additional flotation tests on samples from ten metre intervals throughout the deposit is also being initiated. This programme will include work to optimize the flotation parameters.
The Company is continuing with its mineralogical examination of the entire deposit, as part of the metallurgical test-work programme. Further testing will be conducted to investigate how the mineralogy impacts leach solution chemistry and flotation characteristics, as well as copper recoveries from various crush sizes.
PRELIMINARY ECONOMIC ASSESSMENT UPDATE
The initial PEA, as announced on April 1, 2010, was envisioned to be solely on a solvent extraction/electrowinning ("SX/EW") copper heap leach operation focussing on the upper regions of the deposit. With the receipt of interim metallurgical results and an updated resource estimate showing that the measured and indicated copper resource has grown by 74% (or 105% at a 0.2% CuEq cut-off grade), the scope of the PEA has been modified and expanded to include a combined leach and concentrator mining operation. Work completed or underway on the PEA includes, but is not limited to, the following: environmental baseline studies, road access studies, infrastructure siting studies, preliminary water supply studies, geotechnical studies, metallurgical and mineralogical studies, and mine scheduling. Mine scheduling will be used to optimize the recovery of the higher grade material in the upper portions of the deposit in the early years of operations. The PEA is currently expected to be completed during the third quarter of 2011. More details on the PEA will be provided this quarter.
BACKGROUND INFORMATION
Altar is a large Andean-style porphyry copper-gold deposit. The alteration zone encompasses an area measuring over three by two kilometres with a strong, coincident induced polarization (IP) geophysical anomaly of approximately the same size. The copper mineralization within the upper 300 metres of the deposit includes both supergene digenite-covellite and hypogene chalcocite-bornite replacing earlier chalcopyrite. The mineralization below approximately 300 metres is primarily dominated by chalcopyrite.
Peregrine Metals has a comprehensive and rigorous quality assurance/quality control ("QA/QC") programme in place that employs certified assay standards, blanks and core duplicates, as well as routine check assays at a separate secondary laboratory.
Peregrine Metals holds a 100% interest in the Altar project subject to a 1% NSR royalty granted to Rio Tinto and another 1% NSR royalty granted to the underlying concession owners that may be purchased by Peregrine Metals from the underlying owners at any time for US $1 million.
Jeff Toohey, M.Sc., P.Eng., Vice President Exploration for the Company, is a Qualified Person as defined by NI 43-101 and is responsible for the design and implementation of the exploration work being carried out by the Company at the Altar Project.
John Nilsson M.Sc. P.Eng., President of Nilsson Mine Services Ltd. is a Qualified Person as defined by NI 43-101 and is co-author of the Altar Resource Estimate Report.
Ronald G. Simpson, B.Sc., P,Geo., President of Geosim Services Inc., is a Qualified Person as defined by NI 43-101 and is responsible for the updated resource estimate on the Altar Project.
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Such forward-looking statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned exploration and development of its properties, planned expenditures and plans related to its business, mineral resource estimates and other matters that may occur in the future. These statements relate to analyses and other information that are based on expectations of future performance and planned work programmes.
The Company has made a number of assumptions with respect to, among other things, the price of copper and other metals, economic and political conditions, and continuity of operations. Although the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements will prove to be accurate.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks related to the following: fluctuations in mineral prices; the Company's dependence on one mineral project; the nature of mineral exploration and mining and the uncertain commercial viability of certain mineral deposits; the re-allocation of the proposed uses of the net proceeds of the offering and the private placement; the Company's lack of operating revenues; uncertainty in the Company's ability to obtain necessary financing to fund the development of its mineral properties or the completion of further exploration programmes; the Company's principal property being located in Argentina, including political, economic, and regulatory instability; governmental regulations and obtaining necessary licenses and permits; the Company's mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; fluctuations in the currency markets (particularly the Argentina peso, Canadian dollar and United States dollar); the business being subject to environmental laws and regulations which may increase costs of doing business and restrict the Company's operations; and the Company's dependence on key personnel.
Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company's forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
For more information, please contact
Peregrine Metals Ltd.
Mr. Eric Friedland
President
(604) 669-8800
or
Peregrine Metals Ltd.
Mr. Michael Westerlund
VP Investor Relations and Corporate Communications
(604) 669-8800
(604) 408-8881 (FAX)
info@peregrinemetals.com
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