History
Zaruma Resources Inc. (the "Company" or "ZMR"), in its present form, originated in October 2000 with the reverse take over of its predecessor company, Laminco Resources Inc. by Zaruma Mining Corporation ASA ("ZMC"), Norway. Trading of the Company's common shares on the Toronto Stock Exchange under the symbol "ZMR" began on November 1, 2000.
The Company was incorporated under the name "Golden News Inc." by memorandum and articles of incorporation pursuant to the provisions of the Company Act (British Columbia) on March 29, 1983 and changed its name by articles of amendment to "Golden News Resources Inc." on July 5, 1983. On January 10, 1995, the Company changed its name by articles of amendment to "Laminco Resources Inc." and was continued under the name of "Zaruma Resources Inc." under the laws of Yukon by articles of continuance on October 17, 2000.
Zaruma Mining Corporation ("ZMC") commenced in December 1996 as Zaruma Gold AS out of Kristiansand, Norway and changed name in early 1999 after a friendly take over of Aureus International Mining Corp. (based in Koenigstein Germany, incorporated 1998 by Dr. Thomas Utter); Aureus owned the option right to the El Foco Project in Venezuela.
Zaruma Mining Corporation ASA, ("ZMC") was incorporated under the Norwegian corporate act as Zaruma Gold AS in December, 1996. Zaruma Gold AS changed its name in February, 1999 to Zaruma Mining Corporation ASA and, as a direct subsidiary of ZMR, was wound up on March 22, 2004.
Highlights
Luz del Cobre Copper Project
In view of strong copper prices and after reviews of the large historic data base on Luz del Cobre, focus was shifted in 2005 to the Luz del Cobre project, as it represents the best near-term opportunity to meet our objective of attaining an early cash flow.
In November 2006, the Compamy filed an Technical Report which was completed by M3 Engineering and Technology Corporation, ("M3"), Tucson, Arizona and P&E Mining Consultants Inc., ("P&E"), Brampton, Ontario. Qualified Persons and Independent Consultants Dr. Conrad E. Huss, P.Eng., and Peter Erath, P.Eng. of M3 authored the review of the process design, flow sheet, engineering and capital and operating cost estimates, and Eugene Puritch, P.Eng., of P&E estimated the ore reserves and prepared the pit optimization and production schedule.
Based on the SX-EW plant processing copper solution from mining 2,800 tonnes of ore per day, the project capital cost estimate is US$24.4 million. This study is based on contract mining of the open pit, a mine life of over 5 years and an average copper recovery of 78.6%. The Company expects actual recoveries to be between 78.6% and the recent laboratory test metallurgical recoveries of 88.5%, depending on field conditions.
The economic feasibility was modeled using an average annual copper cathode production of 15 million pounds, a selling price of $2.235 and an operating cost of $0.92 per pound. The pre-tax net operational cash flow is expected to be an average of $19.4 million per year, the internal rate of return is expected to be 60.5% before taxes, and 45.1%, after taxes. The net present value of the project is calculated to be $39 million at a 5% discount rate and $30 million at a 10% discount rate. The capital payback period is estimated to be 1.9 years after reaching full production.
Proven and probable reserves within the optimized open pit shell and adjusted to a base case recovery of 78.6% copper, total 4.4 million tonnes at 1% copper, after dilution, of which 3.4 million tonnes at 1.11% copper is mixed oxide - secondary sulphide ore, and 0.95 million tonnes at 0.63% copper is oxidized material.
Other Projects
The properties of Zaruma were extensively explored by previous owners, which expended over US$25 million on exploration programs in the 1990's, resulting in very large data bases, which were acquired by the Company along with the exploration and exploitation rights. However, key was to systematically assess the data base and the assess and explore the projects in accordance with today's reporting and assessment standards.
After considerable additional work, Zaruma successfully reported or filed, for example:
A resource estimate on the Alcaravan gold mineralization (El Foco), under NI 43-101 reporting standards, prepared by Qualified Person Eugene Puritch, P.Eng. The Technical Report was filed on SEDAR (www.sedar.com) in September 2006.
Technical Report on the Resource Estimate of the Gold Mineralization found on the San Antonio property, Sonora State, Northwestern Mexico" following NI 43-101 standards was filed on SEDAR on September 8, 2004. The authors of the San Antonio Technical Report were Qualified Persons Reno Pressacco, M.Sc(A), P.Geo. of Micon International Limited, and Eugene Puritch B.Sc., P.Eng., of P&E Mining Consultants Inc.
A Technical Review (NI 43-101 compliant) of the Saprolitic Portion of the Alcavaran/El Foco Gold Project in Bolivar State, Venezuela" in respect of the El Foco Property by Watts, Griffis and McOuat Limited. December 2003.
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