| % Change in Base Case Prices | -20% | -10% | 0% | 10% | 20% |
| Gold Price (US$/oz) | $1,000 | $1,125 | $1,250 | $1,375 | $1,500 |
| Copper Price (US$/lb) | $2.00 | $2.25 | $2.50 | $2.75 | $3.00 |
| Silver Price (US$/oz) | $14.40 | $16.20 | $18.00 | $19.80 | $21.60 |
| Pre-Tax: | | | | | |
| NPV5% (US$ millions) | $31.7 | $165.6 | $299.4 | $433.3 | $567.2 |
| IRR (%) | 10% | 25% | 36% | 46% | 55% |
| Payback Period (years) | 3.1 | 2.2 | 1.6 | 1.3 | 1.0 |
| After-Tax: | | | | | |
| NPV5% (US$ millions) | -$19.3 | $77.5 | $169.4 | $257.2 | $344.9 |
| IRR (%) | 2% | 15% | 24% | 31% | 38% |
| Payback Period (years) | 4.5 | 3.0 | 2.3 | 1.9 | 1.6 |
Mineral Resource
The PEA is based on the current mineral resource estimate for Tepal. The technical report, titled Technical Report on the Mineral Resources of the Tepal Gold-Copper Project, Michoacán State, Mexico (the "2012 Resource Report"), was filed on SEDAR on March 29, 2012. Project mineral resources are summarized in the table below:
| Total Tepal Project Resource Estimate(1) – March 2012 |
| | Tonnes | Au Grade | Cu Grade | Ag Grade | Contained Au | Contained Cu |
| Resource Classification | | (g/t) | (%) | (g/t) | (oz) | (lbs) |
| Measured | 34,100,000 | 0.48 | 0.25 | 0.95 | 528,000 | 185,000,000 |
| Indicated | 153,700,000 | 0.26 | 0.19 | 1.67 | 1,276,000 | 628,000,000 |
| Measured & Indicated | 187,800,000 | 0.3 | 0.2 | 1.54 | 1,804,000 | 813,000,000 |
| Inferred | 35,700,000 | 0.16 | 0.15 | 1.68 | 182,000 | 120,000,000 |
| | | | | | | |
| Oxide and Sulphide Resources(1)- March 2012 |
| | Tonnes | Au Grade | Cu Grade | Ag Grade | Contained Au | Contained Cu |
| Resource Classification | | (g/t) | (%) | (g/t) | (oz) | (lbs) |
| Oxide Measured & Indicated | 21,100,000 | 0.34 | 0.21 | 1.18 | 233,000 | 96,000,000 |
| Oxide Inferred | 700,000 | 0.19 | 0.13 | 2.01 | 4,000 | 2,000,000 |
| Sulphide Measured & Indicated | 166,700,000 | 0.29 | 0.2 | 1.59 | 1,571,000 | 717,000,000 |
| Sulphide Inferred | 35,000,000 | 0.16 | 0.15 | 1.67 | 177,000 | 118,000,000 |
| (1) The resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves. Resource numbers above are rounded to nearest 100,000 tonnes, 1,000 oz Au and 1,000,000 lbs Cu |
Capital Costs
Total pre-production capital cost is estimated at $214 million with the majority of the costs associated with sulphide and oxide processing plants as well as surface infrastructure. The PEA envisions a two-year construction period. Initial capital costs will be partially offset by commencing oxide Au/Ag doré production during the second year of construction via a 5,500 tpd oxide processing plant consisting of a ball mill, oxide CIL circuit producing Au/Ag doré and tailings management facility. Commercial mine production will commence upon commissioning a separate 22,000 tpd sulphide processing plant consisting of semi-autogenous grinding ("SAG") and ball mills, a flotation circuit producing Cu/Au/Ag concentrate and a sulphide CIL circuit producing Au/Ag doré, along with tailings management facilities.
Open pit mining and haulage is anticipated to be completed by contract mining companies using their own equipment, conducted 365 days per year. Electrical power would be supplied by CFE, the federal power authority in Mexico. Pre-production capital cost includes all costs associated with upgrading an electrical substation located in the community of Tepalcatepec and adding 20 kilometres of new overhead transmission line from this substation to the Project site. Power line and substation cost estimates were based on a peak demand load forecast of 28 megawatts and overhead line supplying power at 115kV.
LOM sustaining capital costs are estimated at $87 million with the majority of the costs associated with tailings and waste rock management and closure costs.
Project capital costs are summarized below:
| Capital Costs | Pre-Production | Sustaining / Closure | Total |
| | (US$M) | (US$M) | (US$M) |
| Mining | 12.4 | 3.0 | 15.4 |
| Site Development/Earthworks | 5.5 | 0.0 | 5.5 |
| Sulphide Processing Plant | 77.7 | 5.7 | 83.4 |
| Oxide Processing Plant | 29.9 | 0.0 | 29.9 |
| Tailings & Waste Rock Management | 8.6 | 48.5 | 57.1 |
| Surface Infrastructure | 25.2 | 0.0 | 25.2 |
| Project Indirects | 10.5 | 0.0 | 10.5 |
| EPCM | 15.3 | 0.0 | 15.3 |
| Owner Costs | 6.9 | 0.0 | 6.9 |
| Closure (Net of Salvage) | 0.0 | 22.9 | 22.9 |
| Subtotal Capital Costs | 191.9 | 80.1 | 272.0 |
| Contingency 11% | 22.3 | 6.6 | 28.9 |
| Total Capital | 214.2 | 86.7 | 300.9 |
Mining
The PEA mine plan would use conventional open pit mining methods with work performed by contract mining companies. Mineralized material is located in three open pits (North, South and Tizate Pits) and would be mined sequentially, targeting the highest value material in the initial years of mine life in order to facilitate early capital payback and maximize project economics. In- pit mineral resources included in the PEA mine plan using 5% mining dilution are as follows:
| Mineral Resource (Mine Diluted) Included in PEA Mine Plan(1)(2) |
| | Tonnes | Au Grade | Cu Grade | Ag Grade | Contained Au | Contained Cu |
| Resource Classification | | (g/t) | (%) | (g/t) | (oz) | (lbs) |
| Measured | 26,800,000 | 0.51 | 0.25 | 0.95 | 438,000 | 150,000,000 |
| Indicated | 61,700,000 | 0.28 | 0.20 | 1.58 | 550,000 | 269,000,000 |
| Measured & Indicated | 88,500,000 | 0.35 | 0.21 | 1.39 | 988,000 | 419,000,000 |
| Inferred | 2,000,000 | 0.19 | 0.18 | 2.73 | 12,000 | 8,000,000 |
| (1) The resource stated in the table conforms to CIM guidelines for reasonable potential for economic extraction and is not to be confused as reserves. Resource numbers above are rounded to nearest 100,000 tonnes, 1,000 oz Au and 1,000,000 lbs Cu |
| (2) NSR cut-off for sulphide material is $8.19/tonne milled and for oxide material is $10.13/tonne milled |
Measured and Indicated resources comprise 98% of the PEA mine plan tonnage, with Inferred resources comprising the remaining 2%.
Processing
The PEA envisions milling of oxide and sulphide material through separate circuits. Oxide material would be milled at 5,500 tpd through a ball mill and sulphide material would be milled at 22,000 tpd through a separate SAG and ball mill circuit.
Oxides would be processed through a CIL circuit, producing Au/Ag doré on site that would be shipped for refining. Oxide Au/Ag doré production is expected to commence during the second year of mine construction in order to offset a portion of the initial capital cost. Total gold production during the pre-production period would be approximately 21,000 oz.
Sulphides would be processed through a Cu/Au/Ag rougher circuit for copper, gold and silver recovery. The rougher Cu/Au/Ag concentrate would be reground and processed through a cleaner circuit to produce a copper concentrate with significant gold credits for shipment to an offshore smelter. Tailings from the Cu/Au/Ag rougher circuit would be sent to a pyrite rougher circuit to produce a pyrite concentrate. Separate to the Cu/Au/Ag concentrate process, the pyrite concentrate would be combined with the tailings from the first copper cleaner circuit, with the combined concentrate leached through a CIL circuit to produce Au/Ag doré on site that would be shipped for refining.
Based on Geologix's previously completed technical work that processed representative material from Tepal's three pits at G&T Laboratories located in Kamloops, British, the PEA design is expected to produce a concentrate with a copper grade of 26% and no deleterious elements. The Company believes that the Cu/Au/Ag concentrate will be marketable to smelters.
Operating Costs
Project operating cost estimates are as follows:
| Operating Cost | US$/t | LOM |
| | processed | (US$M) |
| Mining* | 3.30 | 298.7 |
| Processing – Sulphide | 5.49 | 429.7 |
| Processing – Oxide | 6.34 | 77.2 |
| G&A | 0.75 | 67.4 |
| Total OPEX | 9.65 | 873.1 |
| *Mining operating cost is $2.16/t mined (excludes waste tonnes not associated with the 1.4Mt of pre-production mining) |
Qualified Persons and 43-101 Disclosure
The technical information contained in this press release is based on information prepared by, or under the supervision of, Gord Doerksen, P.Eng., VP Engineering for JDS and a Qualified Person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101").
About Geologix Explorations Inc.
Geologix is a mineral exploration and development company focused on acquiring, exploring, and developing mineral resource opportunities with the potential to host profitable mining operations. The Company's primary focus is the Tepal Gold/Copper Project in Michoacán state, Mexico.
This Press Release may contain statements which constitute 'forward-looking' statements, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities and operating performance of the Company. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company's Annual Information Form and quarterly and annual Management's Discussion & Analysis, which may be viewed on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward- looking statements except as required by applicable Canadian securities requirements.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
Original Article: http://finance.yahoo.com/news/geologix-announces-tepal-preliminary-economic-113000747.html
