VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan 21, 2013) - Lithic Resources Ltd. (TSX VENTURE:LTH) (the "Company") is pleased to announce that it has retained Mine Development Associates (MDA) of Reno, Nevada, to complete a Preliminary Economic Assessment (PEA) for its 100% owned zinc-copper-silver-gold project in western Utah (the "Project"). The project comprises large undeveloped, near surface oxide resources and associated deeper sulphide resources. A PEA completed by the Company in 2010* focused solely on the underground mining potential of the sulphide resources. The Company believes there is significant potential to improve the project by expanding the scope beyond previous assessments. Accordingly, the new PEA will evaluate the following opportunities and potential improvements:
- Potential open pit mining of near surface oxide resources (representing more than 20% of current Project resources) supported by positive preliminary leach testwork completed by Kappes Cassiday in 2009
- Potential revenue capture from significant amounts of by-product iron generated from the processing of sulphide resources
- Optimization of potential underground mining and refinement of capital requirements
- Impacts of improved metal prices and reduced smelter costs for concentrate treatment
"The newly-named ''West Desert Project'' reflects a broader and renewed perspective of the economic potential of the project. West Desert is host to a spectrum of metals offering a wide scope for potential revenue. Combining the potential for both open pit and underground mining, with ready access to road, rail and grid power are just a few of the many advantages for West Desert," stated Chris Staargaard, President and CEO. "Large zinc deposits with ''clean'' characteristics (absent of mercury, arsenic, selenium, iron sulphide) such as West Desert are rare. Large zinc deposits with good grades and significant byproduct credits, located in politically stable jurisdictions are also increasingly rare. I am excited to combine all of these advantages and new opportunities towards a positive PEA for the West Desert Project," he added.
About the West Desert Project
The West Desert project is located approximately 160 kilometres southwest of Salt Lake City, Utah. All season access is by paved road to within 25 kilometres of the Project, followed by gravel road access. The Property is located approximately 75 kilometres from railhead and is serviced by grid electricity.
Resources at the Project, based on approximately 40,000 metres of diamond drilling, were estimated by MDA and subsequently published in a November 19, 2009 news release, as follows:
West Desert Project Resources (2009)
Note: Based on a 3% Zinc-equivalent (ZnEq) cutoff grade for the Sulphide resource and a 1% ZnEq cutoff grade for the Oxide resource. Zinc-equivalent grade was calculated using a zinc price of US$0.80/lb, a copper price of US$2/lb and an indium price of US$500/kg. Rounding of numbers may result in slight variations.
The 2010 PEA, using an underground only production model based on the sulphide resource*, evaluated the mining and processing of 1.2 million tonnes per year and generated payable annual metal production of 90 million pounds zinc, 7.1 million pounds copper, 1.1 million ounces of silver and 7,000 ounces gold over an 11 year mine life.
Metallurgical studies completed for the 2010 PEA indicated good recoveries from sulphide mineralization to produce separate zinc (80%-95%) and copper (50%) concentrates using conventional flotation processing. The "clean" concentrates (absent of mercury, arsenic, selenium, iron sulphide) contained important levels of gold, silver and indium and produced significant byproduct iron in the form of magnetite. Metallurgical studies also identified the potential for excellent recoveries from near surface zinc oxide resources.
The PEA also concluded there is good potential to expand the existing resources and improve the economics of the Project.
New PEA Studies
The new PEA will evaluate the integration of an open pit operation to mine and recover the near surface oxide resources that exist at the Project. This could provide important early revenue and possibly capital for potential subsequent underground development of the sulphide resources. Oxide resources represent more than 20% of the current Project resources and are located within 120 metres of surface. Preliminary leach testwork by Kappes Cassiday in 2009 indicated excellent recoveries of zinc and good recoveries of copper and indium from composite samples of this material.
Additional metallurgical testwork in the new PEA will evaluate the potential recovery and sale of iron (magnetite) produced as a by-product from the processing of underground sulphide resources. This could provide significant additional revenue while reducing tailings volume and also result in lower capital requirements by reducing the size of a tailings facility. The inclusion of magnetite production from the mine could significantly alter the mining schedule to benefit the underground mining costs, as well as bring more resources into the mine plan.
The general backdrop of higher copper and precious metal prices and lower smelter fees since the 2010 PEA* also provide potential for improved economics at West Desert.
Mr. Jeffrey B. Austin, P.Eng., President of International Metallurgical and Environmental Inc., will supervise the metallurgical studies in the PEA. Mr. Austin has extensive experience in the commissioning of new mines and has supported several hundred project studies over the last 25 years.
* The 2010 PEA production model utilized long term metal prices of US$1.10/lb zinc, US$2.00/lb copper, US$12/oz silver, US$850/oz gold and an indium price of US$500/kg. For further details refer to the "Preliminary Economic Assessment of the Crypto Zinc-Copper-Indium Project, Juab County, Utah" on the Company''s website.
Lithic Resources is a Canadian-based metal explorer focused on advancing the 100% owned West Desert project in Utah. The West Desert project is host to large, undeveloped zinc-copper-silver-gold-indium resources and is well located on road and near rail. Mineralization is open in several directions with good potential to expand existing resources and very good potential for the discovery of new zones beyond these extensions. The Project is fully permitted and bonded for future exploration.
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements as set out in NI 43-101 and was reviewed by C.F. Staargaard, P.Geo., a Qualified Person as defined in NI 43-101.
LITHIC RESOURCES LTD.
C.F. Staargaard, President and CEO
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian and US securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the potential of the Company''s mineral projects and the Company''s planned drilling and exploration programs. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results, performance, or actions and that actual results and actions may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, those risks and uncertainties disclosed in the Company''s Management Discussion and Analysis for the year ended December 31, 2011 filed with certain securities commissions in Canada and other information released by the Company and filed with the appropriate regulatory agencies. All of the Company''s Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company''s mineral properties.