Robert Washer, the Company's Chief Executive Officer, commented: "This is a watershed event for us. With this approval, we will likely be the first to operate a large-scale modern mining facility in Ecuador. In addition, it clearly demonstrates the intention of the new government to support the development of the Ecuadorian mining industry."
The Zaruma Gold Project
The Zaruma Gold Project is located in the cantons of Zaruma and Portovelo, Province of El Oro, Ecuador, approximately 160 kilometres south of Guayaquil, Ecuador's main seaport. The project comprises 46 mineral exploration concessions, covering approximately 103 square kilometres, in an active high-grade goldfield.
Gold mineralization occurs in a 15 kilometre by 5 kilometre polymetallic epithermal vein system. The vein system is hosted by a Tertiary volcanic sequence of intermediate to mafic volcanic breccias, tuffs and andesites.
Initial Zaruma gold resources were estimated by Allen J. Maynard BAppSc(Geol), MAIG, MAusIMM, an independent "qualified person" as defined by NI 43-101, as follows:
Mr. Maynard's report, dated October 21, 2005, has been filed on SEDAR and is available for viewing at www.sedar.com.
The highlights of an Independent Preliminary Assessment of the Zaruma Gold Project prepared by W. J. Holly, MAustIMM FFin, an independent "qualified person" as defined by NI 43-101, are as follows:
|Mine Life||14.5 years|
|Annual Production (15% dilution)||250,000 tonnes/100,000 ounces gold|
|Operating Cost per Gold Ounce||US$181|
|Cumulative Pre Tax Undiscounted Cash Flow||US$467,000,000|
As required by NI 43-101, it should be noted these estimates are preliminary, and that inferred gold resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. As such there is no certainty that the estimates contained in the Preliminary Assessment will be realized. Mr. Holly's report, dated August 21, 2006, has been filed on SEDAR and is available for viewing at www.sedar.com.
With approximately 100 men at work on the Zaruma project, the Company is on track to complete plant construction by the end of this year and to commence gold production in the first quarter of 2008. Much of the plant equipment and surface rights has been purchased and construction of the first decline has commenced.
Ore excavated in the construction of the decline is being stockpiled for future processing. Notably, near-surface excavation of the decline has exposed a prospective gold-bearing vein, of approximately two metres in width, which is understood to be the southern extension of the Tamavo Vein. This vein is not included in existing resources estimates.
Ecuadorian law requires that environmental approvals be obtained on a concession-by-concession basis for excavation operations (in addition to plant construction and operation). The necessary approvals have been obtained for the concessions that the Company intends to mine initially. Filings have been made, and will be made going forward as required, on additional concessions.
The Company has reached agreement in principle (the "Agreement"), subject to regulatory approval, to acquire approximately 21 acres of prime industrial land, on which part of the plant will be constructed, and miscellaneous equipment (in aggregate the "Property") from a company in which Robert Washer, the Company's chief executive officer, is the controlling shareholder.
The Property was purchased by the vendor during 1994 and 1996, at which time the vendor operated a small gold processing facility. The land was previously permitted for small scale mining operations, which has allowed the Company to expedite the permitting process.
The Agreement provides for a non-refundable deposit of US$100,000, a monthly lease payment of US$6,000 and an 18 month option to purchase the Property for US$1,386,000. The non-refundable deposit will be applied against the purchase price upon exercise of the option.
The purchase of the Property is recommended by the Company's independent engineering consultants and the purchase price is supported by an independent appraisal. The Agreement has been reviewed by an independent committee of the Company's Board of Directors.
About Dynasty Metals & Mining Inc.
Dynasty Metals & Mining Inc. is a Canadian based mining company involved in the exploration and development of mineral properties in Ecuador. The Company has two advanced stage gold projects, Zaruma and Jerusalem, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the Dynasty Goldfield.
Dynasty Metals & Mining Inc.
Robert Washer, President and CEO
For further information about the Company, please contact Murray Oliver at (604) 687-0888 or firstname.lastname@example.org or visit the Company's website at www.dynastymining.com.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.