MALKU KHOTA
Overview
The information regarding the Malku Khota silver-indium project, contained herein should be considered in context of our October 23, 2012 news release "South American Silver Notifies the Bolivian Government of an Investment Dispute over the Expropriation of Malku Khota Mining Concessions"
The Malku Khota project located in Bolivia, is one of the world’s largest undeveloped silver and indium resources with an NI 43-101-qualified Indicated resource of 230.3 million ozs silver and 1,481 tonnes of indium and an Inferred resource of 140 million ozs silver and 935 tonnes indium.
An updated Preliminary Economic Assessment Study ("PEA”) was prepared in March 2011 which showed robust economics for a bulk mineable heap leach operation. The project is road accessible and commercial power is within 15 kilometres of site.
RESOURCES CHART
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MALKU KHOTA
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Approx. 10 g/t Ag Cutoff1
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In Situ Grade
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Total Contained Metal3
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Resource
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Tonnes
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Ag
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In
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Ga
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Cu
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Pb
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Zn
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Ag Eq2
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Ag
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In
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Ga
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Cu
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Pb
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Zn
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Ag Eq
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Category
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Millions
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g/t
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g/t
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g/t
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%
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%
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%
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g/t
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Moz
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tonnes
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tonnes
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Mlbs
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Mlbs
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Mlbs
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Moz
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Measured
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31.0
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33.40
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6.10
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4.50
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0.02
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0.07
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0.02
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49.00
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33.32
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188.00
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139.0
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13.9
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49
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16
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48.55
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Indicated
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224.0
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27.30
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5.80
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4.30
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0.02
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0.07
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0.05
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43.20
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196.96
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1,293.00
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943.0
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106.4
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405
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231
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311.45
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Total M&I
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255.0
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28.10
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5.80
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4.30
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0.02
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0.07
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0.04
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43.77
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230.28
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1,481.00
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1,082.0
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120.3
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453
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247
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358.80
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Inferred
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230.0
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18.90
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4.1
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4.3
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0.02
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0.07
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0.05
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33.04
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140.03
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935
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1,001
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102
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362
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246
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244.36
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Mineral resources in the above table were estimated as of March 30, 2011 for the Preliminary Economic Assessment Update Technical Report for Malku Khota by Allan
Armitage, Ph.D., P.Geo, of GeoVector Management Inc.
1) The resource cut-off grade of 10 g/t silver equivalent is based only on the values of silver at $16/oz and indium at $550/kg.
2) The silver equivalent calculation in the above table uses base case metal pricing with value for silver at $18/oz (Ag), indium at $500/kg (In), gallium at $500/kg (Ga), copper at $3/lb (Cu), lead at $0.90/lb (Pb),and zinc at $0.90 (Zn).
3) Contained metal values may vary from calculated values due to rounding. Estimated metal content does not include any consideration of mining, mineral processing, or metallurgical recoveries.
Malku Khota NI 43-101 Preliminary Economic Assessment Summary
| Heap Leach Operation |
40,000 tonnes per day |
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| Recovery |
Silver 80% |
Indium 70% |
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| Annual Production* |
13.2* M oz Silver |
80* tonnes of Indium |
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Base Case |
Mid Case |
Recent |
| Silver Price Per Oz |
$18/oz |
$25/oz |
$35/oz |
| Indium Price Per Kg |
$500/kg |
$570/kg |
$650/kg |
| Gallium Price Per Kg |
$500/kg |
$570/kg |
$730/kg |
| Net Annual Cash Flow* |
$185 M/year |
$287 M/year |
$430 M/year |
| Internal Rate of Return |
37.7% |
63% |
92.9% |
| NPV at 5% discount |
$704M |
$1482M |
$2571M |
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| Years to Pay Back |
27 months |
19 months |
15 months |
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*average first 5 years of production
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Gross Revenue Distribution
View and download the May 2011 Malku Khota Preliminary Economic Assessment Update Report in pdf format.
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