Ann: Mining Study Update - Yukon Base Metal Proje, page-32

re: Ann: Mining Study Update - Yukon Base Met... Kissie, if you need OVR announcements, I may be able to help.

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Extract from OVR Announcemnt 9/6/2009
Yukon Base Metal Project Economic Evaluation.
(Market Sensitive Ann)


POTENTIAL CONFIRMED FOR OPEN PIT AND UNDERGROUND MINING OPERATION
YUKON BASE METAL PROJECT, CANADA
?? Independent economic evaluation of developing a mining operation at the Yukon Base Metal Project completed
?? Potential to economically develop an open pit and underground mining operation to supply a single processing facility
?? Cash cost of concentrate production of $0.31/lb of zinc equivalent1
?? Low initial CAPEX estimate US$94 million
?? US$210 million1 undiscounted cash flow before CAPEX, for the period under study
?? Considerable underground and open pit expansion potential
?? Significant potential for additional discoveries
?? Bankable feasibility study and mine permitting seen as a priority
Overland Resources Limited (ASX: OVR and “Overland Resources”) is pleased to provide the results from a preliminary mining evaluation conducted on the Company’s 90% owned Yukon Base Metal Project in the Yukon Territory of Canada. The evaluation indicates that the establishment of an open pit and underground mining operation at the Yukon Base Metal Project is potentially economically viable.
A 700,000 tonne per annum (tpa) processing plant is proposed to produce separate zinc and lead concentrates. An initial 6 year mining operation would produce 493,000 tonnes of zinc concentrate and 135,000 tonnes of lead concentrate. There is considerable potential for expansion through optimisation and with further exploration success.
With the parameters applied the operation provides an undiscounted cash flow of US$210 million1 before capital, depreciation, tax and royalties.
Capital costs are estimated to be US$94 million, which includes a 10% allowance for Engineering, Procurement, Construction and Management (EPCM) as well as a 25% contingency.
Mining costs are estimated to average US$13.57 per tonne of ore for the combined Andrew and Darcy open pits and US$45 per tonne of ore for underground operations at the Andrew Zinc Deposit.
Processing costs are estimated to be US$24.93 per tonne and G&A (administration) costs are estimated to be US$9.00 per tonne of ore.
At the proposed production rate and metal prices these costs equate to a total concentrate production cost of US$0.31/lb of zinc equivalent1.
It is planned to transport concentrate via truck to the ice free Port of Skagway in Alaska. Existing ore handling facilities at the Port would be utilised to load ships with concentrate for transportation to an Asian discharge port. Estimated total transport cost equates to $0.12/lb of zinc equivalent1.
This is an outstanding result for the Company, which sees the completion of a bankable feasibility study on the Yukon Base Metal Project and submission for mine permitting as a priority.
1 Metal prices used US$1.00/lb Zinc and US$1.00/lb Lead