cinabrio copper resource increases by 274%


































 


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9 May 2005
ASX ANNOUNCEMENT
Cinabrio Copper Resource Increases by 274%
The Directors are pleased to announce a 274 % increase in the Cinabrio (Chile)
copper resource. SMC has confirmed the existence of three new blocks in the
Cinabrio property. In March 2005 SMC completed the drilling programme at Cinabrio,
Chile. The Rights Issue prospectus issued in December 2004 identified the potential for
7 blocks. This recent drilling program has now identified 4 of the 7 blocks [and it is
anticipated that further drilling planned for 2006 will further define the Cinabrio area].
Using the experience from mining operations, previous drilling data, data from a recently
completed detailed surface mapping programme and the new drilling data, SMC has
completed a thorough review of resource calculations at Cinabrio. As a result, the
company announces that the copper equivalent tonnes (tonnes Cu) have increased
from 28,231 tonnes Cu to 105,552 tonnes Cu.
This substantial increase in resource further extends the mine life of SMC’s Chile
operations and comes at a time when SMC is completing the final stages of the
expansion and upgrade of the Punitaqui process plant to 1,500 tonnes per day. The
expansion is expected to be completed by August 2005.
A summary of better results from the recent programme follows:
Block 0
· 38m (true width 34m) @ 1.52% Cu from 109m in Hole SD-18
Including 10m (true width 9m) @ 2.95% Cu from 109m,and;
8m (true width 7m) @ 1.88% Cu from 139m
· 32m (true width 23m) @ 1.46% Cu from 144m in Hole SD-19





































Block 2
· 8m (true width 7m) @ 1.91% Cu from 45m in Hole SD-2
Significantly, the copper mineralisation in this intersection is mainly soluble copper –
1.76% Cu soluble.
Block 4
· 84m (true width 28m) @ 1.34% Cu from 57m in Hole SD-10
· 32m (true width 24m) @ 1.56% Cu from 136m in Hole SD-10A
· 29m (true width 28m) @ 2.23% Cu from 44m in Hole SD-13
· 40m (true width 33m) @ 1.59% Cu from 41m in Hole SD-13A
· 32m (true width 21m) @ 1.36% Cu from 76m in Hole SD-14
Important Changes to the Cinabrio Resource
As a result of the availability of additional data from the comprehensive surface mapping
programme at Cinabrio, the recent drilling results and the new data available from the
continuing development of the mine on the 390 metre Level, the 410 metre Level and the 440
metre Level, including some underground drilling, the resource calculation for the Cinabrio mine
has again been updated.
Calculated Resource Cinabrio - September 2004
Resource Tonnes Average
Width
Cu
(%)
Au
(g/t)
Ag
(g/t)
Au Eq
(oz)
Cu Eq
(Tonnes Cu)
Measured 495,000 18.86 1.92 0.05 27 68,895 10,714
Indicated 580,000 17.17 1.87 0.05 27 78,860 12,264
Inferred 270,000 15.00 1.75 0.05 21 33,780 5,253
TOTAL 1,345,000 17.36 1.86 0.05 25.8 181,535 28,231
Recalculated Resource Cinabrio - April 2005
Resource Tonnes Average
Width
Cu
(%)
Au
(g/t)
Ag
(g/t)
Au Eq
(oz)
Cu Eq
(Tonnes Cu)
Measured 774,373 25.00 1.45 0.10 25 84,811 13,190
Indicated 1,769,366 26.93 1.48 0.05 17 187,862 29,216
Inferred 3,965,895 25.50 1.50 0.01 11 406,040 63,146
TOTAL 6,509,634 25.83 1.49 0.03 14 678,713 105,552





































Notes:
· Some of the drillhole intercepts used in this resource calculation include subgrade
ore material. Depending on the stoping method selected, it may be
possible to exclude this material from the ore mined. In this instance the average
grade of the ore mined would improve and the tonnage available for mining
would decrease.
· It is worth noting that the average equivalent copper grade, including gold and
silver, is 1.75 percent Cu equivalent in the new resource.
· The Cinabrio mine is essentially a copper mine. However, for the sake of
completeness both gold equivalent and copper equivalent figures have been
calculated
· Gold and copper equivalent figures have been calculated using a copper to gold
ratio of 1% copper : 1g/t gold of 2:1 and a silver to gold ratio of 1g/t silver : 1g/t
gold of 61.5:1.
· Although a significant copper oxide intercept was recorded in Block 2 no
resource calculation was done on Block 2 at this time. This will be done once
further drilling information is obtained on the block.
· A relatively large proportion of the Cinabrio resource in the new resource
statement is in the Inferred category. However, the company is confident that a
large proportion of this Inferred category will be upgraded to a higher category by
further drilling. Furthermore, potential exists to discover more resources outside
the boundaries of the currently defined resource.
SMC is currently exploiting Block 1 at Cinabrio at the rate of 1,000 tonnes per day. Currently,
the Cinabrio mine is being electrified to facilitate the full mechanisation of the mine. Two electric/
hydraulic jumbos plus ancillary equipment are in transit from SMC’s Australian operation at
Charters Towers where mining has now ceased. The company is confident that production from
Cinabrio, once fully mechanised, will improve to 1,300 tonnes per day to satisfy the bulk of the
expanded plant capacity.
The company’s mineral resources in Chile are in no way involved in the warranty claim leading
to the granting of an interim order by the Queensland Supreme Court prohibiting the sale of 17
million shares in SMC owned by the vendor. SMC remains focussed, secure and committed to
operations in Punitaqui.
Contact for further information is: Rob Kidd on 07 3839 4166 or 0409 872544
Yours sincerely
Rob Kidd
Managing Director
In accordance with the Australian Stock Exchange Limited Listing Rules 5.10, 5.12 and 5.13, technical information
contained in this report has been compiled by a competent person who is a member of the Australasian Institute of
Mining and Metallurgy and who has consented in writing to the inclusion of such technical information in the form in
which it appears in this report. The competent person is Robert G Kidd who is the Managing Director of SMC Gold
Limited.