positive scoping study results for ann mason

PacMag Metals Limited
Level 2, 33 Ord Street, West Perth, Western Australia 6005
PO Box 1569, West Perth, Western Australia 6872
Tel: (+61-8) 9481 2997 Fax: (+61-8) 9321 0070
PACMAG METALS LIMITED
ABN 73 066 353 231
11 December 2006
ASX ANNOUNCEMENT
POSITIVE SCOPING STUDY RESULTS FOR ANN MASON
COPPER-MOLYBDENUM DEPOSIT
KEY POINTS
• Ann Mason Scoping Study Model indicates;
o NPV (8%) of US$1.73 billion (discounted cash flow valuation) and internal rate
return of 25.6% using 3 year average LME cash copper price of US$2.24/lb (in
accordance with US Securities and Exchange Commission (SEC) guidelines);
o Mining schedules derived from optimised pits using the October 2006 Inferred
Resource for Ann Mason, producing average of 130,000 tonnes copper and 1600
tonnes of molybdenum per annum, at an ore to waste strip ratio of 1:1.64;
o 34 year mine life with total revenue of US$23.1 billion and net positive cash flow
(undiscounted) of $US9.31 billion including capital costs and Nevada state net
proceeds of mining tax; and
o Payback period of 5 years with cash operating costs of $US1.18/lb copper
equivalent.
• Discounted cash flow valuation rises to US$4.22 billion (NPV8) using current metal
prices of US$3.15/lb copper and US$27.5/lb molybdenum and payback period is
reduced to 3 years.
• Drill rig booked and confirmed to start in January 2007 to test well defined resource
growth targets and nearby Blue Hills porphyry copper target.
• Given the positive outcome of the Scoping Study, the Company intends to commence a
more comprehensive study (Pre-Feasibility Study) of the economics of development of
the Ann Mason project.
The Directors of PacMag Metals Ltd ("PacMag") are delighted to report results from the
Company's mining Scoping Study for the Ann Mason Copper-Molybdenum-Gold deposit owned
100% by PacMag Metals Limited. The deposit is located in Nevada USA within a well known
mining district. The Ann Mason project consists of a total of 210 unpatented mining claims
covering a deposit discovered in the 1970s by Anaconda Copper Corporation.
Ann Mason Mining Scoping Study
The Scoping Study shows that under the 36 month average copper price assumptions the Ann
Mason copper-molybdenum deposit has a high potential to provide a very significant financial
return based on the Inferred Resource of 810 million tonnes @ 0.40% copper and 0.004%
molybdenum (0.30% copper cut off) with higher grade zones including 221 million tonnes @
0.51% copper and 0.004% molybdenum (at a 0.43% copper cut off) as announced to the ASX
on 5 October 2006.
The Company engaged a multi-disciplined team including mining consultants Golder Associates
Pty Ltd (Golder), metallurgical specialists Metallurgical Project Consultants (MPC) and USA
based environmental consultants Gochnour and Associates (GA) to undertake a scoping-level