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The Tepal Project is located in Michocan State, Mexico, 170km south of Guadalajara, and approximately 12 km from the nearby town of Tepalcatepec.
The property covers an area of 13,843 hectares or approximately 172 sq. km on flat lying topography.
Solid infrastructure is a key feature of the Tepal project, with paved roads to within 8km of the project, graded gravel roads to site, power and skilled workers 14km away, rail head within a 1.5 hour drive, and road and rail access to Mexico’s largest deep sea port providing Pacific Rim access.
The current Tepal resource is hosted in three zones, the North Zone, the South Zone and the Tizate zone.
Previous operators drilled 119 holes totalling 16,800 metres within the project area. This drilling was the basis for a 2009 43-101 resource estimate of 1.1 million oz gold and 413 million pounds copper.
Upon acquisition in 2010, Geologix contracted independent engineering firm, SRK Consulting to complete a Preliminary Economic Assessment on the project.
Additionally, the company launched a drill program focused on increasing the resource. The results were dramatic.
In a single drill program, the company discovered a new mineralized area, called the Tizate Zone, and expanded both the North and South zones. In doing so, the company was able to nearly double its resources.
to 800K oz Au inferred plus 800K oz Au indicated; and 414.8MM lbs Cu inferred plus 311.1MM lbs Cu indicated.
A portion of expansion drilling took place around the perimeter of the North and South zones, with step-outs ranging from 50 to 150 metres.
Drilling results included :
95 metres grading 1.18 g/t gold and 0.39% copper, open at depth (TEP-10-020);
112.2 metres grading 0.35 g/t Au and 0.21% Cu (TEP-10-019).
Mineralization at both of these zones remains open at depth as neither has been drilled beyond approximately 200 metres, and several historic holes ended in mineralization.
The North zone measures approximately 1000 metres by 500 metres and remains open to the north and at depth; the south zone now extends 500 metres by 500 metres and is open to the to the south and at depth.
Geologix geophysical work identified a priority target approximately 1.5 kms to the east of the North and South zones. Initial drilling of the target lead to the discovery of a new mineralized zone called Tizate.
Results at Tizate included 112.2 metres grading 0.36 g/t Au and 0.22% Cu (Hole TEP-10-36) and 98.6 metres grading 0.28 g/t Au and 0.23% Cu (TEP-10-39). Results from the Tizate drilling accounted for one-third of the tonnes in the updated resource estimate.
The Tizate Zone remains open in multiple directions.
As a result of the success of the 2010 drilling, Geologix is optimistic about the potential to continue to grow the resource at the Tepal Project.
In approximately one year, the company has been able to significantly improve the project economics.
According to the 2011 PEA at 25,000 tonnes per day, LOM ore throughput increased from 68.7Mt to 144.5Mt; total recoverable metal increased from over 2MM AuEq to 3.48MM AuEq; and the NPV jumped from $357MM to $412MM (at a 5% discount).
The latest PEA also projected increasing the mine life by 118% to 18.1 years.
As a result of improved project economics, the $312 million dollars required capital would be paid back in just 4.1 years.
A combination of outstanding infrastructure, low strip ratio, and favourable metallurgical recoveries make for low operating costs of $8.05 per tonne of ore processed, or $478 per oz AuEq, well below the industry average.
Geologix Explorations is rapidly advancing its 100% owned Tepal Gold and Copper project. With seven drills turning on the project as of June 2011, the company expects to continue its resource expansion efforts while converting current resources to a measured and indicated category.
This will lead to a 2012 Pre-feasibility study and application of permits required to move toward mine construction, planned for late 2013.
Disclosure: No Positions
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