Lemuria Royalties Corp.

Lemuria Royalties Corp.

June 27, 2016 14:07 ET

Lemuria Royalties Announces the Acquisition of the Caylloma Royalty

TORONTO, ONTARIO--(Marketwired - June 27, 2016) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Lemuria Royalties Corp. ("the Company" or "Lemuria") is pleased to announce the acquisition of a silver royalty on Fortuna Silver's Caylloma Property located in the Caylloma District, Peru owned and operated by Minera Bateas S.A.C. a subsidiary of Fortuna Silver Mines Inc. The royalty is defined as a 2.0% Net Smelter Return ("NSR") which will only apply after not less than 21 million ounces of silver have been recovered from the Huayllacho beneficio (mill site). As at December 31, 2015 approximately 15 million ounces of silver have been recovered. The Caylloma royalty acquisition was purchased from Compañia Minera Arcata, a subsidiary of Hochschild Mining plc, in exchange for a one time up-front cash payment of US$1.5 million.

David Morgan, CEO of Lemuria, commented, "We are pleased to enter the royalty business with such an outstanding asset which is operated by one of the strongest silver mining companies in the region. This royalty will serve as a great foundation and provides us with momentum to selectively pursue and evaluate other investment opportunities."

Abraham Drost (MSc PGeo), President of Lemuria, also commented, "Caylloma is located in a top-tier geopolitical jurisdiction and has been in production since 1995. Since Fortuna Silver acquired the asset from Hochschild, Caylloma has produced close to 15 million ounces of silver and is well on its way to deliver silver ounces over and above the NSR threshold. It is our belief, based solely on existing mineral reserves, that the mine will continue to operate for at least five years and, as demonstrated in the past, has the opportunity to be extended further with close to 5 million ounces of silver in measured and indicated category and over 14 million ounces in the inferred category."

NI 43-101 Reserves and Resources

Mineral Reserves - Proven and Probable

Contained Metal
Property Classification Tonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(Moz)
Au
(koz)
Caylloma Mine, Peru
Silver Veins Proven 3 874 0.23 0.43 0.72 0.1 0.0
Probable 106 635 0.97 0.20 0.32 2.2 3.3
Proven + Probable 109 642 0.95 0.20 0.33 2.2 3.3
Polymetallic Veins Proven 251 129 0.47 2.07 2.36 1.0 3.8
Probable 1,619 85 0.23 3.13 3.96 4.4 12.1
Proven + Probable 1,870 91 0.27 2.98 3.74 5.5 15.9
Combined-All Veins Proven 254 138 0.47 2.05 2.34 1.1 3.8
Probable 1,724 119 0.28 2.95 3.73 6.6 15.4
Proven + Probable 1,979 121 0.30 2.83 3.55 7.7 19.3

Mineral Resources - Measured and Indicated

Contained Metal
Property Classification Tonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(Moz)
Au
(koz)
Caylloma Mine, Peru Measured 582 82 0.36 1.11 2.16 1.5 6.7
Indicated 1,269 84 0.31 1.14 2.10 3.4 12.7
Measured + Indicated 1,851 84 0.32 1.13 2.12 5.0 19.3

Mineral Resources - Inferred

Contained Metal
Property Classification Tonnes
(000)
Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(Moz)
Au
(koz)
Caylloma Mine, Peru Inferred 3,392 132 0.59 2.20 3.30 14.3 64.7

Notes:

  1. Source: Fortuna Silver Mines Inc.'s annual information form dated March 24, 2016.
  2. Mineral Reserves and Mineral Resources are as defined by CIM Definition Standards on Mineral Resources and Mineral Reserves.
  3. Mineral resources are exclusive of mineral reserves.
  4. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  5. There are no known legal, political, environmental, or other risks that could materially affect potential development of the Mineral Resources or Mineral Reserves at Caylloma.
  6. Mineral Resources and Mineral Reserves estimated as of June 30, 2015 and reported as of December 31, 2015 taking into account production-related depletion for the period through December 31, 2015.
  7. Mineral Reserves are estimated using break-even cut-off grades based on estimated NSR values using assumed metal prices of US$19/oz Ag, US$1,140/oz Au, US$2,150/t Pb and US$2300/t Zn; metallurgical recovery rates of 84.5% for Ag, 39.5% for Au, 92.6% for Pb and 89.9% for Zn; and actual operating costs incurred in period July 2014 through June 2015. Caylloma Mineral Resource are reported based on NSR values using the same metal prices and metallurgical recovery rates as detailed for Mineral Reserves; and an NSR cut-off grade of US$50/t for veins classified as wide (Animas, Animas NE, Nancy, San Cristobal) and US$100/t for veins classified as narrow (all other veins).

Information in this press release describing the Caylloma Property relies upon public disclosure provided by Fortuna Silver Mines Inc. and has been reviewed by Mr. Abraham Drost (MSc PGeo), President of Lemuria, who is a Qualified Person within the meaning of National Instrument 43-101. For more information on the Caylloma Property, please refer to the amended technical report titled "Fortuna Silver Mines Inc. Caylloma Property, Caylloma District, Peru" dated effected March 22, 2013, which can be found on Fortuna Silver's profile on www.sedar.com.

About Lemuria Royalties Corp.

Lemuria, a private Canadian company, is focused on the acquisition of royalties and streaming agreements in the mining sector. The Company will focus initially on de-risked assets which are close or in production and is in the process of developing, through an acquisition strategy, a diversified portfolio of metal streams and royalties. In addition to David Morgan and Abraham Drost, Lemuria's founding members include: Carlos Vicens, Chris Marchese and Johnny Mellgren. For more information, please visit www.lemuriaroyalties.com.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada and which are based on the expectations, estimates and projections of management of the parties as of the date of this news release unless otherwise stated. Forward-looking statements are generally identifiable by use of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" or the negative of these words or other variations on these words or comparable terminology. More particularly, and without limitation, this news release contains forward-looking statements and information concerning expectations regarding the Caylloma royalty, the Caylloma Property, the ability of Lemuria to continue raising capital and sourcing royalty and stream transactions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the uncertainties and risk factors set out in filings made from time to time with Canadian securities regulators and the United States Securities and Exchange Commission. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Lemuria disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Lemuria undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Lemuria, its financial or operating results or its securities.

Contact Information

  • Thunder Bay:
    Abraham Drost - President
    807.252.7800

    Toronto:
    Carlos Vicens - Director
    416.304.9595

 
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