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Colossus Minerals Provides Development Update

05/15/2013

TORONTO, ONTARIO--(Marketwired - May 15, 2013) - Colossus Minerals Inc. (the "Company" or "Colossus") (TSX:CSI)(OTCQX:COLUF) is pleased to provide a development update for its 75% owned Serra Pelada gold-platinum-palladium Mine. The Serra Pelada Mine is a joint venture between Colossus and Cooperativa de Mineração dos Garimpeiros de Serra Pelada ("COOMIGASP") located in the State of Pará, Brazil.

HIGHLIGHTS

  • The Company remains on track for initial production in the third quarter of 2013 at a rate of 250 tonnes per day ("tpd"). Ramp-up plans indicate 1,000 tpd is achievable by the end of the first quarter of 2014.
  • Given that the process plant will be available in August, the Company has decided to process the bulk sample on site.
  • The Company has encountered potential mineralization 30 to 40 metres ahead of the expected start of the Central Mineralized Zone ("CMZ"). Preliminary assay results indicate the potential for a lower-grade halo. Full results will be released once complete assays are received and analyzed.
  • Ground conditions have been better than expected. Consequently, the Company is currently evaluating a number of different mining methods. Preliminary results from this geotechnical evaluation indicate that a more cost effective alternative to underhand-cut-and-fill, such as overhand-cut-and-fill, may be achievable in certain sections of the mineralization.
  • Due to the existence of potential new mineralization, the evaluation of different mining methods and the Company's ability to process on-site, management has decided to expand the size of the planned 1,500 tonne bulk-sample. The Company will provide further details once planning is finalized.
  • The construction team is expected to turn over the process plant to the operating team by the end of July. The total project is currently 80% complete with 95% of concrete having been poured and civil construction now in its final phases. The civil contractor is now 50% demobilized with the remaining focus on completion of the gold room. Structural steel erection is 35% complete and installation of tanks and principle equipment is well underway.
  • Underground development currently totals 1,950 metres and the Company has averaged 3.1 metres per day since the beginning of April. An additional 1,750 metres of development is necessary to achieve a processing rate of 1,000 tpd by the end of the first quarter of 2014. Management plans to complete this development between August 2013 and March 2014 and is assuming conservative daily development rates of 2.5 metres per day from each of four development crews.
  • Other infrastructure development remains on schedule. Commissioning of the power house has commenced and the site should be connected to the grid before the end of June. The tailings dam is expected to be ready in conjunction with the start of mill commissioning.

Claudio Mancuso , Chief Executive Officer commented, "We are now past the peak construction period on site and we remain focused on building the mill at Serra Pelada and developing the mine and its infrastructure in a safe and cost-effective manner. While still early, we are excited about the new zone of mineralization encountered ahead of the CMZ and believe the on-site processing of the bulk sample will provide additional benefits and insight for the commencement of production. I am pleased and encouraged with the progress to date and the entire Colossus team is excited to be on track to becoming the industry's next gold producer."

CONSTRUCTION AND DEVELOPMENT ACTIVITIES

Underground Development

Due to better than expected ground conditions, the Company is currently conducting a comprehensive evaluation of a number of different mining methods. Preliminary results from this geotechnical evaluation indicate that a more cost effective alternative to underhand-cut-and-fill may be achievable in certain sections of the mineralization. The Company is evaluating alternatives such as overhand-cut-and-fill and other methods and a final determination will be made ahead of the commencement of production. This evaluation led to the procurement of new equipment and ground support tools which are now on site. The information gathered from this work is assisting management in determining whether an alternative mining method will be viable for the CMZ which could potentially lead to better mining parameters than are currently being modeled.

The bulk sample has been changed in scope as a result of the recognition of additional mineralization during the course of development. The Company encountered mineralization 30 to 40 metres ahead of the CMZ (as that zone is interpreted from surface drilling) and is currently planning to expand the bulk sample in order to incorporate the collection and geological interpretation of this additional mineralization. More details will be provided as this planning is finalized. Preliminary assays have been received indicating previously unmodelled mineralization. While still early stages, the preliminary results suggest a halo of lower-grade mineralization which has the potential to be incorporated into the Company's mine plan. The Company will release the full results of these assays once they are all available. As a result, management now expects to complete collection of the bulk sample prior to the end of the second quarter. The bulk sample excavation will be extended to become the first mining level and approximately 10,000 tonnes of material will be stockpiled during June and July, in advance of commissioning the process plant.

Results from the expanded bulk sample program will be incorporated into the initial NI 43-101 compliant resource report which will be completed after the processing of the bulk sample and the subsequent analysis of the results. Given the Company's ability to process material on site commencing in August, management, in conjunction with its consultants, has decided to treat the entire bulk sample through the process plant. Given the new information, and projected turnaround times for overseas shipping, processing and receiving results, management believes the grade of the bulk sample can be ascertained more quickly, and at lower cost, by keeping it on site rather than sending it to a test lab outside of Brazil. Management expects the results from the initial months of mining and processing, inclusive of the results from the on-site processing of the bulk sample, to enable the Company to better project grades and tonnage for production through to the end of December 2014.

The Company has advanced work on the mining plan taking into account the geotechnical information being gathered through the bulk sample collection process. The Company anticipates that a production rate of 1,000 tpd will be achievable with six working faces over two operating horizons. While the Company is still finalizing its mine plan, management remains confident that 1,000 tpd will be reached by the end of the first quarter of 2014.

To date, the Company has currently completed approximately 1,950 metres of total development; 1,250 primary and 700 metres secondary development, compared with 1,800 metres of total development as of March 27, 2013. Development rates have averaged 3.1 metres per day since the beginning of April. Development within the mineralized zone is ongoing and is sufficient to sustain a processing rate of 250 tpd between August and November 2013. Management anticipates achieving a processing rate of 500 tpd in December. Current planning indicates that a total of 1,250 metres of additional development is required between August and the end of November to achieve this rate. This development will be accomplished through ramping up from one to four crews and sets of equipment. Over this 120 day period, management is assuming a development rate of 2.5 metres per day from each development crew. The Company anticipates achieving a processing rate of 1,000 tpd by March 31, 2014. An additional 500 metres of development is required in the first quarter of 2014 to increase the processing rate from 500 tpd to 1,000 tpd. This additional development will be achieved with two crews each achieving 2.8 metres per day while the remaining crews and equipment focus on production mining.

To achieve the development discussed above, the ventilation system requires expansion to provide sufficient air to support four crews and sets of equipment. The expansion work includes widening and concrete lining the artisanal shaft which will be used as a ventilation raise and development of a drift to tie the ramp to this ventilation raise at depth. The ventilation expansion project is 40% complete. Development of this drift towards the ventilation raise is entirely in red siltstone and development rates have been as expected. The Company has completed approximately 60 metres of this drift with approximately 90 metres of development remaining.

Process Plant

The various phases of the process plant construction, along with respective percentages complete are presented in the table below. The ball mill refurbishment and earthworks are complete.

Mar 27 May 15 Update
Total Project 70 % 80 %
Process Plant
Engineering 97 % 99 %
Procurement 97 % 98 %
Civil construction 90 % 95 %
Structural steel fabrication 55 % 70 %
Structural, mechanical, piping & electrical installation 30 % 35 %
Power house 85 % 90 %
Ventilation upgrade 20 % 40 %
Tailings impoundment facility 10 % 20 %

As of May 15, 2013, the Company has completed 95% of the concrete placement and civil contractors have been 50% demobilized. Civil construction work is currently focused primarily on the gold room. The Company is well advanced with structural, mechanical, piping and electrical installations in various areas of the project including the primary crusher, transfer tower, conveyors, reagents building, mill feed bin, thickener and gold room. Of the approximately 570 tonnes of structural steel to be erected 70% has been fabricated and 35% has been erected. The thickener fitting and welding is substantially complete and the bridge has been installed. Several pieces of major equipment have been placed (including pumps, tailings sampler, primary and secondary crushers and apron feeder) and preparations to install others are advanced. Please click on the following link to see updated pictures of construction progress: http://media3.marketwire.com/docs/CSI515.pdf.

Basic engineering and design of the flotation plant is ongoing and will be complete in the fourth quarter of 2013 after receipt of metallurgical test results. Management's new plan for treating the bulk sample on site will lead to the availability of more representative metallurgical test material than would be provided from the original plan of testing ten 300 kilogram samples. Construction of the flotation plant is expected to commence in the first quarter of 2014 and is expected to be complete by the end of the first half of 2014.

Infrastructure

Surface construction activities continue to focus on the power house and tailings dam. Construction of the power house is 90% complete with the generators now installed. Commissioning of the power house has commenced and 100% capacity is expected by the time the process plant commences operation. It is important to note that 50% power generation capacity is sufficient to operate all current mine services and infrastructure. The power house design was modified to allow connection with a 34.5 kV transmission line constructed by Equatorial Energia SA ("Equatorial Energia") (formerly Centrais Eléctricas do Parà SA or CELPA). The power supplied by Equatorial Energia will be lower cost and will be backed up by power from the diesel generators, which are being commissioned as noted above. Equatorial Energia has recently advised the Company that connection to the grid is now scheduled by the end of June. Increased power consumption will not occur until the mill building is operational early in the second half of 2013. Therefore, this delay in connecting to the grid will not have a material impact on the Company's construction schedule or costs. Tailings' dam construction is approximately 20% complete and remains slightly ahead of schedule. Earthworks are well underway and the completion of the tailings dam is on track to be completed in conjunction with mill commissioning.

About Colossus:

Colossus is a development-stage mining company focused on bringing its 75% owned Serra Pelada gold-platinum-palladium Mine into production. The Serra Pelada Mine is a joint venture between Colossus and COOMIGASP located in the State of Pará, Brazil. Serra Pelada, located in the mineral prolific Carajas region in the State of Pará, is host to one of the highest grade gold and platinum group metals deposits in the world. Between 1980 and 1986 Serra Pelada was host to the largest precious metals rush in Latin American history. Colossus Minerals Common Shares, warrants and notes trade on the Toronto Stock Exchange (TSX) under the symbols CSI, CSI.WT.A and CSI.NT respectively and in the United States its Common Shares trade on the OTCQX under the symbol COLUF. The Company is headquartered in Toronto, Canada.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Forward-looking statements in this press release include statements regarding the timing and nature of future exploration and development programs that are dependent on projections that may change as drilling continues, or if unexpected ground conditions are encountered. The Company does not currently have any mineral properties that are in production or that contain a reserve as defined by National Instrument 43-101. In addition, areas of exploration potential are identified which will require additional drilling to determine whether or not they contain similar mineralization to areas that have been explored in more detail. Significant additional drilling is required at Serra Pelada to fully understand system size.

Except for statements of historical fact relating to Colossus, certain statements in this press release relating but not limited to the Company's exploration and development plans, activities and intentions, constitute "forward-looking information" within the meaning of the Securities Act (Ontario) or "forward-looking statements" within the meaning of the United States Private Litigation Reform Act of 1995. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable. Forward-looking statements are frequently characterized by words such as "target", "plan", "expect", "project", "intend", believe", "anticipate" and other similar words, or statements that certain events or conditions "appear to", "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The factors include but are not limited to risks related to the joint venture operation, actual results of exploration activities, the inherent risks involved in the exploration and development of mineral properties, changes in project parameters as plans continue to be refined, delays in obtaining government approvals, the uncertainties of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, the uncertainties inherent to conducting business in Brazil and the rest of Latin America, the availability of equipment and supplies, unexpected adverse climate conditions, the reliance on only a few key members of management, as well as those factors discussed in the section entitled "Risk Factors" in the Company's most recent Annual Information Form filed with Canadian provincial securities regulatory authorities and other regulatory filings which are posted on SEDAR at www.sedar.com. Unless required by law, Colossus undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact Information:

Colossus Minerals Inc.

Ann Wilkinson

VP, Investor Relations

(416) 643-7655

awilkinson@colossusminerals.com

www.colossusminerals.com