43-101 2007 Technical Report On The San Antonio Project, Baja ...

Derry, Michener, Booth & Wahl Consultants Ltd. Page 6118.0 OTHER RELEVANT DATA AND INFORMATION18.1 GeneralOther than the description of Cut-Off Grades below, there is no other relevant data orinformation not described in previous sections.18.1 Selection of Cut-Off GradesDMBW has derived a cutoff grade of 0.40g/t Au for the resource estimation in Section 17above. Lacking any determination of operating cost and revenues for Planes, as per aFloating Cone Evaluation, this selection of a cut off grade is only an initial generalguideline for the Planes Inferred Resources. At this initial resource stage, the cutoffreflects the opinion of DMBW as regards the relative positioning of the Las Planesdeposit with its peers.The selection of a cutoff grade at this early stage of project development is a bestestimate based on the known geometry and grade of the zone and on the materialreviewed below. A Preliminary Economic Analysis, as recommended by DMBW, isneeded to determine a more accurate cut-off grade.DMBW reviewed a variety of breakeven cut-off grades used by operators of open-pit,heap-leach gold deposits and mines currently (or within the past 4 years), in operation, orin various stages of pre-feasibility, or feasibility studies. The deposits are all of thelow-grade gold, or gold-equivalent, type; six are located in Mexico, and one, Mesquite, inCalifornia. They are described in general terms in this section and tabulated below.The data is publicly available on either the companies’ websites, or on SEDAR andfeatures the opinions of two companies, Metallica and Gammon Gold and by those ofdifferent independent geologists and engineers.As shown in Table 18.1 the cut-offs range from 0.20g/t to 0.50g/t Au, the latter atParedones as selected by Mine Development Associates (MDA). (see also Section 8.2)This deposit is a direct analogue of Planes but has only sulphide ore, thus reflecting thelower leach-recovery, and hence, the higher cut off grade.In this study, DMBW have examined data for both Indicated and Inferred MineralResources in the determination of Cut-off grades for Mineral and Mining Reserves,which are normally lower than those for Resources, are excluded from the overallaverage, as they are derived with the benefit of a much greater reliability of data andcosts.The gold prices stated in the reports were selected by the engineers as suitable longer –term prices for forecasting project revenue; they show a dramatic rise from $350/oz in2004 to $650/oz in 2007.