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| G-9 Overview : To Become A World Class Zinc Mine with Low Cash Costs Beyond G-9 : The Path to Future Success Farallon's ultimate goal is to become a multi-mine, mid-tier, low-cost mining company through the advancement of the G-9 Mine which is now in full commercial production. The G-9 Mine is targeted to be in the lowest quartile of zinc producers on a global scale when all the operating targets are achieved. When the mine is producing cash flow, Farallon will reinitiate the exploration program on the entire Campo Morado property. Currently the existing deposits (Reforma, Naranjo, El Rey, and El Largo) host an indicated resource of over 11 million tonnes, which could potentially amount to an additional mine-life of 20 years for Farallon. In addition to operations and exploration potential, Farallon also intends to grow through selective accretive acquisitions that fit into the long-term plans of Farallon to become a multi-mine, mid-tier, low-cost mining company. The pathway is in place for Farallon to succeed, as long as we meet our objectives on a step-by-step basis. The rewards down the road to shareholders will be the creation of a strong long-term viable mining company. Farallon's primary focus for the last 2 years has been to extensively implement the development and operating plan outlined in the Company's December 2007 Preliminary Economic Assessment. That plan involved the rapid development of the G-9 mine resulting in a world class zinc mine that has the potential to have low cash costs relative to the other zinc mines in the world. The plan is now almost complete. Through the "Parallel Track" approach to development, project construction was advanced at a rapid rate and the mine and mill were substantially complete on July 1st, 2008 -- the start-up target date. G-9 has the benefit of significantly high grades of zinc and several significant by-product credits due to the high levels of copper, lead, gold and silver in the G-9 mineralization. Farallon's target is to be in the lowest quartile cost segment of the cost curve for zinc producers worldwide. This will allow the company to operate profitably even in times of low metal prices. Management has worked diligently to ensure that every aspect of the development has gone smoothly. All that remains is for the company to make the final transition to operations and to meet the operating costs that are outlined in the Preliminary Economic Assessment. The final capital cost for G-9 was given as $149.7 million which is within 20% of the original estimate provide in the Preliminary Economic Assessment in December 2007. The annualized production target is to produce 120 million lbs of zinc, 15 million pounds of copper, 1.5 million ounces of silver, 14,500 ounces of gold and 6 million pounds of lead. The mine achieved the design capacity of 1,500 tonnes per day on a sustained basis from March 5, 2009 and commercial production was announced as of April 1, 2009. While production slipped in January and February, the company is on target to advance toward its production goals. Farallon has an off-take agreement for the concentrates produced at the G-9 deposit with Trafigura. In February the first vessel shipments of concentrates were made to smelters in Asia. The Company shipped 10,800 tonnes of zinc concentrate, 1,000 tonnes of lead concentrate, and 1,000 tonnes of copper concentrate. Regular vessel shipments will continue throughout the year. The focus now is on achieving our operating targets. Once this is achieved, the Company will then start to fully explore the other deposits on the Campo Morado property that should ultimately lead to creating a world class mining district. Farallon's goal is to convert the exploration potential into the expansion of G-9 or the development of new mines on the Campo Morado property. Farallon will then be well on its way to becoming a multi-mine, mid-tier, low-cost mining company. |
G-9 Mine : Overview
Location
History of G-9
Development
Production & Mine Plan
Processing
Marketing
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