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Chile - Santo Domingo

Location Map (Click picture to enlarge).

The Santo Domingo Project currently comprises four deposits: Santo Domingo Sur, Iris, Estrellita and Iris Norte. The Santo Domingo Project is 100% owned by Far West Mining (with a 2% Net Smelter Return royalty to third parties). The project was initiated in 2002 when Far West Mining and BHP Billiton formed a Strategic Alliance to explore for Iron-Oxide-Copper-Gold ("IOCG") deposits in northern Chile's IOCG belt. The IOCG belt stretches over a length of almost 1,200 kilometres from just north of Santiago in the south to the city of Antofagasta in the north along the coastal cordillera of Chile. The IOCG belt is one of the most prospective IOCG provinces in the world and hosts numerous copper deposits including Candelaria (470Mt @ 0.95% Cu) and Manto Verde (350Mt @ 0.75% Cu).

On September 6, 2007 the Company released resource estimates for three of the deposits (prepared by Scott Wilson Roscoe Postle and Associates Inc). The Indicated Resource at Santo Domingo Sur is 171.5 Mt grading 0.57% Cu and 0.08 g/t Au. Iris has an Indicated Resource of 31.2 Mt grading 0.46% Cu and 0.06g/t Au and Estrellita has an Indicated Resource of 31.7 Mt grading 0.53% Cu and 0.05 g/t Au. The Indicated Resources at the Santo Domingo Project combine for a total of 2.85 billion lbs of copper. All Resources have been estimated at a 0.3% Cu cut-off. The Iris Norte deposit was discovered after the completion of the resource estimates and no NI 43-101 compliant resource estimate has been completed for this deposit.

Detailed Location Map (Click picture to enlarge).

On April 1, 2008, the Company published the results of a preliminary economic assessment for the Santo Domingo Sur and Iris deposits conducted by AMEC Americas (Chile). The Estrellita deposit contains a significant oxide component that will have to be quantified by metallurgical tests before it can be incorporated into the scoping study.

The economic assessment investigates two mining options for the exploitation of the mineral resources on the property: the recovery of copper, gold and magnetite iron from the Santo Domingo Sur deposit (magnetite option) or the recovery of copper, gold, magnetite and hematite iron from the Santo Domingo Sur and Iris deposits (hematite option) The magnetite option envisions the production of an iron concentrate from magnetite (a magnetic iron oxide) in addition to copper and gold while the hematite option includes the production of iron concentrates from both magnetite and hematite (a non-magnetic iron oxide). The annual production of iron concentrate for the hematite option is four times that of the magnetite option. The preliminary economic assessment calculates favourable Net Present Values (NPV) for both options under certain metal price assumptions. At US$2.10/lb copper and US$50/tonne of iron concentrate at 65% Fe, the magnetite option has an NPV of US$270 million while the hematite option reaches an NPV of US$739 million.

The exploration potential of the Santo Domingo Property (200 sq km) remains high and the Company intends to carry out more exploration drilling in an effort to add to the outlined resources.

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This page was created on Thu Sep 9, 2010 at 5:18:38 PM Pacific Time.