FOR IMMEDIATE RELEASE
Positive Findings of Transportation Study for Cuervo Resources’ Iron Ore Project in Perú
March 17, 2009 – Toronto, ON
Cuervo Resources Inc. (CNSX-FE; FWB-CRR; “Cuervo” or the “Company”) is pleased to report that the findings of a comprehensive transportation study lend further support to the positive future of development at its Cerro Ccopane iron ore project in Perú. The mandate of the study was to assess various methods of transport from site to a port area and to provide preliminary estimates of capital expenditures (“CAPEX”) and operating expenses (“OPEX”) for each proposed scenario. The transport methods examined included road, rail, conveyor and slurry pipeline and combinations thereof. Underlying the study were prospective annual production rates at volumes of 5, 10 and 20 million tonnes of iron ore.
The study, entitled “Cuervo Resources, Cerro Ccopane Mine Perú: Mine to Port Conceptual Transport Study” was prepared by Sandwell Engineering Inc. (“Sandwell”) of Vancouver, BC with input from PSI Engineering Inc. also of Vancouver. Mr. Frank Hanson of Frank Hanson Consulting of Kila, Montana, the Company’s transportation advisor, provided the initial specifications for the study. The study was initiated in response to the continuing success of the ongoing program of exploration drilling on the Cerro Ccopane property which is located 65 km south of Cuzco, Perú and approximately 320 km north of the Pacific tidewater port at Matarani, Departmento Arequipa, Perú.
The principal findings and recommendations of the Sandwell report may be summarized as follows:
•Transportation of material from the Cerro Ccopane property does not present unique logistical challenges. All examined transport scenarios are technically feasible;
•A slurry pipeline from the property to port is considered to be the best overall transportation alternative at this time. It is noted that similar pipelines for mining operations of comparable proposed capacities are presently in operation elsewhere; and
•Recommendations for further studies include additional port studies at Matarani and linking future mineral-processing studies with future transportation evaluations.
Commenting on the Sandwell study, Cuervo President, John Siriunas said, “While we are still early in our exploration program at Cerro Ccopane, the availability of cost effective transportation facilities is integral to the economics of developing iron ore properties.
“We believe we are looking at a very competitive cost structure. For example, if we consider a scenario involving a slurry pipeline to port, based on a production rate of 20 million tonnes per year and a 20 year mine life, our median total transportation cost, that is, including CAPEX and OPEX, is estimated to be $US8.04 per tonne. Even at 10 million tonnes per year production, the median cost would be only $US10.12 per tonne. These estimates exclude the cost of permits, licenses, right-of-ways and power transmission. CAPEX is estimated at -35%/+50% and OPEX at -/+50%.
“We are encouraged by these current findings which give us additional confidence in the potential to advance our project.”
The Company has 30,179,750 shares outstanding (41,856,000 fully diluted).
For further information, please contact Mr. Siriunas, a director and President of Cuervo, at 416-203-3957 x701 or Mr. Tom Berner, Investor Relations, at 416-203-3957 x202. Additional information about Cuervo can be found at the Company’s website at http://www.cuervoresources.com.
The Canadian National Stock Exchange (CNSX Markets Inc,) has neither approved nor disapproved of the contents of this press release.