Attached files
| file | filename |
|---|---|
| 8-K - Searchlight Minerals Corp. | v198127_8k.htm |
| EX-10.3 - Searchlight Minerals Corp. | v198127_ex10-3.htm |
| EX-10.2 - Searchlight Minerals Corp. | v198127_ex10-2.htm |
| EX-10.1 - Searchlight Minerals Corp. | v198127_ex10-1.htm |
SEARCHLIGHT
MINERALS CORP. TO PURSUE AUTOCLAVING TO EXTRACT PRECIOUS METALS FROM CLARKDALE
SLAG PROJECT
COMPANY
ANNOUNCES EXPENSE CONTROL INITIATIVES AND CHANGES TO MANAGEMENT AND BOARD OF
DIRECTORS
HENDERSON,
Nevada (October 4, 2010) -- Searchlight Minerals Corp. (OTCBB: SRCH)
(“Searchlight,” “SMC” or the “Company”), an
exploration stage minerals company focused on precious metals projects in
the southwestern United States, today announced certain changes to its executive
management team and Board of Directors and the Company provided the following
update regarding its Clarkdale Slag Project (the “Project”) in north-central
Arizona.
Overview
On August
16, 2010, Searchlight Minerals, coincident with the filing of its 10-Q for the
quarter ended June 30, 2010, provided a review of the activities undertaken by
the Company’s management and technical teams in pursuit of the economic
extraction of precious and base metals from the Project.
In
response to various technical challenges, primarily involving crushing and
grinding issues associated with initial efforts to extract precious metals using
a benign leach chemistry, the Company’s Board of Directors and management team
in early 2010 elected to supplement its internal technical team with a new
Project Manager and additional engineers consisting of specialists in grinding,
leaching, autoclaving, filtration, resins, solvent extraction and
electro-winning. A key goal of the strengthened technical team has
involved the investigation of alternative grinding, leaching and extraction
methods that could lead to the technical and economic success of the
Project.
In the
August 2010 review, four potential flow sheets were identified for the Project,
and the Company announced that a decision regarding the most efficient and
productive path to pursue in order to complete a bankable feasibility study
would be forthcoming as soon as possible. Today, the Company
disclosed its decision to focus its efforts on autoclaving, as it appears to the
Board that autoclaving has the most promise for liberating and extracting the
gold and silver contained in the Clarkdale Slag Pile (the “Slag
Pile”)..
The
Company also announced today that (1) actions have been taken to reduce the
monthly cash “burn rate” in order to conserve capital resources, (2) the Board
of Directors has been reconstituted, and (3) an Interim Chief Executive Officer
has been appointed by the Board of Directors.
Technical
Update
Testing
involving each of the four potential flow sheets designed by the Company’s
research and development team has continued since the August 16, 2010 corporate
update. While data, to date, on the first three options remains
inconclusive, the fourth (autoclave) appears to have the most commercially
viable potential for the reasons summarized below:
Original Halide Leach – As
the least costly method, this leach process is still being
evaluated. To date, laboratory bench-scale ambient leach tests
conducted on slag processed through high pressure grinding rolls (HGPR), a very
robust and efficient grinding system that is commonly used on hard and abrasive
material, have not been shown to be promising. This testing was
carried forward in hopes that the method could replicate early pilot plant
results by using a rather benign and cost-effective leach on HGPR-ground slag
material. The halide leach could potentially be more effective if
introduced after the autoclaving of slag material.
Modified Halide Leach – This
leach process involves using concentrated acid and halide compounds to develop a
more severe chemistry to compensate for the inability to achieve proper
liberation of gold in the crushing and grinding process. While this
method was successful in liberating some gold, it also dissolved large amounts
of iron and silica. The excessive amounts of iron and silica resulted
in poor recovery of gold from solution using either solvent extraction or direct
precipitation, and as a result, this leach process has been put on
hold.
Three-Stage Acidic Leach –
This process involves a three-stage sequential leach to first remove the iron
and silica, then remove the copper, and finally dissolve the gold into a ‘clean’
solution (free of iron and silica) for direct recovery using ion exchange
resins. While this leach process was successful in removing iron, silica and
copper, it also took the gold into solution in a mode that was inconsistent with
commercial viability. As a result, this leach process has also been
put on hold.
Autoclave Process – This
leach process utilizes elevated temperature and pressure in an autoclave system
to dissolve and remove impurities (iron and silica) from the ore. In
small-scale bench testing this process has allowed an ambient leach to dissolve
the gold in a ‘clean solution,’ making it available for recovery by a number of
commercially proven process techniques. This system is also known as POX, or
Pressure Oxidation.
To date,
over 50 separate bench-scale autoclave tests have been conducted in a six-liter
single batch autoclave under a variety of operating conditions relating to
pressure, temperature and chemistry. The most recent of these tests
have been conducted on HGPR-ground slag material. The tests thus far indicate
the following:
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Pressure
Oxidation, followed by ambient leach (either halide or cyanide), has
resulted in commercial-grade gold recovery into solution. The ability to
leach gold in cyanide demonstrates that the gold has been totally
liberated and is in a ‘free’ state. The use of cyanide at a
batch test level also provides a cross-check on analytical results using a
halide leach.
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The
HGPR-ground slag at a minus-20 mesh size seems to be able to provide
liberation of gold comparable to the results that were achieved in
pilot-level halide leach formulation tests at a much finer minus-200 mesh
size. This appears to be due to the micro-fractures imparted to
the slag during the HGPR grinding process. The technical team believes
that the high pressures that exist in the autoclave environment are able
to drive the leach solution into the micro-fracture cracks created in the
slag by the HGPR grinder, thereby dissolving the gold without having to
employ a more expensive process to grind the material to a much finer
particle size. The courser grind also has positive implications for
crushing/grinding operating costs and more efficient and effective
filtration.
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The
temperatures and pressures required within the autoclave are relatively
moderate when compared with many commercial autoclave
systems. Similarly, the required retention times for the
material in the autoclave are relatively short. This may allow
the Company to utilize a smaller, more cost-efficient autoclave for its
planned 2,000 ton-per-day (tpd) commercial production facility, when
compared with larger autoclaves installed at other mining facilities
around the world.
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Based on
all tests of various leach processes that have been completed to date, autoclave
POX appears to provide the most consistent and cost-effective method for
extracting gold from the slag material. It is anticipated that the capital and
operating costs of an autoclave system are significantly higher than the costs
for the other ambient leach techniques tested thus far. However,
bench testing results from the Company’s consultants indicate that autoclaving
can consistently provide gold recoveries of 0.5 ounces per ton (opt) or
better. Autoclaving is also a proven technology that is widely used
within the mining industry, and the effectiveness of the downstream ambient
leach system will benefit from results gleaned from earlier and extensive leach
processing conducted at the Project.
Future
Work Plan
To test
the commercial viability of the autoclave approach, the Company has outlined a
technical program with clearly defined milestones. The Company
intends to systematically advance the project to complete pre-feasibility and
feasibility studies and finally a “bankable” feasibility document.
Currently,
additional process optimization batch tests are being conducted as part of the
pre-feasibility study, and a matrix has been designed to isolate and determine
all variables involved. The primary variables being tested include
feed type (different grinds), retention time, chemistry, heat and
pressure. These tests continue to be conducted using a six-liter
autoclave, processing approximately 0.5 pounds of HPGR-ground material per
test. The testing is designed to isolate relevant parameters by
changing only one variable at a time, in order to obtain optimum results and
provide real-time input into the proposed continuous pilot test.
Once the
batch test results have been reduced and analyzed into a pre-feasibility
document, a continuous pilot bulk test will be scheduled in a larger
multi-compartment autoclave (30-50 liters) as part of the feasibility
study. It is anticipated that this bulk test will be conducted in the
fourth quarter of 2010, subject to completion of the pre-feasibility study and
availability of the testing facility. This type of scale-up is
common in the mining industry, and the majority of recent major autoclave
installations have proven their feasibility utilizing bulk tests conducted with
30-50 liter autoclaves.
The net
result of the batch autoclave testing, followed by continuous bulk autoclave
testing, will be the assembly of a feasibility study to identify engineering
parameters and recoverable gold grade. This information will then be
used to identify capital requirements and operating costs to form the basis of a
“bankable” study to support the financing of the commercial system.
The
Company’s autoclave technical team is currently led by Richard Kunter, an
independent engineer and registered Qualified Person (QP) with extensive
experience in autoclave development. In anticipation of the upcoming
continuous bulk tests, the Company has recently engaged another autoclave
specialist with significant experience in the design, start-up and commercial
operation of autoclave systems. As the Company transitions between
technical milestones and approaches the preparation of a bankable feasibility
study, plans call for further bolstering of its technical capabilities with the
services of one of the few autoclave EPCM
(Engineering/Procurement/Construction/Management) firms that specializes in
commercial autoclave design and construction. The Company should
benefit by involving all these parties throughout the final continuous pilot
testing stage and during the preparation of the bankable feasibility
study.
Expense
Control Initiatives
The
Company is committed to the most efficient utilization of its cash and other
corporate assets. In this regard, the Board of Directors and
management team have analyzed the liquidity, personnel, equipment and other
assets required to effectively accomplish the Company’s strategic
objectives. In support of these initiatives, all of the Company’s
directors, executives and key consultants have agreed to reduce their cash
compensation levels by 25% to 50%. While the plant site in Clarkdale
remains a valuable resource for the technical team, it will no longer require
previous levels of staffing during the period when autoclave testing activities
are underway. Thus, as of early September 2010, the number of
employees working at the Clarkdale facility was reduced by approximately 50% to
levels appropriate only for essential and necessary tasks, while assuring that
important permits remain in good standing.
Board
and Management Reorganization
In
accordance with the evolving character and needs of the Company as it enters its
next stage of development, the Company’s Board of Directors has been
reconstituted and a reorganization of its executive management team has been
implemented. Effective October 1, 2010, Ian McNeil resigned his
directorship position, and another vacancy on the Board was created by the
recent death of director Harry Crockett.
The
executive team has also been reorganized and certain responsibilities reassigned
in light of the Board’s primary emphasis upon the achievement of specific
technical objectives at the Project. Effective October 1, 2010, Ian
McNeil stepped down as Chief Executive Officer, and Martin Oring, the Company’s
former lead independent director, was designated Interim CEO while the Board
completes its search for a permanent CEO with extensive mining industry
experience. With Mr. Oring’s designation as Interim CEO, he has
ceased to be an independent director and is considered an inside
director.
Conclusion
“On
behalf of the Board of Directors, I wish to express the Company’s sincere
appreciation for the extensive contributions of our previous CEO, Ian McNeil,
who has worked tirelessly on behalf of Searchlight and its shareholders during
the past five years,” stated Martin Oring, the Company’s Interim Chief Executive
Officer. “We look forward to Ian’s counsel as a significant
shareholder and dynamic supporter of our strategic initiatives in coming
years. Likewise, while the Company’s evolution now requires a Board
membership with greater independence, the contributions of past directors will
prove invaluable to the ultimate success of the Company.”
“With the
internal and external technical capabilities of our organization having been
greatly strengthened in the past year, our corporate direction and focus now
sharply honed in accordance with key strategic objectives, and our capital and
assets allocated efficiently, we believe the Company is well-positioned to
realize the intrinsic value of its unique and potentially world-class minerals
project at Clarkdale, Arizona,” concluded Oring.
About
Searchlight Minerals Corp.
Searchlight
Minerals Corp. is an exploration stage company engaged in the acquisition and
exploration of mineral properties and slag reprocessing projects. The Company
holds interests in two mineral projects: (i) the Clarkdale Slag
Project, located in Clarkdale, Arizona, which is a reclamation project to
recover precious and base metals from the reprocessing of slag produced from the
smelting of copper ore mined at the United Verde Copper Mine in Jerome, Arizona;
and (ii) the Searchlight Gold Project, which involves exploration for precious
metals on mining claims near Searchlight, Nevada. The Clarkdale Slag
Project is the more advanced of two ongoing projects that the Company is
pursuing. The Searchlight Gold Project is an early-stage gold
exploration endeavor on 3,200 acres located approximately 50 miles south of Las
Vegas, Nevada.
Searchlight
Minerals Corp. is headquartered in Henderson, Nevada, and its common stock is
listed on the OTC Bulletin Board under the symbol “SRCH.” Additional
information is available on the Company's website at www.searchlightminerals.com
and in the Company’s filings with the U.S. Securities and Exchange
Commission.
Forward-Looking
Statements
This
Press Release may contain, in addition to historical information,
forward-looking statements. Statements in this Press Release that are
forward-looking statements are subject to various risks and uncertainties
concerning the specific factors disclosed under the heading “Risk Factors” in
the Company’s periodic filings with the Commission. When used in this
Press Release in discussing the recent developments on the Project, including,
without limitation, the resolution of certain issues relating to the operation
of the production module, the words such as “believe,” “could,” “may,” “expect”
and similar expressions are forward-looking statements. The risk factors that
could cause actual results to differ from these forward-looking statements
include, but are not restricted to technical issues on the Project that may
affect the production module and its primary process components, challenges in
moving from pilot plant scale to production scale, the risk that actual
recoveries of base and precious metals or other minerals re-processed from the
slag material at the Clarkdale site will not be economically
feasible, uncertainty of estimates of mineralized material,
operational risk, the Company’s limited operating history, uncertainties about
the availability of additional financing, geological or mechanical difficulties
affecting the Company’s planned mineral recovery programs, the risk that actual
capital costs, operating costs and economic returns may differ significantly
from the Company’s estimates, uncertainty whether the results from the Company’s
feasibility studies and the results from the operation of the production module
are not sufficiently positive for the Company to proceed with the construction
of its processing facility, operational risk, the impact of governmental and
environmental regulation, financial risk, currency risk volatility in the prices
of precious metals and other statements that are not historical facts as
disclosed under the heading “Risk Factors” in the Company’s periodic filings
with securities regulators in the United States. Consequently, risk
factors including, but not limited to the aforementioned, may result in
significant delays to the projected or anticipated production target
dates.
Contact
Information:
RJ
Falkner & Company, Inc., Investor Relations Counsel at (800) 377-9893 or via
email at info@rjfalkner.com