Pershimco Reports on the Progress of the 2011 Exploration Campaign in Panama, and Receives Updated National Instrument (NI) 43-101 Technical Report on the Cerro Quema Project

Pershimco Reports on the Progress of the 2011 Exploration Campaign in Panama, and Receives Updated National Instrument (NI) 43-101 Technical Report on the Cerro Quema Project

PERSHIMCO RESOURCES INC. is pleased to announce the release of the Updated National Instrument (“NI”) 43-101 compliant Technical Report on the Company’s Cerro Quema Project, Panama. The Updated Technical Report dated January 14, 2011 (the “Updated Technical Report”) was prepared by Scott Wilson Roscoe Postle Associates, Inc. (“Scott Wilson RPA”), a globally recognized leader in the exploration and mining industry, having worked on a large repertoire of projects for major and junior mining companies in a variety of base and precious metals (

The Updated Technical Report contains an Economic Analysis (“EA”) on the LaPava Target completed by Wayne W. Valliant, P. Geo., Stuart E. Collins, P.E., and Holger Krutzelmann, P. Eng. and resource estimation on the historical target which were not included in the previously released NI 43-101 Technical Report dated August 10, 2010. The current report will be made available on SEDAR (

The PEA study using Indicated Mineral Resources of 7,231,000 tonnes grading 1.10 g/t gold at a 0.35 g/t gold cut-off grade shows on LaPava stand-alone basis an undiscounted pre-tax cash flow totals $139.5 million over the mine based on a production rate of 1.8 million tonnes per year. The internal rate of return (“IRR”) for the project is 69%. The LaPava Target gold mineralization is a viable project with the current Mineral Resource estimates. The ongoing 6,000 m drilling campaign has the potential to enhance the project’s economics if it increases the compliant Mineral Resources and production profile that could result in higher Net Present Value and extend the mine life. This PEA has an accuracy of +/- 30%, which is considered industry standard for preliminary capital and operating cost estimates.

Pre-tax cash flow projections were generated from the Life of Mine production schedule and capital and operating cost estimates for the 5,000 tonnes per day case. A summary of the key criteria is provided below:

– Mill recovery by zone, as indicated by test work, averaging 90%. Silver
was not evaluated

– Reduction in ounces for gold entrained in mill circuit

– All currency is expressed in dollars. Panama uses the United States
Dollar as their major form of currency exchange

– Mineable resources are based on Whittle® floating cones that used a
gold metal price of $1,125 per ounce

– Net Smelter Return (“NSR”) includes dore refining, transport, and
insurance costs

– Pre-production period 2011 to 2013 inclusive

– Capital cost is US$ 33.0 million, excluding reclamation; and total operating cost is $10.47 per tonne processed or US$ 328 per gold ounce


– Simple payback occurs before the mid-point of 2014 (less than 12 months
from the start of production)

– The mine life capital unit cost is US$ 158 per ounce, for a Total
Production Cost of $486 per ounce of gold

– The average annual gold production during operation is 57,000 ounces per

– Due to the grade of the mineral resources, the Project is most sensitive
to the gold price.

Scott Wilson RPA offered a number of recommendations:

– Evaluate the possible economic significance of silver

– Develop further design and costing of the waste/tailings dump, earthworks structures, mine contracting, processing, infrastructure, and


– Conduct data verification drilling and mineral resource update on the
Quema mineralization

– Evaluate economic viability of mining the Quema mineralization

– Evaluate potential copper mineralization below oxidized horizon

– Conduct confirmatory pilot plant test work on representative ore and
conduct additional bulk density test work

– Centralize and catalogue the various reports and databases

– Update mine design and update capital and operating cost estimates, and

– Conduct additional exploration on satellite zones and possible
extensions of the known mineralization.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

2011 Exploration Campaign

To date, Pershimco has completed 1400 m of a 6,000 m drilling program within the western segment of the 17 km Cerro Quema gold-copper mineralized trend (the “Trend”) (refer to the appended location map). In 2010, Pershimco completed a confirmation drilling campaign of 1,280 m as part of their due diligence efforts and to confirm the LaPava historical mineral resources of 240,000 ounces of gold. Results of this verification program showed a NI 43-101 compliant resource of 269,000 ounces of gold. During the due diligence period, five other similar targets were identified and slated for further exploration work in 2011. These include LaPava Norte, LaPava #2, Chontal, Quemita and, Mesita Targets.

Pershimco’s drilling is oriented towards significantly increasing the mineral resources in the oxides and also the gold and copper contained in the supergene and primary sulphide zones below the oxides.

The information contained in this news release has been reviewed and approved by Mr. Jean Lafleur, M.Sc., P. Geo., Director and Technical Advisor at Pershimco, the Company’s Qualified Person under NI 43-101 regulations.

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