Edgewater Receives Positive (PEA) for Corcoesto Gold Project

George Salamis, President and CEO of Edgewater Exploration Ltd. is pleased to announce results of a Preliminary Economic Assessment (“PEA”) on its 100%-owned Corcoesto gold project in Galicia, Spain.

The NI 43-101 compliant PEA study was overseen by Mr. Alan Noble, P.E Ore Reserves Engineering Inc. of Denver, Colorado as part of the on-going development plan on the Corcoesto Gold Project, Northwest, Spain.

Base Case Highlights

Average Annual Gold Production 102,000 /oz
Average Annual Net Revenue (US$) 60.0 Million
Life of mine Net Present Value (NPV)(US$)(5%) 206 Million
Pre-Tax Internal Rate of Return (IRR) 24%
Pre-Tax Payback (years) 3.4
Initial Open pit and underground Capital Cost (US$) 135 Million
Average Annual Cost (US$/oz) 713
Combined open pit and underground operation 9.9 year mine life

Pre-Tax Financial Models

Pre-tax financial model was completed using a base case gold price of $1300 per ounce and an exchange rate of 1.38 Euro/$US. The Base Case economic evaluation has an IRR of 24%, payback of capital in 3.4 years and a NPV of $206 million at a discount rate of 5%.

The following table details Project sensitivity for two additional metal prices;

Pre-Tax Financial Model



Metal Price Scenarios


(Base Case)























Initial Capital Costs for the mine and plant are estimated at $135 million, with an additional $9 million for resource drilling, $1.5 million to purchase part of the Lundin royalty, and $25 million (17.5%) for contingency. Working capital in the amount of $12.5 million, sustaining capital $33 million and reclamation and closure costs of $10.5 million are also included in the above economic evaluation.

George Salamis stated: “Our efforts over the past 16 months have been focused on growing the Corcoesto resource and optimizing value for our shareholders while ensuring we follow the highest standards of environmental stewardship at Corcoesto. We are very excited with the outcome of the PEA and believe we will continue to add more value as we move into the next phase of the project. The permitting process is now well underway and will be based on the design in this PEA. We currently have 4 diamond drills active on the project in an effort to convert inferred resources to measured and indicated. I am confident we will execute and exceed our expectations. We plan to complete an additional 20,000 metres of drilling and begin a definitive feasibility study based on the updated resource anticipated for 2012. I am also very confident we will be able to secure an exploitation permit on the project during 2012.

Life-of-Mine Parametres

Mill Feed Grade 1.70 g/t gold
Stripping Ratio 8.0/1
Annual Throughput 2.1 million tonnes
Milling Rate 6,000 tonnes/day
Gold Recovery 89.1%
Mine Life 9.9 Years

NI 43-101 Mineral Resources

The PEA was based on the May 27, 2011 NI 43-101 Mineral Resource estimate. (See following table for details).

Corcoesto Gold Deposit

Resource Class Cutoff
(g/t Au)
g/t Au Contained Gold
(x1000 oz)
Measured 0.65 3,899 1.77 222
Indicated 0.65 1,823 1.69 103
Measured + Indicated 0.65 5,783 1.74 325
Inferred 0.65/2.0 20,265 1.76 1,149
  1. CIM definition standards were followed for the resource estimate
  2. The 2010 and 2011 resource models used an inverse-distance-power (IDP) grade estimation within a three-dimensional block model with mineralized zones defined by wireframed solids.
  3. A total of 19,075.7 m of surface trenching in 225 trenches, 443.1 m of adit sampling in 4 adits and 42,111.18 metres of diamond and RC drilling in 342 drill holes were used in the resource with sample spacing’s that were less than 30 m for Measured resources, less than 40 metres for Indicated resources and less than 195 m for Inferred resources except for Inferred resources below 200 m from surface and for the northern two vein systems that used drill spacing’s of 196 m
  4. A base cutoff grade of 0.65 g/t Au was used for reporting resources above a depth of 200 m from surface and a cutoff grade of 2.0 g/t Au was used for reporting resources below 200 m from surface
  5. Dilution is included for a minimum mining width of 2.0 m on a 4.0 m high mining bench
  6. Mineral Resources that are not mineral reserves do not have economic viability

Initial Capital Cost using Contract Mining

An initial capital expenditure of $135 million is required to construct the project and is detailed in the following table.

Initial Capital Cost


$ Million

Engineering and Preproduction Development




Process Plant


Tailings & Reclamation


Total Initial Cost


Resource Drilling


Royalty Purchase


Contingency — 17.5%


This capital estimate utilized an exchange rate of 1.38 Euro/$US and is based on industry standard estimates and 2011 pricing supplied by vendors where applicable.

Site Operation Cost

The Corcoesto Project is modelled as a combined open pit and underground mining operation. Life-of-mine operating costs are $32.52/tonne ore milled for open pit and $56.78/tonne ore milled for underground, as detailed in the following table.

Site Operating Cost

Description Open Pit ($/tonne milled) Underground ($/tonne milled)
Mining (including waste and staff)









G & A







The Corcoesto gold project is located in northwest Spain approximately 35 km west-southwest of the port city of La Coruna in the Autonomous Community of Galicia. The project has excellent infrastructure, which is connected to existing roads at the nearby community of Corcoesto. Delivery of electrical power will be completed connecting a new substation to the existing 22kV power line which currently bisects the project. Mine employees will commute daily from local communities.

Metallurgy and Processing

Metallurgical recovery is estimated at 89.1% based on a series of test completed at McClelland Laboratories in Sparks Nevada during 2011. Work included diagnostic tests completed on a series of composite samples from drill holes across the three main gold mineralized zones at Corcoesto. The 6,000 tpd process facility will utilize conventional crushing, grinding, gravity, flotation and cyanidation to produce gold dore.

Major equipment for the processing facility includes a primary crusher sized for 6,000 tpd (34″ x 44″), a semi-autogenous (SAG) mill, two ball mills (14′ x 18′) and a vertical regrind mill for the flotation concentrate. The average ball mill work index is 14.3 kW/t and the mill feed will be ground to 53 microns.

The processing facility includes: centrifugal gravity units, leach and carbon adsorption tanks (13.8m x 13.8m), rougher, scavenger, and cleaner flotation cells (100 m3), concentrate thickener, elution circuit, electrowinning and smelting. Additionally the facility will include a reagent handling system which includes a cyanide detoxification unit.

Recommendations and Development Plan

The PEA demonstrates that the Corcoesto Gold Project has a NI 43-101 compliant mineral resource estimate that has the potential to be economically viable under a Base Case development scenario. As a result, Ore Reserves Engineering Inc. has recommended that the Company upgrade the PEA to feasibility-level status. Additional recommended work includes resource conversion utilizing surface drilling for in-pit resources as well as underground access and drilling targeted at the deeper resource areas.

Conference Call Details

Edgewater will hold a conference call on Friday November 18, 2011 at 11 am Eastern Standard Time, 8 am Pacific Time. During the call, senior management will be available to discuss the study and respond to questions from analysts and investors. To join the call, please dial:

Canada & USA Toll Free: 1 888 754 4430
International Toll Dial In: 1 212 231 2927

Qualified Persons

The Corcoesto Gold Project PEA Technical Report data in this news release was read and approved by Alan Noble, P.E., of Ore Reserves Engineering Inc., a professional mining engineer registered in the State of Colorado, USA and a Qualified Person (“QP”) as defined by National Instrument 43-101. A technical report is being prepared and will be filed in the next 45 days.

Mr. Gregory Smith, P.Geo., Vice-President of Exploration of the Company, is the Qualified Person as defined by NI 43-101, and is responsible for the accuracy of the technical data and information contained in this news release.

The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

About Edgewater Exploration Ltd.

Edgewater is a mineral exploration company focused principally on acquisitions, advancement and development of precious metal properties. Edgewater is currently developing the Enchi Gold Project in Ghana, West Africa and the Corcoesto Gold Project in Northwest Spain.

On behalf of the board of EDGEWATER EXPLORATION LTD.

“George Salamis”

George Salamis,
President and CEO

For further information, please contact:
Ryan King, Vice President
Telephone: (604) 628-1012

“Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.