October 30, 2008
Stingray Receives Acid Plant Cost Estimates for Feasibility Study at El Pilar Copper Project, Mexico
Peter Mordaunt, Chairman and CEO of Stingray Copper Inc. ("Stingray")(TSX: SRY)(TSX: SRY.WT) reports that the Corporation has received independent cost estimate proposals for the construction of a commercial acid plant capable of producing sulfuric acid, a necessary operating requirement at the El Pilar oxide copper project located in Sonora, Mexico. In the metallurgical process being studied for the El Pilar project, sulfuric acid is used to leach the copper from the mined copper bearing ores prior to passing the copper bearing pregnant leach solution (PLS) through a solvent extraction- electrowinning ("SX-EW") plant where the copper is removed from solution and the copper depleted (barren) solution is recycled. This SX-EW technology has been in commercial practice since the 1970's, having been pioneered in the southwest United States and widely used by copper producing companies. Germane to this SX-EW process, is the fact that copper cathode is produced that does not require smelting and refining plus, this is a closed cycle process that is environmentally more friendly than sulphide copper mining.
The price of sulfuric acid will be a major factor in the economics of the El Pilar project. Sulfuric acid has fluctuated from US$60 per tonne (at the time of the El Pilar acquisition in April '07) to a high of $650 tonne and is currently at US$250 tonne on the spot market with the price forecast to decline further, in line with other commodities. At the onset of the El Pilar study, Stingray identified the project's sensitivity to this input and also the potential for producing sulfuric acid for its own account via a "captive" sulfuric acid plant. Ample supplies of sulfur, the essential feedstock for an acid plant, are readily available as a steady byproduct from the numerous hydrocarbon plants located in the Gulf of Mexico. Significantly, one tonne of sulfur will convert to slightly more than three tonnes of sulfuric acid. With abundant sources of sulfur and a current spot price for sulfur of US$150 per tonne, it made sense for Stingray to obtain cost estimates for a plant designed to produce 600 tonnes of sulfuric acid per day. Importantly, the price of sulfur is forecast to revert to an historical norm in the $70 to $90 per tonne range within the next year. Modern acid plants represent a clean technology that has been recently permitted throughout the world, including southern California.
Stingray and M3 Engineering and Technology ("M3") will be reviewing the costs proposed for an acid plant and the potential operating cost benefits attributable to the El Pilar project. This review will be completed in the context of a trade-off study considering the anticipated cost of procuring the project's sulfuric acid requirements from traditional sources in the region. Costs for sulfuric acid have risen dramatically in the region over the last year due to the principal local supplier having its production severely reduced at its smelter due to a continuing miners' strike.
A "captive" acid plant may offer another cost benefit to the El Pilar project by the addition of a cogenerating power plant utilizing "free" steam produced by the acid making process. As the power produced is very low cost, essentially free after the amortization of the cogenerating plant cost, the operating savings compared to purchasing the power from the Mexican power utility could be of great significance in the economic analysis of the project. It is important to note that the power produced from the acid plant contemplated will represent only a portion of the power required for the El Pilar project.
In light of these operating cost benefits the proposals to build an acid plant will be duly considered. The timeliness and capital cost associated with the construction of such a facility will have its own net benefit/cost and payback to the project. The Feasibility Study will present the optimum operating base case with sensitivity analysis and comparisons for the introduction of operating alternatives.
Other progress related to the Feasibility Study includes the Mexican power authority, CFE who have confirmed that power is available for the project from a take off point in Nogales. Dialogue with CFE will establish the final power line route to the project and this will be followed shortly by the engineering, cost quotations and the environmental impact application (MIA).
Stingray is well financed, with approximately $17M in the treasury, to carry out the current work on the technical/feasibility study of El Pilar scheduled for completion in Q1 of 2009. M3 and Stingray's experienced engineering team are working along with several third party consultants to complete the necessary work for the study.
Peter Mordaunt, P.Geo is the Qualified Person responsible for the technical content of this release.
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Certain Statements presented herein may constitute "forward-looking statements". Such forward-looking statements may include potential mineralization, resources and reserves, conclusions of prefeasibility and feasibility studies, estimates of future production, capital and operating costs, prices of metals and other known and unknown risks. These and other factors and uncertainties may cause material differences from future results as expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include but are not limited to the risks involved in the exploration, development and mining business.
Contacts: Stingray Copper Inc. Steve Brunelle Vice President (416) 368-6240 Stingray Copper Inc. Peter Mordaunt CEO & Chairman (416) 368-6240
SOURCE: Stingray Copper Inc.