Infinite possibilities in Costa Rica

A small river called the Infinito runs through North Central Costa Rica and has become the namesake of a gold exploration & development company based in Calgary, Canada, formerly known as Vannessa Ventures. According to CEO John Morgan, the decision was made to change the name from Vannessa Ventures to Infinito Gold, Ltd. (TSX-V: IG), this spring, after the Company made significant strides in completing the major permitting for its flagship Crucitas gold project in Costa Rica.

Explained Morgan, “The holding company we have in Costa Rica is called Industrias Infinito, but nobody’s quite sure where the term Vannessa came from. So, as we moved from a gold exploration company to a company in a pre development, moving into the development stage; and the idea was to recognize that fact by moving on to a name that really meant something. Infinito means the same in Spanish: infinite, and it has a nice ring to it as well.”

From junior explorer to gold producer

Infinito Gold recently announced revised economic numbers that show a sharp increase in total gold to be produced (from 637,000 to 940,000 oz.) and NPV (more than triples to $127,613,000). Said Morgan, “building on that [success], we contracted Micon International to work on the feasibility study; to look at the economics of putting those resources into a mine plan, looking at them as reserves and seeing what the economics would be like to extract those resources.”

Infinito published a news release on July 17, broadcasting exciting results. “We used a gold price of $750.00 an ounce,” explained Morgan, “Micon estimates that our mining costs net of silver credits will be $342.50 an ounce, which is very competitive today.”

He attributed low mining costs to the fact that the strip ratio at Crucitas is extremely low. “Micon estimates that we will have .6 of a ton of waste to move for every ton of ore that goes to the mill. So our ratio is .6 to 1; less than 1 to 1. In addition, the gold recovery will be very high.”

Micon estimates that the Company’s pre tax and pre CAPEX cash flow from the project will be over $356 million USD, and cash flow after tax and CAPEX will be approaching $200 million. “So the project is very exciting, and it looks like it’s going to be economically viable,” said Morgan, noting that new capital costs and operating costs are being used, and they’ve reflected the increased cost of all commodities, including steel. “We believe in these costs and, in fact, we built in an over $6 million contingency in our CAPEX.”

Since June, the Crucitas mine and related infrastructure have been under construction. Morgan predicted that the mill will be operational by the end of 2009; and in the first full year of production, the mine may be producing over 100,000 ounces.

“It’s the function of the relatively low capital costs, and you have your slightly higher grades and slightly higher throughput in the early years of the project, which helps with your rates of return,” Morgan explained.

Morgan pointed out that in Infinito’s resource report, it had been estimated that the Company had 1.21 million ounces of inferred resources in addition to the 1.24 million ounces of indicated. “We are going to be doing a drilling program to try to transfer that resource – from inferred to indicated, and then into a mining reserve. And we are hopeful and expectant that the total resource base that will be available for mining will expand. Obviously, the feasibility study was just done using the indicated resources as a base, and that transfers into just about 1 million ounces of mineable reserves. But we are hopeful that definition and infill drilling will actually increase that substantially.”

Crucitas: The lay of the land

Located in an underdeveloped part of Costa Rica, close to the Nicaraguan border, local communities are supporting the project with the hopes that it will bring economic development. “We're improving the road, which has been a serious issue, especially during the wet season there,” said Morgan, noting that the mine will also provide power, internet and cable service, and, most importantly, over 200 jobs. “We have a commitment to hire locally to the extent that we can, and the people are very excited about this because the industries there are agriculture and the plantation forestry. So this is an area that needs economic development.”

Morgan noted, however, that Costa Rica itself is a stable, business-friendly country. “They have very strict and well-enforced environmental laws, with which we're totally compliant, and we think it’s a good place to do business,” said Morgan. “We have good relations with the relevant departments in mining and the environment and the local political infrastructure.”

The Republic of Costa Rica’s current president is Mr. Oscar Arias, who was president of the country back in the 1980s. “He was partially responsible for brokering the peace between the Sandinistas and the Contras in Nicaragua. And for that, he received a Nobel Peace Prize,” noted Morgan, adding that Costa Rica is part of the Central American Free Trade Agreement. “It’s a very progressive and competent government.”

The mine may be many months away from completion, but some on-site drilling has already begun. “We are using a small portable drill,” said Morgan, “but the full infill drilling will commence once we have the local permit that is required to remove the tree cover that covers the two ore bodies: Botija and Fortuna, because this is not virgin tropical rain forest. It has been partially harvested, but it has re grown somewhat, so we have to cut trees to get in there to get the drill rigs into position, and that requires a local permit which we are currently working on.”

In good company

Infinito Gold has two dominant shareholders: Exploram Enterprises Ltd. and Auro Investments Ltd. “Exploram controls just over 50 percent of our common stock, “explained Morgan, adding, “Through a series of demand loans, they funded us through the pre development period of the mine, which has enabled us to build roads and make commitments to the construction of local buildings around the deposit.”

Infinito is currently negotiating with prospective financiers to secure capital to ensure completion of the $66 million mine. The Company will make announcements in the near future regarding finances.

A geologist trained at the University of British Columbia, Morgan joined Vannessa Ventures as its president in 2004. He spent the bulk of his 30-plus year career in mining with Manalta Coal Ltd., which was the largest coal mining company in Canada until it was taken over in the mid-‘90s. More recently, Morgan served for four years as Vice President Operations in charge of a large tonnage coal operation in Venezuela, known as the Paso Diablo mine.

Chairman and Director Steven Dean recently joined Infinito’s board of directors and is also associated with a company that is a significant shareholder as well, said Morgan. Dean formerly served as President of Teck Cominco Ltd., was the Executive Director and Chief Financial Officer of the Australian gold group Normandy Mining Ltd. and is a director and Chairman of a number of public companies.

John Thomas, VP of Operations is based in Costa Rica. “He’s fluent in Spanish, having worked in Venezuela for many years, and he’s been on site for several months now,” said Morgan. “We have a good management team, well connected and well versed in how to operate and do business in Costa Rica. “

Costa Rica recently lifted the moratorium on open mining, which had no effect on Crucitas, but Morgan acknowledged that this will add value and interest to future projects in the area. “We're excited not only in the Crucitas project, but it’s a potential we have in the land surrounding it for incremental discovery.”

Email:		info@infinitogold.com
Address:	Suite 220, 1010 - 1st Street S.W.
		Calgary, Alberta
		Canada T2R 1K4
Telephone:	(403) 444-5191
Fax:		(403) 444-5190
	

Investor Relations, Coal Harbor Communications, toll-free 1-877-642-6200