January 29, 2010 Genco Increases Mining Reserves 415% To 47 Million Silver Equivalent Ounces
January 29, 2010 - Vancouver, BC - Genco Resources Ltd. (TSX: GGC) is pleased to announce the results of an updated Resource and Reserve audit for its La Guitarra silver/gold mine and Temascaltepec Mining District. Reserves and Resources are reported as of December 16, 2009 in accordance with the National Instrument 43-101 Standards of Disclosure for Mineral Projects.
The Qualified Persons under NI 43-101 for this Reserve and Resource estimate are Glenn R. Clark, P.Eng, of Glenn R. Clark and Associates Ltd., and John Thornton of Thor Resources LLC. They are both arms' length to Genco and have prepared, or supervised the preparation, of the information that forms the basis for this news release and verified the data disclosed.
The following tabulates the reserve and resources by area and category:
La Guitarra and Temascaltepec Silver-Gold Mining District Reserves & Resources
Category
tonnes
('000)
Ag g/t
Au g/t
eAg g/t
Oz Ag
Oz Au
Oz eAg
Underground Reserves
Proven
577
208
1.50
292
3,858,000
27,800
5,417,000
Probable
1,608
209
1.45
290
10,804,000
74,900
14,992,000
Total Underground Reserves
2,185
209
1.46
291
14,662,000
102,700
20,409,000
La Guitarra Open Pit Reserves
Proven
2,615
87
0.80
132
7,314,000
67,200
11,097,000
Probable
4,209
77
0.72
117
10,419,000
97,300
15,833,000
Total Surface Reserves
6,824
81
0.75
123
17,733,000
164,500
26,930,000
Total Reserves
9,009
113
0.93
165
32,395,000
267,200
47,339,000
La Guitarra Open Pit Resources - 45 g/t eAg Cut-off
Underground Reserves were calculated using a 135 equivalent silver ("eAg") grams per tonne ("g/t") cut-off, a 20% dilution factor at zero grades. The methodology used for the Underground Reserves was standard polygonal projections on longitudinal sections. Proven was projected 0-15 metres from data points and Probable were projected 15-40 metres for all areas, except Santa Ana. Proven at Santa Ana were projected 0-15 metres and Probable 15--50 metres. Silver assays were cut to 1,500 g/t, and gold assays to 15 g/t.
The following tabulates the parameters used to create the Creston block model grade interpolations:
Parameter
Value, Distance or Method
Grade Estimation Method
IDP3
Block Size (length x width x bench Height)
10x3x3 metres
Composite Length
3 metres
Gold Outlier Cap
10 g/t
Gold Outlier Capping Distance
15 metres
Silver Outlier Cap
700 g/t
Silver Outlier Capping Distance
15 metres
Measured Distance
20 metres
Minimum Number of Composites for Measured
2
Indicated Projection Distance
20-50 metres
Minimum Number of Composites for Indicated
2
Inferred Projection Distance
+ 50 metres
Model Constraint
3D Solid/Wire Framing Model
Silver to gold ratio of approximately 56 to 1 representing a gold price of US$780/oz gold and a silver price of US$13.80/oz was used in the eAg calculation. As the recently released La Guitarra Feasibility Study neared completion, the average gold and silver prices used in the Feasibility Study and the NI 43-101 Compliant Technical Report were sufficiently close to US$800/oz gold and US$14/oz silver that these metal prices were adopted for the financial valuations presented in both documents. The silver to gold ratio was left at 56 to 1. Silver and gold recoveries are 82%-89% using the existing flotation circuit averages and estimated at 92% for silver and 90% for gold using a proposed new cyanide mill. The total estimated operating costs for mining, milling and general & administrative costs is US$38.40 per tonne of ore processed.
The Reserve and Resource calculations are based on assay data obtained from diamond drilling and sampling on surface, and ore body modelling. A total of 85,645 metres of drilling in 452 drill holes consisting of 289 core drill holes, and 163 reverse circulation drill holes completed since August 2006, was the primary source of drill data.
The substantial increase in mining reserves and corresponding recoverable ounces are the result of very successful surface drill programs that nearly doubled the projects Underground Reserves from 11,516,000 eAg ounces to 20,411,704 eAg ounces. In addition, the mining reserves now include La Guitarra Open Pit Reserve of 26,933,051 ounces that were carried as Resources in the June 2008 Technical Report. This upgrade of the Open Pit deposit to Reserves is based on Kappes, Cassiday & Associates' ("KCA") projected processing costs of US$20.00 per tonne of ore to a proposed agitated leach, Merrill Crowe gold recovery plant at 3,000 TPD and Genco's mining costs for the open pit, developed in conjunction with a mining contractor with current operations ongoing in Mexico, and the metal recoveries summarized in the KCA Feasibility Study.
The Feasibility Study has dramatically increased the projects expected equivalent silver ounces to be produced from the proposed expanded operations. The results of the drilling programs have not only increased the Proven and Probable Reserves for all operations, but the expected grades have increased from the most recent drilling assay results.
 
The following table shows the growth of Resources and Reserves by area and category:
Resource and Reserve Growth from 2008
Category
tonnes ('000)
oz Ag
oz Au
oz eAg
Reserves
639%
361%
548%
415%
Measured and Indicated
-17%
65%
34%
60%
Project Inferred
26%
6%
13%
11%
La Guitarra Mine including the San Rafael zone account for a large portion of the Underground Reserves and Resources. Included in the summary are Underground Reserves and Resources from other zones known as Nazareno, Coloso and Mina de Agua (Santa Ana veins).
The following tabulates the Underground Reserve by area:
La Guitarra and Temascaltepec Silver Gold Mining District Underground Reserves by Area
Area
tonnes ('000)
Ag g/t
Au g/t
eAg g/t
Oz Ag
Oz Au
Oz eAg
Guitarra
1,063
188
1.80
289
6,415,000
61,300
9,855,000
Nazareno
240
146
0.79
190
1,122,000
6,100
1,462,000
Coloso
373
335
2.65
483
4,010,000
31,700
5,780,000
Mina de Agua
509
191
0.22
203
3,115,000
3,600
3,312,000
Total Reserves Underground
2,185
209
1.46
291
14,662,000
102,700
20,409,000
All surface Reserves and Resources are contained within La Guitarra open pit, which is situated above the existing La Guitarra Mine. A mine design has been developed for the surface deposit which would exploit the deposit through development of three separate open pits: La Cruz, Los Angeles and Creston.
The following tabulates the Open Pit Reserves by mining area:
La Guitarra and Temascaltepec Silver Gold Mining District Surface Reserves by Area
Area
tonnes ('000)
Ag g/t
Au g/t
eAg g/t
Oz Ag
Oz Au
Oz eAg
La Cruz
1,585
83
0.76
125
4,741,000
42,200
7,099,000
Los Angeles
3,073
72
0.64
108
8,087,000
70,300
12,019,000
Creston
2,166
61
0.67
99
4,905,000
52,000
7,812,000
Total Reserves Open Pit Cut
6,824
81
0.75
123
17,733,000
164,500
26,930,000
It is estimated that at the conclusion of mining the identified Reserve contained in the three open pits there will be 2,156,000 tonnes of Measured & Indicated Resources remaining above the 45 g/t operating cut-off, containing 8,656,000 eAg ounces. Depending on the silver and gold prices prevailing at the end of the current proposed mine plan, and the prevailing operating costs at the time, it would have to be determined if further open pit mining would be justified beyond what has been determined in the current mine plan and Feasibility Study.
 
The following is a breakdown of the Open Cut Measured and Indicated Resources at 10 g/t eAg intervals:
Creston Resource by Class and Cut-off
Cut-off eAg g/t
Class
tonnes ('000)
Ag g/t
Au g/t
eAg g/t
Oz Ag
Oz Au
Oz eAg
1
Measured
4,608,923
62
0.60
95
9,188,821
66,918
14,078,704
Indicated
8,609,933
58
0.58
90
16,067,110
160,571
24,916,205
M + I
13,218,856
59
0.59
92
25,255,931
249,489
38,994,909
Inferred
4,001,103
54
0.73
95
6,947,252
93,917
12,222,019
10
Measured
4,328,709
65
0.63
101
9,047,141
97,688
14,057,865
Indicated
8,238,985
60
0.60
94
15,981,965
159,820
25,038,411
M + I
12,612,694
62
0.61
96
25,029,106
257,508
39,096,276
Inferred
3,810,374
56
0.73
99
6,861,113
93,115
12,129,486
20
Measured
3,966,982
70
0.68
108
8,928,898
86,738
13,776,015
Indicated
7,725,407
64
0.64
99
15,895,886
158,979
24,592,132
M + I
11,692,389
66
0.66
103
24,813,343
245,717
38,368,147
Inferred
3,474,568
61
0.83
108
6,815,069
92,729
12,066,124
30
Measured
3,590,744
76
0.74
117
8,774,808
85,439
13,508,587
Indicated
7,125,531
68
0.68
106
15,579,939
155,799
24,286,376
M + I
10,719,275
70
0.70
110
24,354,747
241,238
37,794,963
Inferred
3,187,303
66
0.89
115
6,764,051
91,212
11,785,847
40
Measured
3,194,151
82
0.80
127
8,421,877
82,165
13,043,639
Indicated
6,381,900
73
0.74
114
14,980,023
151,852
23,393,460
M + I
9,371,302
76
0.76
119
23,401,900
234,017
36,437,099
Inferred
2,859,991
71
0.96
125
6,529,240
88,283
11,495,141
50
Measured
2,800,997
90
0.88
138
8,105,578
79,257
12,428,861
Indicated
5,550,536
79
0.81
124
14,099,432
144,564
22,130,754
M + I
8,351,534
83
0.83
129
22,205,101
223,821
34,559,615
Inferred
2,493,972
77
1.06
136
6,174,786
85,004
10,906,115
60
Measured
2,431,322
98
0.96
152
7,661,401
75,050
11,882,988
Indicated
4,784,115
86
0.89
135
13,229,586
136,909
20,767,059
M + I
7,215,437
90
0.91
141
20,890,987
211,959
32,650,047
Inferred
2,167,428
83
1.16
148
5,784,454
80,843
10,314,448
Genco's Acting CEO, Robert Gardner, stated, "We are extremely pleased with the growth in Reserves and Resources at La Guitarra. Genco will continue to work towards its goal of growing La Guitarra into one of the premier silver mines in the Americas."
For more information on Genco's Mineral Reserves and Resources, please refer to the full La Guitarra Mine Technical Report dated January 29, 2010, which can be found on SEDAR at www.sedar.com or on Genco's website at www.gencoresources.com.
At this time, Genco reports that Dr. Chris Wilson has informed the Company he will be resigning from Genco's Board of Directors, effective immediately. Genco wishes Dr. Wilson success in his future endeavours.
About Genco Resources Ltd.
Genco Resources Ltd. is a publicly traded mining company focused on developing its core asset, the producing La Guitarra silver-gold property located in the Temascaltepec Mining District of Mexico. La Guitarra Mine presently consists of two underground operation centres and a flotation mill with a proven capacity of 320 tonnes per day. Genco aims to create solid shareholder value through increased silver production and reserve & resource growth.
This news release may contain certain forward-looking statements that involve risks and uncertainties such as statements of the Company's plans, objectives, strategies, expectations, and intentions. The words "may", "would", "could", "will", "intend", "plan", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including those factors discussed below and in filings made with the Canadian securities regulatory authorities. Should one or more of these risk factors or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The Company does not intend, and does not assume any obligation to update these forward-looking statements.
The Toronto Stock Exchange has not reviewed the contents of this release and does not accept responsibility for the accuracy of the contents of this release.
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