July 27, 2010 08:08 ET
MDN Inc.: Exploration Drilling Results at Tulawaka Mine and Nearby Prospects Indicate Potential for Extended Mine Life
MONTREAL, QUEBEC–(Marketwire – July 27, 2010) – MDN Inc. (“MDN”)(TSX:MDN) is pleased to report to its shareholders that African Barrick Gold plc (ABG), the project operator at the Tulawaka gold mine in Tanzania in which MDN has a 30% participating interest, announced second quarter and six months operational results and positive exploration drilling results in the underground mine and at nearby West Zone and Mojamoja prospects.
Tulawaka Operational results
African Barrick Gold reported that Tulawaka has successfully transitioned to an underground operation while also focussing on expanding the resource base and extending its life of mine. The equipment shortages experienced in the first half of the year have now been addressed and production levels should show a corresponding increase.
At Tulawaka, the focus has been on both the underground drill programme at Tulawaka East, with the aim of identifying sufficient resources to extend the life of the mine, as well as identifying additional open pit resources in order to maximise throughput at the processing facilities. Good progress has been made in both areas as described in more detail in the “Exploration” section below.
Marc Boisvert, Vice-President of Exploration for MDN was at the mine to review the operational and exploration results and commented: “We are confident that the slowdown in gold production at Tulawaka will revert in the second half of 2010 and we are extremely pleased with exciting exploration results underground and encouraged by the West Zone and Mojamoja prospects”.
Total gold production at Tulawaka for the six months ended 30 June 2010 was 27,513 ounces compared with 45,054 ounces in the same period last year. The decrease in production was due to equipment shortages which in turn resulted in lower underground tonnes hoisted. Lower grade stockpiles were also processed, so that total processed grade was less than planned. This was partially offset by increased throughput. Underground grades remained high at 9.15 g/t.
The mine equipment shortages have now been addressed, with haulage truck capacity restored and an additional loader transferred from another mine owned by African Barrick Gold (Bulyanhulu). Production levels should show a corresponding increase in the second half of 2010.
Cash costs amounted to $641 per ounce sold for the six months ended 30 June 2010. This was 70% higher than the prior year period ($377 per ounce sold). This was driven by the combination of lower production and increased direct mining costs associated with energy, labour, maintenance and administration costs, coupled with the high fixed cost element at the operation.
Gold ounces sold for the six months ended 30 June 2010 were in line with ounces produced for the period.
Capital expenditure equalled $5.5 million for the six month period ended 30 June 2010. This was 297% higher than the prior year period ($1.4 million). The increase relates to the implementation of an aggressive exploration drilling programme for both the underground and open pit resources in order to extend Tulawaka’s mine life beyond 2011.
East Zone Underground Extensions At Tulawaka East Zone Underground, exploration drilling continued to extend the known high-grade mineralised shoots below the previously defined Level 7 resource, indicating potential to extend mine life beyond 2011. At the same time, surface exploration drilling on Main West Zone and Mojamoja prospects continued to extend the potential near-surface open-pit resources within trucking distance to the Tulawaka plant.
A total of 79 diamond core holes for 8,473m have been drilled to test the Tulawaka East Zone underground extensions below Level 7. Drilling to date shows the mineralised quartz veins extend at least down to Level 10 (45m below Level 7), and has intersected visible gold within quartz veining in several drill holes. The intersections confirm the projections made for the Zone 150 shoot, for which it is estimated that the entire block would add approximately 60K ounces to the reserve base if fully drilled out by year-end. A selection of the better intersections returned to date from the 79-hole underground exploration drill program include:
|Hole ID||Mine Grid||From||Interval||Au|
Note : intervals are along the hole
Diamond drilling continues to test depth, plunge and strike extensions to the mineralised lodes throughout the East Zone and is currently focused on increasing reserves and resources for the year end update. The zone 150 represents only one of six mineral shoots being explored (see longitudinal section on MDN’s web site) in the underground mine levels.
The Tulawaka Underground Project approval in April 2007 was based on an ore reserve of 99,870 ounces. As at June 2010, a total of 94,304 ounces had been mined out from the East Zone underground. It is projected that the Mine would achieve a milestone of mining total start up reserves by Q3 2010. Additional drilling from 2008 has proved successful in extending the reserve base, enabling us to continue mining underground. The current indications from the results of the drill programmes to date are that the Tulawaka mine life would be extended beyond 2011, based on underground and surface resources.
Main West Zone Extensions & Mojamoja Prospect At Tulawaka, reverse circulation drilling at the Mojamoja target, approximately 4km northwest of the Tulawaka plant, continued to expand the new zone of gold mineralisation identified in early 2010. A total of 102 RC holes and eight diamond holes have been completed for 9,345.8m year to date at the Mojamoja prospect, and a further 77 RC holes and three diamond holes completed for 6,256m at the Main West Zone prospect. “Tulawaka-style” quartz veining has been encountered throughout the drilling program, with visible gold observed in RC chips associated with higher grade gold assays. Better drill intersections from Main West Zone and Mojamoja include:
|Hole ID||Mine Grid||From||Interval||Au||Area|
Intervals are along the hole
*Hole 55 & 59 have been previously reported (Press release of April 29, 2010)
Results to date indicate potential to identify additional near surface satellite open pit resources to Tulawaka, and preliminary scoping studies are underway.
The samples were analysed by fire assay at the Tulawaka Mine Laboratory and SGS Laboratory of Mwanza, Tanzania, which both are certified according to international standards. Supervision of the drill program and of the quality analysis verification program are done by ABG Tulawaka Mine Geologists. The technical and scientific information contained in this press release have been reviewed by Marc Boisvert, P.Eng. and Vice President, Exploration, who acts as a qualified person in accordance with National Instrument 43-101.
MDN Inc.(TSX:MDN) is a mining exploration and development company having adequate financial resources to develop its promising projects in Québec and in Tanzania. MDN also remains active in the search for new business opportunities that can raise shareholder value. In addition to its 30% participating interest in the Tulawaka Gold Mine, MDN is the operator and owner of a majority interest in mineral licenses totalling 715 sq km around the Tulawaka gold mine in Tanzania. The company also owns a 67.5% interest in Minéraux Crevier, which owns a property with a NI 43-101 niobium and tantalum resource located in the Lac St-Jean area of Québec. MDN has an option to increase its equity participation in Minéraux Crevier up to 87.5%. Additional information is available on MDN’s website at www.niobaymetals.com.
Forward looking statements
All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements are discussed in greater detail in the Company’s most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. Investors and others who base themselves on the Company’s forward-looking statements should carefully consider the factors mentioned in the Annual Information Form as well as the uncertainties they represent and the risk they entail. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.
- Serge Bureau, P.Eng.
President and CEO
514-866-6500, ext. 221
Marc Boisvert, P.Eng
Vice President, Exploration
514-866-6500, ext. 227
Sun International Communications