MDN Inc.

October 26, 2012 07:59 ET

MDN Inc.: Tulawaka 2012 Third Quarter Results/Focus on Mine Life Extension

MONTREAL, QUEBEC–(Marketwire – Oct. 26, 2012) – MDN Inc. (“MDN”) (TSX:MDN) reports to its shareholders that African Barrick Gold plc (ABG), the operator at the Tulawaka gold mine in Tanzania, in which MDN has a 30% participating interest, announced its third quarter and nine months operational results.


At Tulawaka, there was an increased focus on underground development work aimed at extending the mine life. As a result, there was a 30% decline in ore tonnes mined compared to Q3 2011. Together, with the lack of surface stockpiles, this led to continued batch processing of the underground material blended with mineralised waste.

Key statistics

Tulawaka (reflected as 100%) Three months ended
September 30
Nine months ended
September 30
(Unaudited) 2012 2011 2012 2011
Underground ore tonnes hoisted Kt 46 66 130 151
Open pit ore tonnes mined Kt 3 61 3
Open pit waste tonnes mined Kt 84 317 84
Ore milled Kt 61 97 216 311
Head grade g/t 5.7 6.8 5.6 6.4
Mill recovery % 95.8 % 96.0 % 95.7 % 94.9 %
Ounces produced Oz 10,773 20,160 37,273 61,291
Ounces sold Oz 11,900 20,900 38,150 61,750
Cash cost per ounce sold US$/oz 1,309 749 1,128 707
Cash cost per tonne milled US$/t 254 162 200 140
Capital expenditure (100%) US$(000) 7,638 8,111 17,202 17,390

Operating performance

The focus during the quarter at Tulawaka was on increasing underground development rates and as a result, lower ore tonnes were mined and a higher proportion of ore tonnes were sourced from lower grade development stopes.

The batch milling campaign continued in the quarter resulting in a 37% decrease in throughput compared to Q3 2011. In order to maximise efficiencies in the process plant, ore tonnes mined were blended with mineral waste for processing, which led to a 16% reduction in head grade against the prior year and together with the lower throughput led to total gold production for the quarter of 10,773 ounces compared to the 20,160 ounces produced in Q3 2011. Gold ounces sold were 10% higher than production.

Cash costs for the quarter were US$1,309 per ounce sold compared to US$749 for third quarter of 2011. This was mainly due to costs being spread over the lower production base and increased consumables usage driven by drilling supplies, explosives and ground support material used in the underground development.

Capital expenditure for the quarter totalled US$7.6 million compared to US$8.1 million for the same period in 2011. Key capital expenditure items included:

  1. Capitalised development: capitalised underground development (US$1.8 million);
  2. Expansion capital: capitalised exploration drilling (US$1.1 million); and
  3. Sustaining capital: capital invested to support the mine life extension (US$4.7 million).

Growth Projects

Eastern Underground Extensions

ABG continues to examine the potential extension of the mine life at Tulawaka beyond the middle of 2013. As a part of this, we have progressed with the development of the second access portal during the quarter, with development drift from the underground toward the portal, is now close to completion. This portal will allow us to increase mining activity and also provide further platforms for exploration drilling.

The Tulawaka project is a contractual joint-venture between MDN (30% participating interest) and Pangea Goldfields Inc. (70% participating interest), a wholly owned indirect subsidiary of African Barrick Gold plc and project operator and owner through its subsidiary Pangea Minerals Ltd. The information disclosed on the Tulawaka Gold Mine is based on information provided by the Operator.

About MDN

MDN Inc. (TSX:MDN) is a mining exploration and development company with properties in Quebec and Tanzania. In Tanzania, MDN has a 30% participating interest in the Tulawaka gold mine, which produced over 84,000 ounces of gold in 2011, as well as two promising gold projects, Ikungu and Nikonga. In Quebec, MDN owns a 72.5% interest in Crevier Minerals Inc., which owns an NI 43-101 niobium-tantalum resource that is presently at the feasibility study stage.

Forward-Looking Statements

Other than statements of historical fact, all statements in this release that address events or developments that the Company expects to occur are forward-looking statements. Although the Company believes that 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 the 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 as such, the forward-looking statements in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

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