April 19, 2012 08:09 ET
MDN Inc.: Tulawaka First Quarter Results
Drilling intercepts high grade Gold values in zones 500-850
MONTREAL, QUEBEC–(Marketwire – April 19, 2012) – MDN Inc. (TSX:MDN) (“MDN”) reports 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 first quarter operational results.
Total gold production at Tulawaka for the quarter was 15,963 ounces compared to the 19,616 ounces produced in Q1 2011. Higher grade ore from the underground mining area was blended with lower grade supplemental ore from the West pit extension, resulting in a slight decrease in head grade. Gold ounces sold were broadly in line with production and down 8% on Q1 2011 reflecting the lower production.
Cash costs for the quarter were US$902 per ounce sold compared to US$738 in the prior year. This cost increase was mainly due to the increase in open pit mining activity which resulted in increased headcount, maintenance and contracted services as well as year-on-year inflationary increases. These were partially offset by increased capitalized mine development costs due to the higher underground mining cost base.
Cash costs per tonne milled increased to US$158 in the quarter from US$123 in Q1 2011, primarily as a result of the cost increases detailed above and lower throughput.
Having extended the mine life twice in 2011, ABG is also continuing the exploration drilling programs and is aiming to be in a position later in the year to make a commitment to further mine life extensions. As a result of the mine life extensions and lack of availability of surface material from Q2 2012, the process plant will begin to operate under a batch processing method. The reduction in throughput will see reduced production during the second quarter before an expected increase in the grade profile in H2 2012. Work will also continue through 2012 to construct a second underground portal to enable the operator to increase mining rates from the underground.
Capital expenditure for the quarter totaled US$5.1 million compared to US$3.9 million for the previous year. Key capital expenditure items included:
- Capitalized development: capitalized underground development (US$2.4 million); and capitalized exploration drilling (US$0.8 million).
- Expansion capital: expenditure incurred on the extension of the mine life (US$1.7 million)
Tulawaka production results (reflected as 100%)
|Three months ended||Year ended|
|31 March||31 December|
|Underground ore tonnes hoisted||Kt||43||43||206|
|Open pit ore tonnes mined||Kt||61||–||31|
|Open pit waste tonnes mined||Kt||317||–||710|
|Cash cost/ounces sold||$/oz||902||738||727|
|Cash cost per tonne milled||$/t||158||123||146|
Exploration and Development Update
Tulawaka East Zone Underground Extensions
The current program is targeting high grade mineralized shoots within Zones 500-850 between Levels 11 and 15, below the current reserves. The drill results to date indicate that the mineralization is exhibiting similar characteristics as in the upper levels of the mine.
Selected assay results for Tulawaka underground drilling during the quarter included:
Link to access drill result map: http://www.niobaymetals.com/pdf/cartes/Tulawaka_drill%20results%202012.pdf
These grades zones were intersected at the hanging wall between Levels 11 and 12 (550 zone) which ties in well with the expected high grades at the eastern portion of the deposit. The underground drill program is expected to continue throughout 2012 targeting the eastern areas of the underground which to date have had limited testing due to lack of drill drive access.
The samples were analyzed 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 is done by ABG Tulawaka Mine Geologists. Marc Boisvert, geological engineer, Vice President, Exploration, and a qualified person under National Instrument 43-101 has reviewed the technical and scientific information in this news release.
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.
MDN Inc. (TSX:MDN) is a mining exploration and development company exploring and developing projects in Quebec and Tanzania. MDN is also active in the search for new business opportunities that can increase 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 757 km2 in the vicinity of the Tulawaka mine. MDN Inc. also owns a 72.5% interest in Crevier Minerals Inc., which owns an NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Quebec. MDN has an option to increase its equity participation in Crevier Minerals Inc. to a maximum of 87.5%. Additional information is available on MDN’s website at www.niobaymetals.com.
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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.
Serge Bureau. Ing.
President and Chief Executive Officer
Tel: 514 866-6500. Ext. 221
Tel: 514 866-6500. Ext. 228
Marc Boisvert. Ing.
Vice President. Exploration
Tel: 514 866-6500. Ext. 227