MDN Inc.

October 20, 2011 09:19 ET

MDN Reports a 29% Increase in Gold Production at Tulawaka for the Quarter and Extension of Mine Life

MONTREAL, QUEBEC–(Marketwire – Oct. 20, 2011) – MDN Inc. (“MDN”) (TSX: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 third quarter and nine months operational results ended September 30, 2011. Highlights include:

  • The Tulawaka mine continues to deliver increased grades from underground higher grade areas
  • A detailed update of the resource and mine life at Tulawaka is planned for the end of the year

Gold production at Tulawaka (100%) for the quarter was 20,160 ounces, a 29% increase over the prior year period which totalled 15,646 ounces. Year to date production for 2011 totalled 61,291 ounces, 42% higher than the prior year. The increase in production was a direct result of mining higher grade underground stopes supported by improved mine equipment availability. This translated into a head grade of 6.8 g/t, compared to 4.1 g/t in the prior year period, and improved recoveries. Lower throughput was the result of the increased proportion of feed coming from higher grade ore which has a higher grind index than the surface stockpiles.

Cash costs for the quarter were $749 per ounce sold, the same as the prior year period. Year to date cash costs were $707 per ounce, 4% higher than the prior year. The increase in underlying costs has been offset by an increase in ounces produced for the quarter resulting in flat costs on a per ounce basis.

Cash costs per tonne milled for Q3 2011 increased to $162 per tonne milled compared to $92 per tonne milled in prior year period due to the 24% decrease in tonnes milled together with higher operating costs. Year to date cash costs per tonne milled increased from $82 in 2010 to $140 in 2011.

Capital expenditure for the quarter of $8.1 million was 52% higher than prior year period of $5.3 million. The main areas of capital expenditure were $1.7 million for security and $1.4 million for underground development. Non-cash reclamation adjustments amounted to $4.3 million. Year to date capital expenditure totalled $17.4 million, including underground drilling work for $2.1 million, representing a year-on-year increase of 62%.

Tulawaka (reflected as 100%) Three months ended
30 September
Nine months ended
30 September
(Unaudited) 2011 2010 2011 2010
Underground ore tonnes hoisted Kt 66 40 151 91
West open pit extension ore tonnes mined Kt 3 3
West open pit extension waste tonnes mined Kt 84 84
Ore milled Kt 97 127 311 368
Head grade g/t 6.8 4.1 6.4 3.9
Mill recovery % 96.0% 93.1% 94.9% 93.2%
Ounces produced oz 20,160 15,646 61,291 43,162
Ounces sold oz 20,900 15,564 61,750 44,613
Cash cost/ounces sold $/oz 749 749 707 678
Cash cost per tonne milled $/t 162 92 140 82
Capital expenditure $(000) 8,111 5,336 17,390 10,725

EXPLORATION AND DEVELOPMENT UPDATE

At Tulawaka East Zone Underground, exploration drilling continued to extend the known high-grade mineralised shoots below current reserves. We have now identified sufficient mineralisation in order to extend the mine life to the end of 2012 and are assessing the potential to further extend the mine life beyond this.

Underground Extensions

Diamond drilling continues to test depth, plunge and strike extensions to the mineralised lodes below current reserves throughout the Tulawaka mine. A total of 46 diamond core holes for 4,070 metres were drilled between Level 8 and Level 15 throughout the underground area, but primarily focused on the western areas of the underground during the quarter. Underground drilling for the remainder of the year and into 2012 will begin to target high grade extensions below the East Pit in Zones 550 and 800. Drilling to date shows the mineralised quartz veins extend at least down to Level 12, and has intersected visible gold within quartz veining in several drill holes, such as TUGD00359 – 0.5m @ 10.90g/t from 41.5m, TUGD00356 – 2.5m @ 8.56g/t from 105.5m.

Figure 1 – Longitudinal Section of 2011 UG drilling (red) and planned 2011/2012 UG drilling (blue), and selected intersections for the quarter in bold (http://file.marketwire.com/release/mapeng.pdf).

Mojamoja – West Zone “Gap” – Surface drilling

A total of 22 RC holes for 2,389 metres were drilled as part of an infill programme, between the West Zone and Mojamoja prospects, in the “Gap” area. The Mojamoja and West Zone prospects lie approximately 4km northwest of the Tulawaka plant, and ABG is looking at the potential to delineate further open pit resources to be trucked to this plant. The current infill programme is aimed at delineating additional resources between the two previously drilled areas, and could potentially increase the overall open pit resources. All assays were pending at the end of the quarter.

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 are 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.

About MDN

MDN Inc. (TSX:MDN) is a mining exploration and development company exploring and developing projects in Quebec and Tanzania. The Company is also active in the search for new business opportunities that can increase shareholder value. In addition to its 30% 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 also has 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.

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.

CONTACT INFORMATION

  • Serge Bureau, P.Eng.
    President and CEO
    MDN Inc.
    514-866-6500, ext. 221

    Marc Boisvert, P.Eng.
    Vice President, Exploration
    MDN Inc.
    514-866-6500, ext. 227

    Nicole Blanchard, Investor Relations
    Sun International Communications
    450-973-6600
    Nicole.blanchard@isuncomm.com