MDN Inc.

August 13, 2012 08:30 ET

MDN Reports Its Financial Results for the Second Quarter of 2012

MONTREAL, QUEBEC–(Marketwire – Aug. 13, 2012) – MDN inc. (“MDN”)(TSX:MDN) announces its financial results for the second quarter ended June 30, 2012. The management discussion and analysis and the interim financial report will be available Tuesday August 14, 2012, on the Corporation’s website and on SEDAR (

A net loss of $583,820, or $0.006 per share, was incurred for the second quarter compared to a net loss of $154,462, or $0.003 per share for the same period in 2011. MDN revenues are historically attributable to royalties distributed from the Tulawaka gold mine in Tanzania. During the first half of the year, due to capital expenditures of US$9.6 million, a 3% increase for the same period in 2011, and a reduced gold production, MDN royalties distributed for the first half of 2012 totaled $313,144 compared to $1,187,830 for the first half of 2011. As of June 30, 2012, working capital for the Company amounted to $7.73 million.

In thousands of dollars, except per share amounts
For the periods ended June 30 Q2-2012 Q2-2011 6 months 2012 6 months 2011
Total revenues net of financial charges 363 1,272 312 1,254
Administration expenses 981 1,069 1,874 1,877
Net loss attributable to shareholders of the Company (584 ) (154 ) (2,221 ) (794 )
Net loss per share (0,006 ) (0,003 ) (0,02 ) (0,009 )
Number of shares outstanding (in thousands) 101,527 99,976 101,527 99,976

Tulawaka Mine

Total gold production for the Tulawaka mine was 10,537 ounces during the second quarter compared to 21,517 ounces for the same quarter in 2011. Direct operating costs for the quarter were US$1,305 per ounce sold compared to US$645 for the same quarter in 2011. This cost increase is mainly due to a lower level of production, increased mining activity (related to low grade ore at surface), combined with higher maintenance costs for an aging fleet of mining equipments and a general increase in administration costs.

Capital expenditures during the first half of the year totalled US$9.6 million of which US$5.5 million went towards underground development and exploration drilling of the extensions and US$ 4.1 million of sustaining capital for the mine.

Reserves replacement and extension of the life-of-mine

African Barrick Gold (“ABG”) continued its underground exploration program and announced the replacement of reserves mined in the first half of 2012 and also announced the extension of the life-of-mine until 2013. Diamond drilling is continuing in order to verify the depth, plunge and extensions of the mineralised veins between levels 10 and 12, under the current reserves in the East Zone. MDN remain confident of further extending the life-of-mine.

(Reference, press release dated July 23, 2012)

Exploration in Tanzania


During the second quarter, a second drilling program on the Nikonga project commenced June 11, 2012. As of June 30, we had drilled 793 meters of a planned program of 1,850 meters. A total of 4 holes are completed (NKD-03, 04, 05 and 06) and sampling is underway.

The objective of this program is to test drilling extensions of NKD-02 (12.3 g/t Au over 4.2 m and 10.9 g/t Au over 4.9 m) in the “Keseria Main” zone with 7 additional drillings. Two more drillings are planned further north; with the aim of verifying the parallel structure Keseria North, already intersected by drilling NKRC-14 (14.5 g/t Au / 2m). Also an additional drilling will test the soil anomaly located in the northern part of the property, where the soils show the highest values ΓÇïΓÇïon the property.

A ground magnetic survey was completed for a total of 177 km of lines spaced every 100 meters to cover an area of ΓÇïΓÇï16 km2.

Ikungu East

MDN acquired mining properties located to the East of its Ikungu property. The new property covers an area of ΓÇïΓÇï133.33 km2 and MDN holds 100% ownership. The mining licences of these properties were granted to MDN by the Ministry of Energy and Minerals of the United Republic of Tanzania.

The geological compilation of available information and the interpretation of the data by MDN geologists suggest that the eastern extension of Ikungu’s gold structure on these new mining permits continues. The acquisition of these properties will allow MDN to explore 15 additional kilometers alongside Ikungu’s structure. This new property covers a large portion of the territory located between the Ikungu property and the artisanal gold mining site “Magarombe”, which is aligned with the colonial mine “Buhemba” in terms of high gold-bearing production. The mine produced 393,000 tonnes of ore at a grade of 12 g/t Au.

A program of mapping and prospecting is underway. In addition, to accelerate exploration work on the main Ikungu property in order to complete a 43-101 resource report, MDN is currently seeking an investment partner.

Crevier project development

Throughout the first half of the year, we continued with the development of the feasibility study for the Crevier project. Expenses for the second quarter totalled $246,725 and efforts were focused on the development of metallurgical processing. In terms of the development of the flotation process, a second metallurgical pilot plant test is planned in the second half of 2012 in order to complete the feasibility study in 2013.

The hydrometallurgy program is progressing as planned and so far, the test results tend to confirm the assumptions used in the preparation of the Preliminary Economic Study for the Crevier project and show that we could have an improvement in the parameters used.

Marc Boisvert, P. Geo, Vice President – Exploration is a Qualified Person under NI 43-101 and has reviewed the technical and scientific information in this press release.

About MDN

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

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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