November 09, 2010 10:53 ET
MDN Reports its Financial Results for the Third Quarter
MONTREAL, QUEBEC–(Marketwire – Nov. 9, 2010) – MDN Inc. (“MDN”) (TSX:MDN) is pleased to report that it filed its interim financial results today for the three- and nine-month periods ended September 30, 2010. The interim financial statements and management discussion and analysis can be found on the Company’s website (www.niobaymetals.com) and on SEDAR (www.sedar.com).
THIRD QUARTER HIGHLIGHTS
The second drilling program on Ikungu, the Company’s flagship project, began on July 30 and continued successfully throughout the third quarter. At the end of September, 10 holes totalling 4,403 m of the planned 5,000 m had been drilled, and good exploration results have been obtained:
- The structure hosting the mineralization shows continuity over more than 2.5 km, with gold intersections such as IKD-28 (10.95 g/t Au over 2.3 m) and IKD-36 (13.22 g/t Au over 4.1m) indicating the presence of high-grade zones;
- A concentration of such high-grade zones has been identified in the central sector and to the east of the structure. The next drilling program will test the continuity of zones with intersections averaging over 10 g/t;
- The results for Hole IKD-39 (19.26 g/t Au over 1.53 m in the main structure and 8.46 g/t over 1.37 m in an adjacent zone) showed vertical continuity to a depth of over 250 metres. The presence of a mineralized zone parallel to the main structure enhances the potential for discovery of new mineralized zones;
- The impressive results for Hole IKD-45 (8.60 g/t Au over 14.67 m) were obtained from a previously-undrilled 300-m zone. Gold values are associated with the presence of sulphides (over 1% in places) containing pyrite, chalcopyrite and pyrrhotite, as well as a very homogenous network of bluish-grey quartz veins indicating strong silicification.
“The most recent drilling program on Ikungu, which is still underway, has substantiated our interest in the property, and MDN’s management team has decided to pursue this work in the new year. This program will enable us to improve our understanding of the geology of this area, and possibly to outline a new gold resource,” said Serge Bureau, President and Chief Executive Officer of MDN.
In the second quarter, MDN announced the gradual acquisition of a 50% interest in the MCGold project in consideration of a schedule of payments and exploration expenditures of up to $5.25 million over five years. This property lies five km from Chibougamau, Quebec, and hosts a mineral deposit associated with a large envelope of disseminated pyrite measuring 200 m wide by 800 m long. The average gold grade may have been underestimated due to a shortage of samples from historical drilling in the centre of the deposit. MDN and SOQUEM began drilling in the third quarter with the goal of testing the potential for increasing the gold grade and the extensions of the known mineralization. The project currently has a 43-101 resource of 166,200 ounces of gold at a grade of 1.61 g Au/t using a cutoff grade of 1.0 g Au/t.
The Tulawaka gold mine in Tanzania, where MDN holds a 30% interest, produced 15,645 ounces of gold in the third quarter of 2010 at an average grade of 8.7 g/t gold. MDN’s share was 4,694 ounces of gold. Third-quarter gold production was lower than in the same quarter of last year because the mined grade of 8.7 g/t Au was well below the 2009 grade of 17.4 g/t Au. The underground operation was unable to reach the high-grade ore due to a delay in the commissioning of new mine equipment. Lower-grade ore from surface stockpiles was used to make up for the shortfall in underground production.
Exploration carried out by operator African Barrick Gold at the Tulawaka Mine confirmed the continuity of the deposit at depth and continued to delineate the near-surface Mojamoja and West gold-bearing zones, which lie near the existing mine and are covered by the joint venture agreement between African Barrick Gold and MDN. This program will be followed by a resource update on the property in early 2011.
Crevier Project Development
MDN is progressing with the feasibility study started in early 2010 on the Crevier deposit (resource of 25.4 tonnes of niobium-tantalum ore in Quebec). The key program activities are proceeded on schedule and within budget, including metallurgical development, the environmental baseline study, geotechnical characterization of the open pit rock, tailings management and definition drilling to the south of the future open pit.
Net revenue for the third quarter totalled $33,015 compared to $2,790,286 for the same period in 2009. The decrease was due to lower gold production and the utilization of available cash in an aggressive exploration and development program at the Tulawaka gold mine.
The Company reported a net loss of $516,905 or $0.005 per share compared to net income of $737,649 or $0.008 per share for the same period in 2009.
At September 30, 2010, MDN had cash assets of $13.4 million (cash and investments) compared to $17.3 million at December 31, 2009.
SUMMARY OF OPERATING RESULTS
|For the three months ended September 30, 2010 and 2009||2010||2009|
|(thousands of dollars, except per share amounts)|
|Foreign exchange gain (loss)||$||(109||)||$||(420||)|
|Net income (loss) attributable to the shareholders of the Company||$||(509||)||$||738|
|Basic and fully diluted net income (loss) per share||$||(0.005||)||$||0.008|
|Weighted-average number of outstanding shares (in thousands)||98,158||94,939|
MDN Inc.(TSX:MDN) is a mining exploration and development company with sufficient financial resources to develop its projects in Quebec and Tanzania. The Company also remains 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 703 km2in the vicinity of the Tulawaka mine. MDN Inc. also holds a 67.5% interest in Crevier Minerals Inc. which owns a 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 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 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.
- MDN Inc.
Serge Bureau, Ing.
President and Chief Executive Officer
514-866-6500, Ext. 221
Marc Boisvert, Ing.
Vice President, Exploration
514-866-6500, Ext. 227
Sun International Communications
Nicole Blanchard, Investor Relations