MONTREAL, QUEBEC--(Marketwire - Feb. 16, 2011) - MDN Inc. (News - Market indication) -
Editor's note: A map for this release is available on Marketwire's website.
MDN Inc. ("MDN") notifies its shareholders that African Barrick Gold plc (ABG), the project operator of the Tulawaka gold mine in Tanzania in which MDN has a 30% participating interest, announced fourth quarter and twelve months operational results.
Operational Highlights
- The focus for the Tulawaka mine has successfully shifted from closure to mine life extension
- The mine's program has continued to outperform the original feasibility study for the underground operations, with an initial extension of its life-of-mine for the full year 2011 and into the second quarter of 2012
- Exploration drilling program will continue at the site with the aim of further increasing the life of mine. If successful, we anticipate this will be based solely on the underground operation through the addition of a second portal. An update on this will be provided later in the year.
- Towards the end of the year, Basie Maree was appointed General Manager of Tulawaka. Basie brings substantial experience of the industry, including a number of years with Anglo American, and will lead Tulawaka forward into a new stage of its development.
- Capital investment projects include additional underground mining equipment for the mine and continued security investment.
Operating performance (reflected as 100%)
Tulawaka has successfully outperformed its original feasibility for the underground operation in terms of reserve additions and ounce production. Throughout the year a key focus of the mine's management has been on exploration and definition drilling to extend the mine life beyond 2011. We are pleased to announce an initial extension of the life-of-mine to the second quarter of 2012 and will continue to focus on further extensions in 2011.
The mine's gold production for the year was 60,134 ounces compared to the 94,180 ounces achieved in 2009. This lower gold-production level resulted from mining lower-grade ore from the underground operations and processing lower-grade material from the stockpiles than in 2009.
Gold ounces sold amounted to 63,909 for the year, 6% higher than production and down 32% compared to 2009, reflecting the decline in production.
Cash costs for the year were US$709 per ounce sold compared to US$413 in the prior year. This cost increase was mainly due to the lower production base and increased mining costs compared with 2009. The increased mining costs were driven by higher fuel, labour and maintenance costs.
Cash costs per tonne milled increased to US$93 in 2010 (US$87 in 2009) primarily as a result of the higher cost of underground mining.
Capital expenditure for the year totalled US$15.5 million compared to US$7.9 million for the previous year. Notable investments included additional mining equipment (US$4.4 million), increased exploration development (US$2.8 million) and the support of mine-life extension.
Exploration and evaluation costs of US$3.6 million were incurred in 2010 to advance the exploration at greenfields projects, namely to test satellite open pit opportunities.
Serge Bureau, President and CEO of MDN commented: "We are supportive of the investment incurred at Tulawaka and are pleased about the initial extension of the life of mine. We look forward to a continuation of the underground exploration program to expand the resource base".
Exploration Review
Tulawaka East Zone Underground Extension
Throughout the year, the focus of the near-mine expansion programmes at Tulawaka was on the East Zone Underground Extensions. The objective of the drilling here is to identify and delineate additional high-grade gold reserves and resources below the current East Zone underground infrastructure, with the primary purpose of extending the life of the Tulawaka mine.
The exploration drilling continued to extend the known high-grade mineralised shoots below the Level 7 resource that had previously been defined, indicating potential to extend the mine life further. Overall, the drilling programmes indicate that existing mineralised zones continue to at least 150 metres below the floor of Tulawaka's now completed open pit. The drill programmes will continue throughout 2011, which will aim to extend known high-grade zones for a further 100-200 metres below currently defined depths. In this way, possible significant expansion of the current resource base will be assessed to add further reserves and extend the mine life through an exclusively underground operation.
African Barrick Gold also published the new Tulawaka Mine Gold Reserves and Resources. During 2010, 72% of the proven and probable reserve was replaced, from 134,000 to 96,000 ounces. The exploration program allowed for a 180% mineral resource increase, from 46,000 to 129,000 ounces, giving further potential life of mine increase. The Reserves and Resources (stated at 100%) are as follows:
About MDN
MDN Inc. (News - Market indication) is a mining exploration and development company exploring and developing its exploration projects in Quebec and Tanzania. MDN 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 767 km2 in the vicinity of the Tulawaka mine. MDN Inc. also owns a 67.5% interest in Crevier Minerals Inc. which owns an NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Québec. 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.mdn-mines.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.
To view the map Tulawaka East Zone associated with this press release, please visit the following link: http://www.marketwire.com/library/20110216-TULAKAWA_800.jpg
