Avanti Mining Plc. Receives Positive Prefeasibility Study Confirming Robust Economics for Restart of Kitsault Mine by 24hgold

Monday, November 16, 2009

Avanti Mining Receives Positive Prefeasibility Study Confirming Robust Economics for Restart of Kitsault Mine

Vancouver, British Columbia: Avanti Mining Inc. (TSX-V:AVT) ("Avanti") is pleased to release the results of the NI 43-101 Preliminary Feasibility Study ("PFS") prepared by Wardrop, a Tetra Tech Company ("Wardrop") on its 100% owned Kitsault Molybdenum property in British Columbia, Canada. The complete report will be filed on SEDAR and Avanti's web site, www.avantimining.com, within 45 days of the issue of this press release. All figures in US dollars and were derived assuming 100% equity funding excluding the benefits and cost of potential debt financing.

Highlights include:

The mine plan calls for a total of 215.3 million tonnes of proven and probable reserves grading 0.085% molybdenum to be mined over a 15 - year mine life, producing 368 million pounds of molybdenum. The first five years of production averages 0.10% Mo;
Initial capital costs are estimated at $641 million;
Cash operating costs are estimated to be $4.43/lb of accountable molybdenum (recovered molybdenum less 1% deductions);
The average life of mine (LOM) price of molybdenum for base case scenario is computed by using the CPM Group projections and it is $15.88/lb.
The base case after-tax NPV(8%) is $551 million, with an IRR of 20.6%
Projected undiscounted net cash flow (after-tax) is $1.56 billion;
Annual metal production for the mine life averages 24.5 million pounds of molybdenum with the first five years averaging 29.2 million pounds per year;
The mine has certain infrastructure in place with road and ocean freight access to the mine site and will be serviced by the BC Hydro transmission grid;
Develop a Run-of-River Hydro-electric project, by taking advantage of the site water diversion design in managing runoff from the average 2 meters of precipitation.
The Hydroelectric project may represent a long lived project asset with implications for project reclamation financing.
The reopening of the mine is projected to create over 330 jobs in addition to 250 construction jobs over that 3 year period.
The mines existing M-10 permit can be amended under the BC Mines Act process or a voluntary BC Environmental Assessment Act "opt-in" process.

"We are delighted that the PFS confirms the preliminary economic assessment done in 2008 by SRK" stated Craig J. Nelsen, Avanti's President and CEO. "We are happy with the robust economics disclosed in this report, with the most significant changes being the reduction in operating costs per lb to $4.43 per pound and the increase in the capex primarily due to on-site engineering of the tailing management facility and water diversion civil works. The discounted net present value of the project represents value of over $2.25 per issued share of Avanti. We plan to immediately embark on marketing and project financing efforts in parallel with initiating the Project's bankable feasibility study and continue mine permitting activities."

Project Description

The Kitsault property is located about 140 km north of Prince Rupert, British Columbia, and south of the head of Alice Arm, an inlet of the Pacific Ocean. The property includes three known molybdenum deposits, Kitsault, Bell Moly, and Roundy Creek. The Kitsault mine was a producer of molybdenum between 1967 and 1972 and from 1981 to 1982 with total production on the property during both periods being approximately 30 million pounds of molybdenum.

Kitsault has road access to the mine site, which is approximately 12 km from ocean transport routes and is serviced by the BC Hydro transmission grid. The PFS estimates that the Kitsault Mine would operate at an annual resource throughput rate of 14.6 million tonnes, or 40,000tpd, with a strip ratio of 0.75:1 during a mine life of 15 years. The ore mined will be crushed in a gyratory primary crusher, then ground using a SAG-ball mill configuration. The molybdenum concentrate will be dried and packaged into bags for shipment. The life-of mine molybdenum production is estimated at 368 million pounds of molybdenum contained in 320,301 tonnes of molybdenum concentrate produced from the processing of 215.3 million tonnes of reserves grading 0.085%Mo. Total molybdenum recovery is estimated at 90.6%.

Mineral Resource/Reserves Statement

The mineral resources are reported in accordance with National Instrument 43-101 ("NI 43-101"). The audit of this resource estimate was completed by Jeffrey Volk, P.Geo, an independent Qualified Person (QP), as this term is defined in NI 43-101. The effective date of this resource estimate is March 31, 2009 and the results were previously released on April 6, 2009. The mineral resource statement for the Kitsault molybdenum project is presented in Table 1 below:

Table 1 Mineral Resource Statement* for the Kitsault Molybdenum Deposit -- March 31, 2009

Resource Classification	Qty (Mt)	Grade				Contained Metal
Resource Classification	Qty (Mt)	Mo (%)	Ag (g/t)	Pb (%)	WO₃ (%)	Mo (Mlb)	Ag (Moz)	Pb (Mlb)	WO₃ (Mlb)
Measured**	54	0.112	4.54	0.022	0.007	133	8	26	8
Indicated**	153	0.088	5.24	0.025	0.006	297	26	84	20
Measured & Indicated**	207	0.094	5.06	0.024	0.006	430	34	110	28
Inferred**	26	0.069	4.15	0.019	0.005	40	4	11	3

*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures have been rounded to reflect the relative accuracy of the estimates. The cut-off grades are based on metal price assumptions of US$20.00/lb Mo, and a metallurgical recovery of 89% Mo. Silver, lead, and WO₃ were not used in the pit optimization.
** Reported at a cut-off grade of 0.04 % Mo contained within a potentially economic open pit.

The mineral resources are reported at a cut-off grade to reflect the "reasonable prospects" for economic extraction. It is considered that portions of the Kitsault molybdenum deposit are amenable for open pit extraction, and has not considered underground mining methods for deeper portions of the deposit.

The following Table 2 reflects the material present at various cut-off grades.

Table 2 Mo Cut-off Grade Sensitivity Analyses within Resource Pit -- Measured and Indicated Resources

Cutoff Grade (Mo%)	Quantity (Mt)	Mo Grade (%)	Contained Metal Mo (Mlb)
0.02	315	0.072	501
0.025	292	0.076	490
0.03	257	0.083	468
0.035	234	0.088	452
0.04	207	0.094	430
0.045	197	0.097	420
0.05	189	0.099	412
0.055	183	0.100	405
0.06	178	0.102	398
0.065	170	0.103	388
0.07	163	0.105	377
0.075	151	0.108	357
0.08	134	0.111	329

Avanti has completed a significant volume of work during the 2008 field season, which included a 33-hole (10,131 m) infill drilling program. This program focused on both conversion of inferred to indicated resources as well as the confirmation of the historical drilling results. The results of this program have been reviewed; the assay results from the 2008 drilling compare closely with the assays from the historic drilling and are overall confirmatory. In addition, the 2008 program successfully converted inferred resources to indicated and measured resources, and the current
drillhole spacing within the Kitsault deposit appears sufficient to advance the project to feasibility level studies.

The Kitsault mine Mineral Reserves have been prepared in accordance with NI 43-101 standards and CIM standard definitions. This statement has been prepared by Mr. Miloje Vicentijevic (P.Eng.) of Wardrop, a QP as defined in NI 43-101. These reserves are sufficient for close to 15 years of operation at an annual production rate of 40,000 t/d. Mineral Reserves are summarized by class in Table 3. The notes accompanying Table 3 are an integral part of the Mineral Reserves and should be read in conjunction with the Mineral Reserve statement.

Table 3 Mineral Reserves by Class

By Class	Cut-off Grade (Mo%)	Quantity (Mt)	Mo Grade (Mo%)	Contained Metal (Mlb)
Proven	0.036	55.7	0.109	121.35
Proven	0.027	3.8	0.031	2.35
Total		59.5	0.104	123.70
Probable	0.036	134.5	0.086	231.08
Probable	0.027	21.2	0.031	13.13
Total		155.7	0.079	244.21
Total Proven & Probable		215.3	0.085	367.91

Notes:

Reserves calculated in accordance with CIM guidelines.
The metal price used for reserve calculation is US$12.51/lb Mo.
Metallurgical recovery is 90.6% for Mo.
Pit optimization parameters have changed from the time the resource estimate was completed. As a result, an additional 8.3 million tonnes grading 0.031% Mo of the economic reserves within optimized pit was available for the variable cut-off strategy (Note 5 below) making the reserve statement higher than the resource statement (see Tables 1 & 2)
Cut-off grades used were variable, 0.036% Mo and 0.027% Mo.
Mining recovery is estimated at 100% and dilution is nil.
The waste-to-ore ratio for the deposit is 0.75.

Mining

Mining will be conducted using two 18 m3-shovels, one 18 m3 loader, and up to fifteen 177-t haul trucks with related support equipment. Benches will be drilled on an 8 m by 8 m drill pattern. All blast holes will be sampled and assayed for molybdenum. The holes will be loaded and shot with a combination of ANFO and emulsion. Benches are 10 m in height and the blast hole drilling will be to a depth of 11.6 m, including sub-drill.

Assay analyses will provide grade control for ore. Haul distances will be shortened both by the proposed borrow material for starter dam construction and the proposed low grade stock pile location on the top of existing Patsy Dump. Low grade ore will be stock piled and processed during the last two years of the operation and higher grade ore will be sent to the mill.

The mining production schedule is presented in Table 4.

Table 4 Summarized Production Schedule

Processing

The proposed concentrator in the PFS is based on an annual resource throughput rate of 14.6 Mt, or 40,000 tpd at 92% plant availability, for the production of a molybdenum concentrate. The processing plant is expected to operate 24 hours/day, 365 days/year. Over the life of mine, the processing plant will produce an estimated 314,700 t of molybdenite concentrate grading 52% Mo. The molybdenum recovery is estimated at 90.6%, consistent with previous production on the property.

The proposed process design is based on historical testwork results, the results from a recent (2009) test program and utilizing plant data from the previous Kitsault concentrator operations with the exception that the crushing-grinding circuit has been revised to reflect current technologies using a primary crusher-SAG-ball mill configuration, which is comprised of the following unit processes:

Primary crushing using a gyratory crusher;
Grinding using a SAG--ball mill configuration with cyclones for size classification;
Rougher and scavenger flotation;
Four stages of cleaner flotation with three stages of regrinding;
Final molybdenum concentrate thickening, leaching for the removal of contaminants, and the filtering, drying and packaging of the final concentrate; and
Tailing will be deposited by gravity into an on-site TMF.

Capital Costs

Initial capital is estimated at $641 million, which includes $48 million for mobile mining equipment. Preproduction stripping costs of $15 million are reflected in the initial operating costs. Life of Mine sustaining mine capital was estimated to be $435 million, which is comprised mainly of mobile equipment and TMF embankment ongoing construction. All capital costs are [+/-30%] in the PFS estimate.

The capital costs for the mine, plant and tailing management facility are given in Table 5 below.

Table 5 Capital Cost Summary

Description	US$000
Direct Works
Overall Site	37,300
Mining	51,000
Crushing	24,000
Crushed Ore Storage and Reclaim	12,900
Process	106,200
Tailing Management Facility	122,200
Water Management	33,200
Site Services and Site Utilities (Mine Site)	4,500
Ancillary Buildings (Mine Site)	16,700
Plant Mobile Fleet	2,400
Temporary Services (Port Site)	13,400
Port Site Facilities	8,700
Subtotal	432,500
Indirects
Project Indirects	104,000
Owner's Costs	26,000
Contingencies	78,100
Subtotal	208,100
Total Capital Cost	640,600

Operating Costs

LOM unit cash operating costs are US$7.47/t milled and operating costs for the processing plant are estimated at $3.57/t milled (�25% accuracy). General and administrative costs have been estimated at $0.55/t milled. Mine Closure costs have been estimated as $0.28/t ore milled. The Life of Mine unit cash operating costs are also summarized in Table 6 below:

Table 6 Unit Cash operation costs (LOM average)

Description	Dollars $000s	US$/Tonnes Mined	US$/Tonnes Milled	US$/Recovered Lbs
Mining	657,107	1.63	3.05	1.79
Processing	768,406	1.91	3.57	2.09
G & A	118,825	0.30	0.55	0.32
Power Generation	3,421	0.01	0.02	0.01
Tailings mgmt	61,085	0.15	0.28	0.17
Totals	1,608,844	4.00	7.47	4.38

Project Economics

The PFS economic results utilized assumptions summarized in the Table 7 below:

Table 7 Financial Analysis Parameters

Parameters	Inputs
General Assumptions
Mine Life	15 years
Available mill operating days per year	365 days/y
Production Rate (average)	40,000tpd
Process Recovery	90.6%
Molybdenum Concentrate	320,301t
Market
Discount Rate	8%
Base Case LOM average molybdenum price	$15.88/lb
Royalty
Amax Zinc (Newfoundland) Ltd Net profits Interest	9.22%
Alcoa Royalty	1.0%

The PFS economic model for the base case assumes a LOM average molybdenum price of $15.88/lb for revenue purposes.

The after-tax NPV at an 8% discount rate over the estimated mine life is $551 million. The after-tax IRR is 20.6%. Payback of the initial capital investment is estimated to occur during the fourth production year.

Sensitivity

Sensitivity analysis for key economic parameters is shown in Table 8. This analysis suggests that the project is most sensitive to commodity prices followed by operating cost. The Project is least sensitive to capital costs.

Table 8 Base Case Sensitivity to Pre-Tax NPV (US$ Millions) at 8% Discount Rate

	-30%	-20%	-10%	Base Case	10%	20%	30%
Moly Price	108	378	648	919	1,189	1,460	1,730
Exchange Rate	2,003	1,551	1,200	919	689	497	335
Moly Head Grade	163	415	667	919	1,171	1,423	1,675
Operating Cost	1,154	1,076	997	919	840	762	684
Capital Cost	1,101	1,040	979	919	858	798	737

Development Timetable

Avanti is currently working toward completion of a formal bankable feasibility study by Q4, 2010. This study will largely involve, pit optimization, additional field investigations and metallurgical testwork to support the feasibility study, and also include a roaster trade off study and bi-product (lead-silver) recovery metallurgical work.

It is expected that the bankable feasibility work will progress over the next twelve months in conjunction with permitting, marketing and financing activities so Avanti can have a rapid transition to construction and be in production by Q3 2013 to take advantage of the expected global economic recovery and the resulting demand for commodities.

The NI 43-101 Preliminary Feasibility Study, Avanti Mining Inc., Kitsault Molybdenum Property, British Columbia, Canada was prepared by industry consultants, all of whom are independent of Avanti Mining Inc. and are QP's under National Instrument 43-101. The QP's have reviewed and approved this news release. The consultants (QP's) with their responsibilities are as follows:

SRK Consulting (U.S.) Inc. (SRK US) under the direction of Mr. Jeffrey Volk (P.Geo.) for all matters relating to the mineral resource estimate.

SRK US under the direction of Mr. Michael Levy (P.E., P.G.) for matters relating to the pit slopes.

SRK Consulting (Canada) Inc. (SRK Canada) under the direction of Mr. Peter Healey (P.Eng) for matters and costs relating to mine closure and reclamation.

SRK Canada under the direction of Mr. Stephen Day (P.Geo.) for matters relating to metal leaching and acid rock drainage.

Wardrop under the direction of Mr. Miloje Vicentijevic (P.Eng.) for matters and costs relating to mineral reserve statements, mining, mining capital, mine operating costs, and financial analysis.

Wardrop under the direction of Mr. Andre de Ruijter (P.Eng.) for matters relating to the metallurgical testing review, mineral processing, and process operating costs.

Wardrop under the direction of Mr. Frank Grills (P.Eng.) for matters relating to the overall report coordination, process capital cost estimate and associated infrastructure.

Resource Development Inc. (RDi) under the direction of Mr. Deepak Malhotra (P.Eng.) for matters relating to metallurgical testing in 2009.

Knight Pi�sold Ltd. (KP) under the direction of Mr. Ken Brouwer (P.Eng.) for matters and costs relating to plant site geotechnical conditions, surface water diversions (including the diversion tunnel), tailing embankments, tailing access roads, tailing/reclaim pipeworks, and the run-of-river hydroelectric power plant.

Rescan Environmental Services Ltd. (Rescan) under the direction of Mr. Rolf Schmitt (P.Geo.) for matters and costs relating to environmental assessment, which involved qualified professionals conducting investigations on the property from October 2008 through November of 2009.

Avanti Mining Inc. is focused on the development of the past producing Kitsault molybdenum mine located north of Prince Rupert in British Columbia.

For further information, please visit www.avantimining.com, or phone 303-565-5491 to contact:

Craig J. Nelsen, Chief Executive Officer
A J Ali, Chief Financial Officer

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements: This news release contains certain forward-looking information concerning the business of Avanti Mining Inc. (the "Corporation"). All statements, other than statements of historical fact, included herein including, without limitation; anticipated dates for receipt of permits and approvals, construction and production, and other milestones; anticipated results of drilling programs, feasibility studies and other analyses; estimated timing and amounts of future expenditures, and the Corporation's future production, operating and capital costs, operating or financial performance, are forward-looking statements. These forward-looking statements are based on the opinions of management at the date the statements are made and are based on assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Corporation's expectations include fluctuations in commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies and native groups in the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the Corporation's Annual Information Form dated July 2, 2009, which is available at www. Sedar.com. The Corporation is under no obligation to update forward-looking statements if circumstances or management's opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

You can also view this News Release on our website at:
http://www.avantimining.com/s/NewsReleases.asp?ReportID=372253

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