GlobeStar Reports Audited 2008 Results and Updates on Operations and Exploration
(All dollar amounts are expressed in United States currency unless otherwise stated.)
Toronto, Ontario April 8, 2009 - GlobeStar Mining Corporation ("GlobeStar") (TSX:GMI) today has set forth key highlights of its audited annual financial results for the 2008 fiscal year and provided an update on operations and exploration at its 100% owned Cerro de Maim�n copper-gold-silver mine and related facilities (the "Cerro de Maim�n Mine") located in the Dominican Republic. Copies of GlobeStar�s 2008 financial statements, management discussion and analysis and its annual information form (collectively the "Annual Filings") are available on GlobeStar�s website www.globestarmining.com and at www.sedar.com.
GlobeStar will hold a conference call at 9:00 a.m. (EDT) on Tuesday April 14, 2009 to discuss these results; call-in details are included at the end of this release. A short presentation will be made during the conference call and the presentation slides will be available on the investor relations tab of GlobeStar�s website on Monday April 13, 2009.
2008 Highlights
- Cash and accounts receivable totalled $6.0 million as at December 31, 2008.
- Copper concentrate inventories were approximately 1,907 tonnes at the commencement of commercial production on January 1, 2009, containing approximately 1.2 million pounds of copper, 220 ounces of gold and 21,300 ounces of silver.
- Capitalized construction and development costs at the Cerro de Maim�n Mine as reported in the project spending report for the senior debt facility totalled $70.4 million, before value added taxes, as at December 31, 2008. Accordingly, the Cerro de Maim�n Mine was constructed on time and on budget.
- Sulphide ore reserves totalled 4.8 million tonnes grading 2.5% copper, 0.96 grams of gold per tonne and 34.8 grams of silver per tonne at year end 2008, basically unchanged from December 31, 2007, after processing approximately 107,000 tonnes of sulphide ore grading approximately 4.1% copper, 1.35 grams of gold per tonne and 79.4 grams of silver per tonne.
First Quarter 2009 Highlights
- The sulphide plant processed approximately 103,000 tonnes of ore during the first quarter of 2009 grading 4.3% copper while producing approximately 12,500 tonnes of copper concentrate containing approximately 8.6 million pounds of copper, 1,700 ounces of gold and 190,000 ounces of silver.
- Recent geologic interpretations of the Cerro de Maim�n orebody indicate that there is an undrilled area adjacent to the north-west end of the open pit which may host an extension of the Cerro de Maim�n deposit. Trenching and geophysical programs have commenced over the prospective area and a drilling program will be initiated next week to evaluate this new target.
2008 Audited Financial Statements
GlobeStar�s 2008 audited financial statements reflect the fact that from the completion of construction of the Cerro de Maim�n Mine in the third quarter of 2008 until commercial production was achieved on January 1, 2009 GlobeStar was in a pre-commercial production phase. Consequently, GlobeStar continued to capitalize all costs directly attributable to the Cerro de Maim�n Mine during this period, including commissioning and pre-production operating costs. In addition, proceeds from the sale of metals produced during the pre-commercial production period were recorded as a reduction in pre-production operating costs, rather than as revenues.
As a result of the commencement of commercial production in January 2009, the financial statements for the first quarter of 2009 will reflect the revenues and operating costs associated with all production since January 1, 2009.
Capital costs related to completing the construction of the Cerro de Maim�n Mine are included in the mineral property expenditures disclosed in the Annual Filings. For additional clarity, the capitalized construction and development costs at the Cerro de Maim�n Mine as reported in the project spending report for the senior debt facility totalled $70.4 million, before value added taxes, as at December 31, 2008.
The sale of 7,700 tonnes of copper concentrate during 2008 provided proceeds of $7.7 million and resulted in GlobeStar having cash and accounts receivable of $6.0 million at December 31, 2008. Copper concentrate inventories were approximately 1,907 tonnes on January 1, 2009, however, the value of all finished and in-process inventories will begin to be reflected in the first quarter financial statements for the period ended March 31, 2009.
Ore Reserves and Exploration
The estimated sulphide mineral reserves at the Cerro de Maim�n Mine as at December 31, 2008 are shown in the following table and remain virtually unchanged from December 31, 2007 after processing approximately 107,000 tonnes of sulphide ore grading approximately 4.1% copper, 1.35 grams of gold per tonne and 79.4 grams of silver per tonne during 2008.
Sulphide Mineral Reserves
| |
TONNES |
COPPER (%) |
GOLD (g/t) |
SILVER (g/t) |
| Note: g/t = grams per tonne |
| Proven |
4,273,034 |
2.67 |
0.97 |
35.7 |
| Probable |
537,155 |
1.40 |
0.85 |
28.3 |
| Total |
4,810,189 |
2.53 |
0.96 |
34.8 |
The estimated oxide mineral reserves at the Cerro de Maim�n Mine as at December 31, 2008 are shown in the following table and are very similar to the reserves as at December 31, 2007 after processing a minor amount of oxide ore during 2008.
Oxide Mineral Reserves
| |
TONNES |
GOLD (g/t) |
SILVER (g/t) |
| Note: g/t = grams per tonne |
| Proven |
796,194 |
1.80 |
32.9 |
| Probable |
197,568 |
1.22 |
20.1 |
| Stockpile |
182,934 |
2.25 |
46.5 |
| Total |
1,176,696 |
1.77 |
32.9 |
During the first quarter of 2009 the open pit at the Cerro de Maim�n Mine has become wider and deeper creating significantly more rock exposure and revealing structural folds and faults associated with the orebody that were not evident in the drill core alone. Consequently, the most recent geologic interpretation of the Cerro de Maim�n orebody indicates that there is an undrilled area adjacent to the north-west end of the open pit which may host an extension of the Cerro de Maim�n deposit. Trenching and geophysical programs are underway and a drilling program will start next week to evaluate this new target.
First Quarter 2009 Production
The sulphide mill has been running at its design capacity with 95% availability throughout the first quarter of 2009 while processing approximately 103,000 tonnes of ore grading 4.3% copper. First quarter 2009 production was approximately 12,500 tonnes of copper concentrate containing approximately 8.6 million pounds of copper, 1,700 ounces of gold and 190,000 ounces of silver.
The oxide plant has not yet reached full production because of higher than expected clay content in the oxide ore and elevated levels of soluble copper in the oxide circuit. Changes to the oxide plant should resolve the clay issue during the second quarter of 2009 and investigations are underway concerning the various alternatives for reducing the higher copper levels.
During the first quarter of 2009 the oxide plant processed approximately 34,000 tonnes of ore grading 1.33 grams of gold per tonne and 65.0 grams of silver per tonne, resulting in the production of approximately 1,200 ounces of gold and 25,100 ounces of silver in precipitate and dor�.
First Quarter 2009 Production
Production history to date for the sulphide plant indicates that estimated copper production for 2009 remains at approximately 29 million pounds as reported earlier in the first quarter of 2009. However, higher-than-expected gold and silver levels in the copper concentrate have resulted in a revised 2009 forecast of approximately 8,000 ounces of gold and 715,000 ounces of silver in concentrate versus approximately 7,300 ounces of gold and 368,000 ounces of silver as previously disclosed in January 2009.
The 2009 production forecast for the oxide plant has been revised due to delays in reaching full capacity as previously described, with a revised estimated production for 2009 of approximately 8,600 ounces of gold and 180,000 ounces of silver versus the previously disclosed estimated production of approximately 14,000 ounces of gold and 280,000 ounces of silver.
Conference Call Details
GlobeStar will host a conference call on Tuesday April 14, 2009 at 9:00 a.m. (EDT) to discuss these results. The conference call may be accessed by dialing 1-866-440-8926 in North America or 1-416-343-2651 internationally. Please dial in conference ID number 8482151. The archived conference call can be accessed until Wednesday April 22, 2009 by following the instructions in the investor relations tab on GlobeStar�s website..
A short presentation will be made during the conference call and the presentation slides will be available in the investor relations tab of GlobeStar�s website www.globestarmining.com on Monday April 13, 2009.
About GlobeStar
GlobeStar Mining Corporation is a Canadian based mining and exploration company producing copper, gold and silver at its Cerro de Maim�n Mine in the Dominican Republic. GlobeStar maintains a listing on the Toronto Stock Exchange (symbol: GMI).
A.E. Olson, M AusIMM, GlobeStar�s Senior Vice President and COO and a Qualified Person as defined under Canadian National Instrument 43-101, supervised the preparation of and verified the technical information contained in this release.
Cautionary Statements Concerning Forward-Looking Statements
This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to as ��forward-looking statements��). Forward-looking statements include, but are not limited to, possible events, statements with respect to possible events, the timing of the completion of remaining construction activities, including the water retention pond and all other facilities, the ability and timing to reach full production at the oxide plant, the projections regarding the quantities and grades of material to be processed, copper, gold and silver production levels, fluctuations in commodity prices, the timing of shipments of copper concentrate, the ability to enter into sales contracts, there being no material disruptions regarding operations, fluctuations in currency markets, prices for key supplies, including diesel fuel, and costs relating to the completion of the remaining construction, exploration programs and ongoing operations. The words "plans," "expects," "is expected," "scheduled," "estimates," "forecasts," "projects," "intends," "anticipates," or "believes," or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur," and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable to GlobeStar as of the date of such statements are inherently subject to significant risks and uncertainties and may not be appropriate for use other than as used herein. These estimates and assumptions include, but are not limited to: (a) the costs associated with the drilling program at the Cerro de Maim�n Mine; (b) the accuracy of geologic interpretations and studies of the orebodies at the Cerro de Maim�n Mine; (c) the content of the orebody in respect of the Cerro de Maim�n Mine; (d) the ability of the sulphide plant to continue to operate at its design capacity; (e) the ability of GlobeStar to implement changes to the oxide plant in order to resolve issues relating to clay content and elevated copper levels; (f) certain assumptions relating to the market price for copper, gold and silver and the expected levels of supply and demand for copper, gold and silver; (g) there being no significant disruptions affecting operations at the Cerro de Maim�n Mine, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (h) production at the Cerro de Maim�n Mine being consistent with GlobeStar�s current expectations; and (i) the continued operation of the Cerro de Maim�n Mine. Because of these risks and uncertainties and, as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated, implied or indicated by these forward-looking statements. Although GlobeStar believes that the expectations reflected in its forward-looking statements are reasonable, we can give no assurances that the expectations of any forward-looking statements will prove to be correct. All of the forward-looking statements made in this news release are qualified by these cautionary statements, and those made in the "Risk Factors" section of our most recently filed Annual Information Form and our other filings with the securities regulators of Canada. These factors are not intended to represent a complete list of the factors that could affect GlobeStar. GlobeStar disclaims any intention, and assumes no obligation, to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise, or to explain any material difference between actual events and such forward-looking statements, except as required pursuant to applicable securities laws.
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