MONTREAL, QUEBEC--(Marketwire - March 23, 2011) - MDN Inc. ("MDN")(News - Market indicators) announces that its financial statements for the year ended December 31, 2010 have been published. Management's discussion and analysis and the audited financial statements can be found on the Company's website (www.mdn-mines.com) and on SEDAR (www.sedar.com).
The 2010 total gold production at the Tulawaka mine, located in Tanzania, was 60,134 ounces, a 36% decrease as compared to 2009 due to underground equipment shortages resulting in lower ore tonnes hoisted and low-grade stockpiles processed in order to feed the mill. This issue has now been resolved by the operator, African Barrick Gold plc, through refurbished equipment and the transfer of a hauling truck from one of its other properties in Tanzania. The Tulawaka mine generated US$79, 2 million in total revenue in 2010 with production and development costs totalling US$67.3 million. The mine continued to generate operating profits which totalled US$11.9 million in 2010.
Major investments were necessary to accelerate and extend the underground works at the Tulawaka mine, at a depth of up to the 9th level (215 meters below surface). Therefore, all available net profits attributable to MDN's interest in the mine were reinvested in 2010 and no royalties from the mine were recorded in the financial statements. In 2010, MDN recorded revenues of $195,097 generated essentially from interest income on investments, whereas the 2009 revenues of $7,109,664 resulted from royalties received by MDN. Consequently, the company reported a net loss of $ 3.3 million in 2010 compared to a net gain of $ 0.8 million in 2009.
In 2010, underground exploration succeeded in renewing most of the reserves mined during the year and added significantly to the mineral resource below the 7th level (185 meters below surface).
Serge Bureau, President and CEO of MDN said: "During 2010, the operator of the mine focused primarily on exploration activities and definition drilling aimed at extending the mine life. In 2011, efforts will continue to be directed at developing resources at depth. We are taking advantage of a very favourable gold market environment to invest in the development of the Tulawaka mine in order to increase the value of this gold asset. Moreover, the Company has a solid financial situation with no debt and $10.7 million in cash and cash equivalents at the end of 2010."
| SUMMARY OF OPERATING RESULTS |
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Summary of Results for the Tulawaka Gold Mine (100%)(1)
For the year ended December 31 |
2010 |
2009 |
| |
|
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| Gold production (oz) |
60,134 |
94,180 |
| Gold sales (oz) |
63,909 |
93,355 |
| Average selling price / oz (US $) |
1,227 |
966 |
| Total revenues (millions of US $) |
79.2 |
90.2 |
| Production costs/ oz (US $) |
709 |
407 |
| Operating profit (millions of US$) |
11.9 |
34,3 |
| MDN financial highlights |
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| For the year ended December 31 |
2010 |
|
2009 |
| (In thousands of dollars, except per share amounts) |
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| Revenues |
195 |
|
7,110 |
| Administrative expenses |
4,014 |
|
4,091 |
| Foreign exchange loss (gain) |
193 |
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363 |
| Net gain (loss) |
(3,320 |
) |
824 |
| Basic and fully diluted net gain (loss) per share |
(0.033 |
) |
0.009 |
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Weighted average number of shares outstanding
(in thousands) |
97,495 |
|
94,839 |
| (1) MDN's participating interest of 30% |
Exploration in Tanzania
MDN continued to explore in Tanzania throughout 2010, on the properties it controls around the Tulawaka mine as well as at Ikungu. In 2010, we completed two drilling programs on the Ikungu property in order to better define the potential of the mineralized structure. The results of this drilling program represent the discovery of a new gold sector for MDN. We plan to continue exploration work throughout the year 2011 and outline an initial gold resource in the area. MDN is also seeking strategic partners to accelerate the drilling programs in Tanzania.
Crevier Project Development
Following the completion of a Preliminary Economic Assessment for the Crevier project in January 2010, MDN increased its ownership in the project to 67.5%. The Company still shares the joint venture project with IAMGOLD Quebec which owns 32.5%. The feasibility study continues to demonstrate the project's strong economics and a 350 tonne bulk sample from the Crevier orebody is being processed and tested at SGS Lakefield's pilot plant. This pilot plant work will allow us to finalize the metallurgical tests and the design of the niobium and tantalum recovery circuit in order to complete the economic assessment for the project in the second semester of 2011.
Following the completion, in January 2011, of the second tranche of investment in exploration at the Crevier project for an amount of $2 million, the Company signified during the quarter to IAMGOLD their intention to exercise their option to acquire an additional 5% interest in Minéraux Crevier Inc. for an amount of $625,000 in exchange of MDN's treasury common shares. Following this investment, MDN's equity stake in the project is now 72.5% and IAMGOLD Quebec's share is now 27.5%
About MDN
MDN Inc. (News - Market indicators) is a mining exploration and development company with exploration and development projects in Québec 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 757 km2 in the vicinity of the Tulawaka mine. MDN Inc. also owns a 72.5% interest in Crevier Minerals Inc., a project with a NI 43-101 niobium-tantalum resources located 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.
The Tulawaka project is a contractual joint venture between MDN (30% participating interest) and Pangea Goldfields Inc. (70% participating interest), a wholly-owned, indirect subsidiary of African Barrick Gold plc, the project operator and owner through its subsidiary Pangea Minerals Ltd. Information published on the Tulawaka gold mine is based on information provided by the operator.
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.
