MONTREAL, QUEBEC--(Marketwire - March 23, 2012) - MDN Inc. ("MDN") (News - Market indicators) is pleased to release its audited financial statements for the financial year ended December 31, 2011. The management discussion and analysis and audited financial statements will be found on the Company's website (www.mdn-mines.com) and on SEDAR Monday March 26 (www.sedar.com).
Total gold production for the Tulawaka mine in Tanzania was 84,101 ounces in 2011, up 40% from the previous year due to a higher grade of ore from the underground mine and ore feed from the western extension of the west pit, which kept the mill running at full capacity.
In 2011, underground exploration led to the renewal of most of the mineral reserves mined (95%) and a significant increase (20%) in the mineral resource, suggesting the possibility of a longer mine life. African Barrick Gold plc is the mine operator.
In 2011, the Tulawaka mine generated total revenues of US $131.4 million, and production and development costs were US $ 98 million. The Tulawaka mine continues to generate operating profits, which amounted to US $33.4 million in 2011.
For 2011, MDN is reporting revenues of $ 6.5 million compared to $ 134 thousand in 2010. Revenues consisted of the Tulawaka royalty of US $6.17 million and interest income on the Company's various investments. Consequently, the Company posted net earnings of $1.6 million in 2011, compared to a net loss of $3.4 million in 2010.
Serge Bureau, President and Chief Executive Officer of MDN, said that: "In 2011, the Tulawaka royalty set MDN apart from many junior mining companies, enabling us to generate a net profit of US $ 1.6 million despite expenditures of $ 3.5 million. Our investments in our exploration and development properties continue to demonstrate their potential. The Company enjoys a healthy balance sheet, with no debt and a working capital of $10.44 million as at the end of 2011."
SUMMARY OF OPERATING RESULTS
| MDN Financial Highlights |
|
|
|
| Year ended December 31 |
2011 |
2010 |
|
| (In thousands of dollars, except per share amounts) |
|
|
|
| |
|
|
|
| Revenues |
6,330 |
(76 |
) |
| Administrative expenses |
3,521 |
3,957 |
|
| Net profit (loss) |
1,611 |
(3,442 |
) |
| Basic and fully diluted net gain (loss) per share |
0.016 |
(0.035 |
) |
| |
|
|
|
| Weighted average number of shares outstanding (in thousands) |
99,681 |
97,495 |
|
Summary of Results for the Tulawaka Gold Mine (100%)1
| Year ended December 31 |
2011 |
2010 |
| |
|
|
| Gold production (oz) |
84,101 |
60,134 |
| Gold sales (oz) |
83,450 |
63,909 |
| Average selling price / oz (US $) |
1,575 |
1,227 |
| Total revenues (millions of US $) |
131,4 |
79.2 |
| Production costs / oz (US $) |
727 |
709 |
| Net profit (millions of US $) |
33.4 |
11.9 |
Exploration in Tanzania
Throughout 2011, MDN pursued its exploration program in Tanzania on the properties it controls in the vicinity of Tulawaka and on its Ikungu property north of Mwanza. On Ikungu, drilling confirmed more than 4 km of strike extension of the gold structure, as well as the presence of four higher-grade gold mineralized lenses. A first exploration program was carried out in 2011 on the Nikonga property, strategically located only 40 km from Tulawaka. Surface sampling established the presence of high-grade gold zones, and the Diamond drilling that commenced in early 2012 has confirmed the continuity of these structures.
In Quebec, two properties strategically located in Plan Nord territory
In Quebec, exploration work continued on McGold, confirming the westward extension of the mineralized zones. MDN also acquired 175 claims to the southeast of the Crevier niobium-tantalum project. This new acquisition means that MDN now controls the ground that covers Crevier's southeastern extension, which contains a geophysical anomaly similar to the one, associated with the Niobec niobium mine.
Crevier Project Development
Since the filing of the Preliminary Economic Assessment for the Crevier project in January 2010, all our efforts have been devoted to preparing the project feasibility study. In 2011, the results obtained from pilot plant flotation testing showed a variable recovery rate and higher reagent consumption than anticipated. These parameters are crucial to process control and need to be better defined. We therefore decided to proceed with a second set of tests to improve our control over these metallurgical parameters. The new tests will be done this summer, and provided they are successful, the feasibility study should be filed in late 2012.
Part of the hydrometallurgy test work needed to develop the niobium and tantalum oxide recovery circuit was carried out in the first quarter of 2012 and proved very successful.
We remain convinced that the Crevier project is one of the niobium-tantalum projects with the best chance of being developed in the coming years. In 2011, MDN increased its stake in the Crevier project to 72.5%, confirming its continued interest in developing the project. Our partner Iamgold owns 27.5%. The development of the Crevier project needs the support of a strategic partner and discussions are underway.
About MDN
MDN Inc. (News - Market indicators) is a mining exploration and development company exploring and developing projects in Quebec and Tanzania. The company is also active in the search for new business opportunities that can increase shareholder value. As well as holding a 30% participating interest in the Tulawaka gold mine, MDN has also discovered gold in Tanzania at the Ikungu property, where four high-grade gold zones have been identified. MDN Inc. also owns a 72.5% interest in Crevier Minerals Inc., which owns an NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Quebec. MDN has an option to increase its interest in Crevier Minerals Inc. to 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 Other than statements of historical fact. all statements in this release that address events or developments that the Company expects to occur are forward-looking statements. Although the Company believes that 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 as such. the forward-looking statements in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.
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