MONTREAL, QUEBEC--(Marketwire - Aug. 4, 2011) - MDN Inc. ("MDN") (News - Market indicators) is pleased to release its interim financial report for the second quarter ended June 30, 2011. The management discussion and analysis and the interim financial report can be found on the Corporation's website (www.mdn-mines.com) and on SEDAR (www.sedar.com).
Effective January 1, 2011, International Financial Reporting Standards ("IFRS") replaced Canadian GAAP for publicly accountable enterprises. As a result, MDN began reporting under IFRS for interim and annual periods as of January 1, 2011, with comparative information for 2010 restated under IFRS.
The Tulawaka mine in Tanzania produced 21,517 ounces of gold in the second quarter of 2011, up 66% from 12,926 ounces in the second quarter of 2010. Underground mine performance was strong throughout the quarter, resulting in higher production from the underground mine and an improved head grade. The production increase was achieved through investments made in 2010 to improve the overall efficiency of the underground mine operation.
For the second quarter of 2011, the Tulawaka mine generated total revenues of US $34.0 million. Cash costs per ounce sold were lower in the second quarter of 2011 than in the same period of 2010 (US $645/ounce compared to US $759/ounce). The Tulawaka mine continues to generate operating income, yielding a total of US $10.5 million in the second quarter of 2011.
MDN received US $1.2 million in royalties, its share (30%) of cash available for distribution from the mine production.
In 2010, the two participants in the Tulawaka mine agreed to conduct extensive exploration and development to extend the mine life. This program is still underway and continuing to generate good results, pointing to a possible extension of the mine life beyond 2013.
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MDN INC.
SUMMARY OF OPERATING RESULTS
For the three months ended June 30 |
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2011 |
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2010 |
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| (In thousands of dollars, except per share amounts) |
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| Revenues net of financial charges |
$ |
1,272 |
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$ |
142 |
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| Administrative expenses |
$ |
1,069 |
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$ |
1,070 |
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| Net loss attributable to the shareholders of the Corporation |
$ |
(154 |
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$ |
(1,467 |
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| Basic and fully diluted net loss per share |
$ |
(0.003 |
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$ |
(0.015 |
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| Weighted average number of shares outstanding (in thousands) |
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99,976 |
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97,126 |
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At June 30, 2011, the Corporation's cash position, consisting of cash, investments and term deposits, stood at $6.3 million, down from $8.3 million as at March 31, 2011, primarily due to investments in exploration in Tanzania and development expenses incurred at the Crevier project.
Exploration
Drilling on the Ikungu property was the main exploration activity in the second quarter of 2011 in Tanzania.
Drilling was suspended in early May due to contractor technical difficulties, and resumed on June 14 with a new contractor. A total of 351 metres of diamond drilling have been completed since. Holes were drilled to test the most favourable sections of the Ikungu mineralized structure and reduce the spacing between the mineralized blocks intercepted during earlier MDN drilling programs. This will lead to greater confidence in the continuity of the mineralization.
In Quebec, MDN acquired 175 claims covering 98 km2 southeast of the Crevier niobium-tantalum project in June. This new acquisition means that MDN now controls the ground covering a geophysical response similar to the one associated with the Niobec niobium mine. The magnetic signature lies 23 km southeast of the Crevier deposit and 130 km northwest of the Niobec mine.
Field reconnaissance work will be carried out during the year to confirm the presence of a carbonatite and its possible metal content. This work will also enable the Corporation to check whether the Crevier system and this circular anomaly are related by the dike, as suggested by the presence of a lineament.
Crevier Project Development
The feasibility study that started in March 2010 is still progressing. However, a delay in the preparation and execution of pilot plant testing has caused a postponement in the preparation of the overall feasibility study, and the study is now scheduled for completion by the end of fiscal 2011. The Crevier niobium-tantalum project remains one of the most advanced projects in development in the world for those metals. His excellent location favours his development. The direction of MDN has a strong confidence in the success of the project's development, and is currently seeking a strategic partner.
In the second quarter, the processing pilot test results performed during the first quarter were analysed and complementary works were added to the initial program to optimize recovery and the quantity of reagents needed to process the ore. The final report on pilot plant testing, in preparation by SGS Lakefield, will be available once the additional work has been completed.
Processing pilot plant testing produced an enriched niobium/tantalum concentrate to be used for further hydrometallurgy process development work. The work plan was designed by SGS Lakefield, a proposal is now under review and work will begin in the third quarter. This program will allow this part of the mineral processing circuit to be completed and refinery design and cost evaluation to begin.
About MDN
MDN Inc. (News - Market indicators) is a mining exploration and development corporation with sufficient financial resources to develop its projects in Quebec and Tanzania. The Corporation is also 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 also owns a 72.5% interest in Crevier Minerals, which owns an NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Quebec. MDN has an option to increase its equity participation in Crevier Minerals 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% interest) and Pangea Goldfields Inc. (70% interest), an indirect, wholly-owned subsidiary of African Barrick Gold plc, the project operator and owner through its subsidiary Pangea Minerals Ltd. Disclosure 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 Corporation expects to occur are forward-looking statements. Although the Corporation 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 Corporation'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 Corporation'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 Corporation 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.