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Rusoro Reports Record Gold Production and
Record Low Cash Costs for Q4 2008
Further Government Approvals Received - Rusoro Advances Environmental
Permit to Mine at Increible 6
January 14, 2009
Trading Symbol (TSX-V): RML
Vancouver, Canada - Rusoro Mining Ltd. (TSX-V:RML) ("Rusoro" or
the "Company") is pleased to report that it has reached record
quarterly gold production (38,868 ounces) in Q4 2008 and record low cash
costs (US$358 per ounce) for the same period at the Choco 10 operations
which the Company acquired as of November 30, 2007. In addition,
the Company is delighted to confirm that the Ministry of Basic Industries
and Mining (MIBAM) has approved the technical, financial, and
environmental study for the Company's Increible 6 Gold Project. This
approval is a further step in implementing the Company's strategy where
it expects to expand the Choco 10 operations by processing ore from the
Increible 6 deposit at the Choco 10 mill, which are 6 km away from each
other.
Rusoro's December monthly results cap a record quarter at the Company's
Choco 10 operations. December was the third consecutive month in
which the Choco 10 mill achieved record gold production at historically
low cash costs. The mill processes ore from the Company's Choco 10
and Isidora mines located near the town of El Callao in Bolivar State,
Venezuela. Recent
production highlights and related (unaudited) costs include:
- Record
Quarterly Operations in Q4 2008. In
Q4 2008, the Choco 10 mill produced 38,868 ounces of gold at a cost
of US$358 per ounce marking the best quarter in the history of the
Choco 10 mill. This also marks the first full quarter of
positive cash flow from operations at the Choco 10 mill.
- Record
December Monthly Production .
The Choco 10 mill produced 14,261 ounces of gold in December
2008. This marks the third consecutive month of record gold
production and can be attributed to high volumes of ore processed
from the Choco 10 mine which produced 9,234 ounces of gold with the
other 5,027 ounces of gold coming from ore processed from the
near-by Isidora gold mine.
- Record
December Monthly Cash Costs. Cash
costs at the Choco 10 mill were a record low for December at US$347
per ounce of gold. The vast improvement is the culmination of
a number of initiatives which include improvements made to the
haulage fleet availabilities, mill availabilities, modifications
made to the primary mine haulage contract and optimization of the
mine plan.
- Rusoro Advances Environmental Permit for Increible 6
Deposit. This is Rusoro's second
major mining related approval as the Company has now been approved
to move forward on its second new mining operation in less than a
year. Ore from the Company's Increible 6 deposit is expected
to be processed at the Choco 10 mill commencing in Q4 2009.
Rusoro's President, George Salamis noted,
"Our stated goal was to be cash positive at the Choco 10 mill in
2008 and to do that for the full quarter at year end is both exciting and
a tribute to Rusoro's operations team whose diligence has resulted in the
operations reaching these milestones. To have achieved these results is a
testament to the Company's ability to successfully consolidate gold
assets in Venezuela and successfully turn them around by increasing
efficiency and dealing with issues that plagued the operations under
previous management. We will continue with a number of initiatives
that are on-going and the Company believes that it can maintain and even
further reduce some operational cash costs at the mines."
Rusoro CEO, Andre Agapov stated, "We are delighted with both our
operational results and with the receipt of the Increible 6
approval. With the Choco 10 mill reaching these operational
milestones and our plan to bring the Increible 6 and San Rafael / El
Placer mines on-stream over the next year we intend to continue to
execute our production growth strategy to the benefit of our
shareholders."
Increible 6 Permits
The Company is pleased to report that MIBAM has approved the study on the
technical, financial, and environmental merits for the Company's
Increible 6 Gold Project. The approval for the Certificate of
Exploitation was published in Venezuela's Official Gazette on December
23, 2008. The Exploitation Certificate is expected by the Company
prior to January 23, 2009 at which time the application will be made for
the Permit to Affect Natural Resources. The permitting
process remains on track for production from Increible 6 in
2009. Rusoro's 100% owned Increible 6 gold mine is located 6
km from the Choco 10 mill. It is the Company's intention to process
ore from Increible 6 at the Choco mill commercially in mid to late 2009. The
Increible 6 mine is host to 1,587,000 ounces indicated (23.5 Mt @ 2.11g/t
Au) and 1,100,000 ounces inferred (17.5 Mt @ 1.95g/t Au) (see News
Release - Nov. 15, 2007), which Rusoro has advanced through discovery,
delineation and now development. Increible 6, along with Choco 10,
is currently the subject of a scoping study (PEA), looking at production
expansion alternatives for the future.
This marks the second time in the last year that Rusoro successfully
advanced the permitting process for a new mining operation. Rusoro
announced the receipt of its permit for the development of its 100% owned
SREP ore body in January 2008.
Q4 : Mining and Milling
Total ore processed at the Choco 10 mill in Q4 was 600,774 tonnes. The
total gold produced at the mill was 38,868 ounces during Q4. This
is a record amount of gold poured in any quarter at the Choco 10
mill. Of the 38,868 ounces produced for the quarter, 11,903 ounces
were produced from Isidora gold ore processed at the Choco 10 mill and
26,965 ounces came from the Choco 10 mine. Significant ore
development has now been completed at the Isidora mine which the Company
believes will allow it to sustain Isidora's current production levels
moving forward. Additionally, the Company will continue to optimize
efficiency and conduct exploration for the purpose of converting gold
resources to minable reserves at Isidora.
For Q4 2008, the operational cash costs (unaudited) at the Choco 10 mill
for the combined gold produced from the Choco 10 and Isidora mines was
US$358 per ounce.
Bid for Gold Reserve
Rusoro commenced a take-over bid (the "Bid") for 100% of the
shares of Gold Reserve Inc. ("Gold Reserve") on December 15,
2008. It offers Gold Reserve shareholders 3 Rusoro shares for each
Gold Reserve share held, and Gold Reserve shareholders are free to tender
their shares to the Bid at any time prior to the Bid expiry time of
midnight at the end of January 21, 2009.
Based on the closing price of Rusoro shares on January 13, 2009 on the
TSX Venture Exchange, the Bid on that date represented a value to Gold
Reserve shareholders of C$1.80 per Gold Reserve share.
On January 5, 2009, Rusoro issued a press release confirming, among other
things, that its technical consultants had worked diligently in preparing
the Bid. Rusoro is pleased to confirm that the involvement of its
technical consultants (Micon International and Scott Wilson Roscoe
Postle, the "Rusoro Technical Consultants") with the Bid was
limited to the provision of signed consent letters by the Qualified
Persons who prepared independent Technical Reports on behalf of Rusoro
under the requirements of National Instrument 43-101 of the Canadian
securities regulatory authorities and in connection with Rusoro's Offer and
Circular and Annual Information Form and the provision of consents
required by the U.S. Securities and Exchange Commission in connection
with Rusoro's Form F-10 registration statement. These consents are a matter of
public record and can be reviewed under the Gold Reserve public filing
record with both the Canadian and U.S. securities regulatory authorities
at www.SEDAR.com and www.sec.gov, respectively. Rusoro has not
requested any advice or information regarding Gold Reserve from the
Rusoro Technical Consultants and the Rusoro Technical Consultants have
not provided any advice or confidential information relating to Gold
Reserve to Rusoro, or vice versa.
Qualified Person: Mr. Gregory Smith, P.Geo, the
Vice-President Exploration of the Company, is the Qualified Person as
defined by National Instrument 43-101, and is responsible for the
accuracy of the scientific and technical aspects of this news release.
About Rusoro Mining
Rusoro is a junior gold producer with a large land position in the
prolific Bolivar State region of Venezuela. The Company operates
the Choco 10 and Isidora Mines, processing the ore through the Choco 10
mill facility near the town of El Callao. The Company produced over
100,000 ounces of gold in 2008 and is on schedule to have two additional
mines (Increible 6 and SREP) in production by Q4 2009 and Q1 2010,
respectively.
ON BEHALF OF THE BOARD
"George Salamis"
President
* * * * *
* * *
For further information, please contact:
George Salamis, President
Tel: +1 604 632 4044
Email: gsalamis@rusoro.com
Ross Gatensbury, Investor Relations
Tel: +1 604 632 4044
Email: gates@rusoro.com
Keith Schaefer, Vanguard Shareholder Solutions
Tel: +1 604 608 0824
Toll Free: 1 866 591 0825
www.rusoro.com
The TSX Venture
Exchange has not reviewed and does not take responsibility for the
adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This press release, the Take-Over Bid and Circular, including the
schedules attached therein, the pro forma consolidated financial
statements of the Company, and some of the material incorporated by
reference into the Circular, contain 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 possible events, statements with
respect to possible events, the proposed transaction, related litigation,
the business, operations and financial performance and condition of each
of Rusoro and Gold Reserve and the proposed combined company, the future
price of gold, the estimation of mineral reserves and resources, the
realization of mineral reserve and resource estimates, the timing and
amount of estimated future production, costs of production, expected
capital expenditures, costs and timing of the development of new
deposits, success of exploration, development and mining activities,
permitting time lines, currency fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims, and
limitations on insurance coverage. The words ''plans,''
''expects,'' ''is expected,'' ''scheduled,'' ''estimates,''
''forecasts,'' ''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 by Rusoro as
at the date of such statements, are inherently subject to significant
business, economic, social, political and competitive uncertainties and
contingencies and other factors that could cause actual results or events
to differ materially from those projected in the forward-looking
statements. The estimates and assumptions of Rusoro contained or
incorporated by reference in the Circular which may prove to be
incorrect, include, but are not limited to, (1) that Rusoro will be
successful in acquiring 100% of the outstanding Gold Reserve Equity, (2)
that all required third party regulatory and governmental approvals to
the Take-Over Bid will be obtained and all other conditions to completion
of the transactions will be satisfied or waived, (3) there being no
significant disruptions affecting operations, whether due to labour
disruptions, supply disruptions, power disruptions, damage to equipment
or otherwise; (4) permitting, development, expansion and power supply
proceeding on a basis consistent with Rusoro's current expectations; (5)
permitting and development proceeding on a basis consistent with Rusoro's
current expectations; (6) the exchange rate between the Canadian dollar,
the Venezuelan Bolivar and the U.S. dollar being approximately consistent
with current levels; (7) certain price assumptions for gold; (8) prices
for and availability of natural gas, fuel oil, electricity, parts and
equipment and other key supplies remaining consistent with current
levels; (9) production forecasts meeting expectations; (10) the accuracy
of Rusoro's current mineral reserve and mineral resource estimates; and
(11) labour and materials costs increasing on a basis consistent with
Rusoro's current expectations.
Known and unknown factors could cause actual results or events to differ
materially from those projected in the forward-looking statements.
Such factors include, but are not limited to, risks related to
litigation; fluctuations in the currency markets; fluctuations in the
spot and forward price of gold or certain other commodities (such as
diesel fuel and electricity); changes in interest rates; disruption to
the credit markets and delays in obtaining financing; inflationary
pressures; risks arising from holding derivative instruments (such as
credit risk, market liquidity risk and mark-to-market risk); changes in
national and local government legislation, taxation, controls,
regulations and political or economic developments in Canada, Venezuela
or other countries in which Rusoro does or may carry on business;
business opportunities that may be presented to, or pursued by Rusoro,
Rusoro's ability to successfully integrate acquisitions; operating or
technical difficulties in connection with mining or development
activities; actual results of exploration activities; the possibility of
cost overruns or unanticipated expenses; employee relations; the
speculative nature of gold exploration and development, including the
risks of obtaining and renewing necessary licenses and permits; the
impact of Venezuelan law on Rusoro's operations; diminishing quantities
or grades of reserves; adverse changes in our credit rating; contests
over title to properties, particularly title to undeveloped properties;
and the occurrence of natural disasters, hostilities, acts of war or
terrorism. In addition, there are risks and hazards associated with
the business of gold exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and gold bullion losses (and
the risk of inadequate insurance, or inability to obtain insurance, to
cover these risks). The following factors, amongst others, related
to the business combination of Rusoro and Gold Reserve could cause actual
results to differ materially from forward-looking statements, including
those contained in the Circular: the Rusoro shares issued in connection
with the Take-Over Bid may have a market value lower than expected; the
business of Rusoro and Gold Reserve may not be integrated successfully or
such integration may be more difficult, time-consuming or costly than
expected; and the expected combination benefits from the combination of
Rusoro and Gold Reserve may not be fully realized or not realized within
the expected time frame. All of the forward-looking statements made
in the Circular are qualified by these cautionary statements and those
made in the Circular itself. These factors are not intended to
represent a complete list of the factors that could affect Rusoro and the
combination of Rusoro and Gold Reserve. Additional factors are
noted elsewhere in the Circular and in the documents incorporated by
reference therein. Although Rusoro has attempted to identify
important factors that could cause actual results or events to differ
materially from those described in forward-looking statements, there may
be other factors that could cause results or events not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements. Accordingly, undue reliance should not be placed on
forward-looking statements. Rusoro undertakes no obligation to
update publicly or otherwise revise any forward-looking statements or the
foregoing list of assumptions or factors, whether as a result of new
information or future events or otherwise, except as may be required in
connection with a material change in the information disclosed in the
Circular or as otherwise required by law.
MORE INFORMATION AND WHERE TO FIND IT:
This press release does not constitute an offer to buy or an invitation
to sell, any of the securities of Rusoro or Gold Reserve. Such an offer
may only be made pursuant to a registration statement and prospectus
filed with the U.S. Securities and Exchange Commission (the
"SEC") and an offer to purchase and circular filed with
Canadian securities regulatory authorities. Rusoro has filed with
the SEC a Registration Statement on Form F-10, a Tender Offer Statement
on Schedule TO and other documents and information, and has mailed an
Offer and Circular (which is filed as an exhibit to the Registration
Statement and Tender Offer Statement) to Gold Reserve shareholders and
equity unitholders (collectively, the "Equityholders")
concerning the Offer and the proposed combination of Rusoro and Gold
Reserve. GOLD RESERVE EQUITYHOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT, THE TENDER OFFER STATEMENT AND OFFER AND CIRCULAR AND ANY
OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. Investors and Gold Reserve Equityholders
may obtain the documents free of charge at the SEC's website,
www.sec.gov. In addition, documents filed with the SEC by Rusoro are
available free of charge from Rusoro. You should direct requests for
documents to the Corporate Secretary, Rusoro Mining Ltd., Suite 2164,
1055 Dunsmuir Street, Vancouver, British Columbia V7X 1B1, telephone
(604) 632-4044.
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