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Avanti Mining Inc. (TSX-V:AVT
- News)
("Avanti" or the "Company") reported a net loss of $4.9
million ($0.01 per share) for the year ended December 31, 2010 compared to a
net loss of $6.2 million ($0.04 per share) for the comparable period in 2009.
In addition the Company deferred $13.0 million (2009 - $5.7 million) relating
to the development costs of the Kitsault property.
The Company had a cash balance of $18.0 million on hand as at December 31,
2010.
HIGHLIGHTS:
- Increased
landholdings by 300% through purchase of mineral tenures contiguous to
the Kitsault project.
-
- Closed
public offering for $17 million in February 2010 to fund 2010
activities.
-
- Entered
into a debt advisory and arrangement agreement with West LB to arrange
the debt portion of the project financing necessary to construct the Kitsault Project.
-
- Enhanced
project development team by hiring Ken Collison,
formerly COO of Thompson Creek Metals, and Bob Jacko,
P. Eng, formerly with Teck-Cominco.
-
- Prevailed
in a court case against Kitsault Resorts Ltd
regarding confirmation of Avanti's Statutory Right of Way through the
town of Kitsault to Alice Arm, an inlet of the
Pacific Ocean.
-
- Signed
a life-of-mine (LOM) tolling agreement with Molymet
to process concentrate that will allow delivery of molybdenum oxide to
Avanti customers that would meet London Metal Exchange specifications.
-
- Entered
into letter of intent (LOI) with a large Asian steel producer for
selling up to 10% interest in the Kitsault
project plus an off-take sales agreement for up to 20% of total Kitsault's production for the first four years of
production.
-
- Entered
into strategic alliance with SeAH Holdings
Corp (SeAH), the largest specialty steel maker
in Korea that commenced with a private placement of $11 million that
occurred on December 30, 2010, and entered a LOI for the sale of up to
30% interest in the Kitsault project. However,
Avanti does not intend to sell more than a total of 30% of the Kitsault project to funds its development.
-
- Closed
a $4 million flow-through share issuance on Dec 30, 2010 to fund
exploration drilling in 2011.
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- Final
Feasibility completed by AMEC Americas shows increase of US$247 million
in the after tax NPV(8%) to US$794 million, using CPM Group's price
forecast ranging from US$13.75 to 18.25/lb over the mine life of 16
years. Total cash operating costs average US$5.47/lb molybdenum over LOM
but lower in first five years due to higher grades. Strip ratio is 0.77
to1 and initial capital expenditure is estimated at US$795 million. LOM
annual production averages 23.4 million lbs of molybdenum but averages
above 29 million lbs during the first five years.
-
- Initiated
the environmental assessment process with the British Columbia
Environmental Assessment office (BCEAO) and the Canadian Environmental
Assessment Agency (CEAA) working in cooperation with the Nisga'a Lisims Government. The first public meeting on the
draft Application Information Requirement (AIR) was held on March 15,
2011. When the public comment period ends on April 7th 2011
and the AIR is finalized and accepted, Avanti will be in a position to
file the formal Environmental Assessment (EA) Application.
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OUTLOOK AND PROPOSED ACTIVITIES FOR 2011
- Avanti
hopes to complete the financing needed to develop Kitsault
by finalizing the strategic partnership agreements for the sale of up to
30% of the asset to obtain its share of equity financing and arranging
the requisite loans through West LB.
-
- Engage
the EPCM contractor to complete basic and detailed engineering design as
well as construction bid packages through to award and procurement of
major equipment items.
-
- Submit
the Environmental Assessment Application and conclude the mandatory six
month review and public comment period resulting in the granting of an
Environmental Certificate.
-
- Begin
the "One Project - One Process" BC Permitting policy that
allows for synchronous permit application while the Environmental
Application is being reviewed. Hopefully, this will allow the approval
of permits to commence construction in early 2012.
-
- Complete
a 15,000 meter exploration drilling program at Kitsault
with a goal of converting approximately 34 million tonnes
of Inferred Resource currently treated as waste in the mine plan into
Probable reserves. This will lower the stripping ratio and the mining
cost and may allow for an increased production rate to 50,000 tpd.
-
- Complete
the metallurgical test work and mineral processing design for recovery
of by-product silver. Initial results obtained in the Feasibility
metallurgical program suggest that recoveries between 35 and 50% of
silver could reduce the US$5.47/lb Mo cash costs by $0.50 to $0.75/lb
depending on the silver recovery, processing and transportation cost and
silver price received.
-
- Complete
a conceptual study on increasing the mill processing rate from 40,000 tpd to 50,000 tpd and make
the decision to increase the annual throughput based upon the planned
exploration drilling program.
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- Complete
a 5,000 meter exploration drilling program at the high-grade Sunshine
zone of the Roundy Creek prospect with a goal of producing a NI 43-101
compliant resource statement by the end of 2011 on this very exciting
prospect.
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- Complete
an initial NI 43-101 compliant resource statement at the Bell Moly prospect from the 20% re-sampling of core
completed in 2010.
-
- Further
enhance the operating and administration team of Avanti through the
recruitment of key personal in anticipation of the 2012 construction
program.
-
Avanti is focused on the development of the past producing Kitsault molybdenum mine located north of Prince Rupert
in British Columbia. Kitsault has Proven and
Probable reserves of 232.5 million tonnes grading
0.081% Mo and containing 415.8 million pounds of molybdenum as outlined in
the Technical Report with an effective date of December 15, 2010 which is
available on the Company's website as well as at www.sedar.com.
Mr. Kenneth Collison, Senior Vice President of
Project Development for the Company and a Qualified Person as defined in NI
43-101, has reviewed and approved the scientific or technical information in
this press release.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements:
This news release contains certain forward-looking information concerning the
business of Avanti Mining Inc. (the "Corporation"). All statements,
other than statements of historical fact, included herein including, without
limitation; statements about the recoverability of molybdenum at the Kitsault property and other matters related to the
development of the Kitsault molybdenum mine, are
forward-looking statements. These forward-looking statements are based on the
opinions of management at the date the statements are made and are based on
assumptions and subject to a variety of risks and uncertainties and other
factors that could cause actual events to differ materially from those
projected in forward-looking statements. Important factors that could cause
actual results to differ materially from the Corporation's expectations
include fluctuations in commodity prices and currency exchange rates;
uncertainties relating to interpretation of drill results and the geology,
continuity and grade of mineral deposits; uncertainty of estimates of capital
and operating costs, recovery rates, production estimates and estimated
economic return; the need for cooperation of government agencies and native
groups in the exploration and development of properties and the issuance of
required permits; the need to obtain additional financing to develop
properties and uncertainty as to the availability and terms of future
financing; the possibility of delay in exploration or development programs or
in construction projects and uncertainty of meeting anticipated program
milestones; uncertainty as to timely availability of permits and other
governmental approvals; and other risks and uncertainties disclosed in the
Corporation's Annual Information Form for the year ended December 31, 2009,
which are available at www. Sedar.com. The Corporation is under no obligation
to update forward-looking statements if circumstances or management's opinions
should change, except as required by applicable securities laws. The reader
is cautioned not to place undue reliance on forward-looking statements.
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