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Re: News Release - Wednesday, October 24, 2007
Tournigan Announces Exploration Property Resource Changes,
Restatement Of Financials And Other Updates
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Vancouver, October 24, 2007 - Tournigan Gold Corporation (TVC:TSX-V;
TGP:Frankfurt) announced today that it expects changes before year end
for resource estimates at two mineral properties, including a
reduction for the Kuriskova uranium deposit in Slovakia and an increase
for the Curraghinalt gold deposit in Northern Ireland.
Tournigan also announced that it expects to restate its previously
issued financial statements and Management's Discussion and Analysis to
correct non-cash errors related to the measurement, recognition and
presentation of stock-based compensation. In addition, Tournigan
provided progress reports on other mineral projects, including the
Kremnica gold project and the Novoveska Huta uranium project, both in
Slovakia, and several U.S. exploration projects.
Tournigan commented that its cash, amounting to approximately $31
million as at September 30, 2007, is securely invested in demand
deposits with two major Canadian Schedule 1 banks and is not affected
by the recent liquidity crisis involving asset-backed commercial paper.
Kuriskova update
Tournigan has engaged its independent consultant A.C.A. Howe of
Berkhamsted, England, to revise the inferred resource estimate for the
Kuriskova uranium deposit. The revised estimate, scheduled for
completion by the end of 2007, will incorporate an improved geological
understanding of the deposit and will address modeling issues
identified in an independent audit of the current resource estimate
established by A.C.A. Howe in May 2007. Such an independent audit is a
necessary prerequisite to a decision to commission a pre-feasibility or
feasibility study.
Tournigan expects that the revision will reduce by approximately 10% to
30% the current Kuriskova inferred resource estimate of 50.5 million
pounds uranium oxide (U3O8) contained in 9 million tonnes of material
with a grade of 0.255% U3O8. Tournigan cautions that the size of the
reduction remains subject to change pending the completion of the
revised estimate by
A.C.A. Howe.
"Even though we are unable to precisely estimate the size of the
reduction until the revised estimate is completed, we are confident
that Kuriskova remains a world class uranium deposit," said James
Walchuck, Tournigan's President and Chief Executive Officer. "The
revision may disappoint investors in the short run, but it is an
important step that will clear the way for a more accurate assessment
of the property's development prospects."
The revised estimate will include historical drilling completed prior
to the acquisition of the property by Tournigan in 2005 as well as the
drilling carried out in 2005 and 2006. However, to produce a timely
result, the revised estimate will not incorporate 6,225 metres of
infill drilling at 20 diamond drill holes conducted to date in 2007.
These drill results, and the results of six more drill holes (totaling
approximately 3,600 metres) on the property, expected to be completed
by mid-November, will be incorporated into another resource estimate
scheduled for early 2008.
"Radiometric readings indicate that the majority of the initial 20
holes drilled this year have intersected uranium mineralization," said
Joseph Ringwald, Vice President Technical Services for Tournigan. "On
this basis, we expect that the 2007 drilling program will likely have a
favourable impact on the early 2008 resource estimate when compared
with the upcoming revised technical report. In addition we are
optimistic that a portion of the deposit in the early 2008 estimate
will be upgraded to the indicated resource classification from the
inferred resource classification."
Curraghinalt update
The new Curraghinalt resource will compare with a January 2005 inferred
resource of 262,000 ounces contained in 527,700 tonnes of material with
a grade of 15.45 grams of gold per tonne. Based on preliminary
information, Tournigan expects that the new estimate will include an
indicated resource classification as well as an inferred resource
classification, with an increase in the total ounces of gold.
Micon International Ltd. of Toronto is preparing the new estimate as
part of a technical report on the Curraghinalt deposit. The new report
will take into account results from 20 new drill holes, totaling 4,139
metres, completed since the January 2005 estimate.
Tournigan expects to disclose the Micon technical report by the end of
November 2007. The January 2005 estimate for Curraghinalt took into
account 26 holes totaling 4,391 metres. That report was prepared by
Tournigan's independent consultant John Tully of North Vancouver, who
passed away in 2006.
Financial restatement
The financial restatement involves the periods from September 1, 2004
to May 31, 2007 and is expected to result in a net increase of $2.9
million in the reported loss over this period. This consists of an
increase of $4.3 million in non-cash costs for stock-based
compensation, partially offset by the capitalization of $1.4 million to
exploration properties. All amounts are subject to audit by Tournigan's
external auditors.
The decision to restate arose from management's review of applicable
accounting principles relating to stock-based compensation and a
detailed examination of Tournigan's stock option history. As a result,
Tournigan has concluded that the financial statements for the periods
from September 1, 2003 to May 31, 2007 should no longer be relied upon
in this respect. Tournigan intends to file its restated financial
statements and MD&A by mid-December along with its fiscal 2007 results.
Tournigan's review of its accounting for stock-based compensation has
produced the following preliminary findings, subject to audit and
review by its external auditors, with regard to non-cash measurement
and recognition errors:
1. Tournigan used the news release date as the grant date for
accounting purposes for certain stock option grants. For accounting
purposes, the initial measurement date should have been the later of
the date of authorization by Tournigan's Board of Directors or, for
employees, the date of inception of service.
2. Tournigan treated all stock options as granted to employees when in
fact certain stock options were granted to non-employees. Employee
stock options are measured at their fair value on the grant date and
recognized over the vesting period. Tournigan's non-employee stock
options should have been measured at their fair value upon vesting and,
prior to vesting, should have been recognized based on the service
provided to the reporting date and then-current fair values. In
addition, non-employee stock options should have been valued using
their contractual term to expiry rather than their expected term.
3. The vesting periods for certain stock option grants were incorrectly
reflected in the financial statements such that the recognition of the
costs of stock-based compensation should have been in earlier periods.
4. Certain stock option cancellations were incorrectly reflected in the
financial statements.
The effect of the above items is expected to increase the non-cash
costs of stock-based compensation by approximately $500,000 for the
nine months ended May 31, 2007 and by approximately $3,500,000,
$200,000 and $100,000 for the fiscal years ended August 31, 2006, 2005
and 2004, respectively.
Tournigan has also determined that a portion of its non-cash
stock-based compensation costs relating to exploration employees and
consultants should have been included in capitalized exploration
property costs rather than presented as period expenses. This change in
accounting presentation, after giving effect to the recognition and
measurement errors described above, is expected to capitalize
stock-based compensation costs in the amounts of approximately $250,000
for the nine months ended May 31, 2007 and approximately $1,000,000,
$50,000 and $100,000 for the fiscal years ended August 31, 2006, 2005
and 2004, respectively.
Other Slovakia property updates
For the Kremnica gold project in Slovakia, before the end of 2008
Tournigan expects to be in a position to decide whether to commission a
feasibility study. Since May 2007, to prepare for the decision,
Tournigan has commenced base line data gathering for environmental
purposes and has completed more than 50% of the 62 drill holes designed
to gather information about the property. The drilling is in support of
a groundwater monitoring program, the detailed open pit design and the
siting of the tailings facility and the processing plant.
As previously disclosed, Beacon Hill Consultants (1988) Ltd., of
Vancouver completed a pre-feasibility study of Kremnica in May 2007.
The study's base case indicates that the project could recover 674,500
ounces of gold with an internal after tax rate of return (IRR) of
approximately 13%, assuming a gold price of US$525 and silver price of
US$9.25 per ounce. The pre-feasibility study also indicated an IRR of
26% assuming a gold price of US$675. The spot price of gold was US$759
on October 23, 2007. Tournigan is progressing with its efforts to
optimize the project's economics.
For the Novoveska Huta uranium deposit, Tournigan expects to complete
an initial resource estimate based on National Instrument 43-101
standards during 2008. The timing remains subject to the successful
completion of a 9-hole, 3,900-metre diamond drilling program intended
to twin historical information. Tournigan has completed five holes
(2,500 metres) so far in 2007 with the remainder scheduled for
completion before year end. No chemical assays have been received to
date, but gamma logs confirm the presence of mineralization in all of
the completed twinning holes.
Tournigan acquired the licenses for Novoveska Huta in 2005. The
property, once a producing mine with open pit and underground
operations, was shut down in the early 1990's due to low uranium prices
and the collapse of the former socialist economy. The previous owner
completed underground development exceeding 5,500 metres on 5 vertical
levels. Tournigan has not yet appointed a consultant for the proposed
2008 resource study.
During 2007 Tournigan completed a 16,000 line kilometer airborne
radiometric survey of all if its uranium properties in Slovakia. In
addition to highlighting known anomalies, the survey has identified new
targets that require follow-up, including targets at Kuriskova and
Novoveska Huta.
U.S. property updates
In Wyoming, between August 2007 and October 2007 Tournigan completed a
uranium exploration program consisting of 50 rotary mud drill holes
totaling 6,414 metres on a group of claims in the Cyclone Rim area of
the Western Great Divide Basin. So far, results have been analyzed for
44 of the holes and uranium mineralization was encountered in 15.
Tournigan now plans drilling to twin the mineralized holes for core
analysis, with results expected in late 2007 or early 2008.
On another group of claims also in Wyoming's Cyclone Rim, Tournigan
expects to begin shortly a 71-hole, 17,313-metre rotary mud drill hole
program. This drill program is intended to test for additional
uranium mineralization along the 14 km roll front trend contained in
these claims.
In Arizona, where Tournigan is exploring for uranium, earlier this year
the company encountered technical problems while using rotary air/foam
drilling to locate breccia pipe geological structures. Tournigan is
converting the program to diamond drilling and is currently sourcing
drilling contractors. The current plan is to drill certain high
priority breccia pipe targets as soon as a contractor is ready.
In South Dakota, Tournigan has acquired and is reviewing historical
uranium exploration data, including results of 900 holes drilled by
others. Tournigan's plan for South Dakota will depend on the analysis
of the data.
The properties in Wyoming, Arizona and South Dakota consist of more
than 53,000 acres of federal lode mining claims. As disclosed on
October 12, 2007, Tournigan has entered into an agreement to acquire a
100% interest in these claims from Sweetwater River Resources LLC. The
transaction is expected to close by the end of 2007.
In Nevada, where gold is the target, Tournigan earlier this year
completed 18 reverse circulation drill holes totaling 2,168 metres in
initial exploration of two areas of mineral claims. Results are still
being assessed. Tournigan has an option to earn a 51% to 70% interest
in the Nevada exploration properties under an agreement, announced in
June 2006, with AuEx Ventures Inc. (TSX-V: XAU) of Reno, Nevada.
Joseph Ringwald, PEng, Tournigan's Vice President Technical Services
and a Qualified Person as defined by National Instrument 43-101, has
reviewed and approved the technical disclosure contained in this news
release.
About Tournigan
Tournigan has built a portfolio of highly prospective uranium and gold
properties in both Europe and North America. Tournigan is a Mineral
Resource company with a focus to develop its best projects. Tournigan
has obtained licenses in countries that are economically and
politically stable, have good infrastructure, and a well-educated
population.
On behalf of the Board of Directors of
TOURNIGAN GOLD CORPORATION
"James Walchuck"
James Walchuck, President and CEO
Forward-looking statements
Certain of the statements made herein, including any information as to
Tournigan's future financial or operating performance, may be
forward-looking and subject to important risk factors and
uncertainties, many of which are beyond Tournigan's ability to control
or predict. When used in this document, the words "could", "intend",
"anticipate", "estimate", "expect" as they relate to Tournigan or its
management, are intended to identify forward-looking statements or
information. Forward-looking statements are necessarily based on a
number of estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking
statements. Such factors include, among others: gold and uranium price
volatility; impact of any hedging activities, between actual and
estimated reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government
legislation, taxation, controls, regulations and political or economic
developments in Canada, Slovakia or the United States or other
countries in which Tournigan does or may carry on business in the
future; risks of sovereign investment; the speculative nature of gold
and uranium exploration and development, including the risks of
obtaining necessary licenses and permits; dilution; competition; loss
of key employees; additional funding requirements; and defective title
to mineral claims or property. In addition, there are risks and hazards
associated with the business of gold and uranium exploration,
development and mining, including the accuracy of resource and reserve
estimates (including with respect to size, grade and recoverability)
and the geological, operational and price assumptions on which these
are based), 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), as well as the factors described or
referred to in reports filed by Tournigan with the Canadian securities
administrators. Accordingly, readers should not place undue reliance on
forward-looking statements. Tournigan undertakes no obligation to
update publicly or release any revisions to forward-looking statements
to reflect events or circumstances after the date of this document or
to reflect the occurrence of unanticipated events.
CAUTIONARY NOTES TO US INVESTORS CONCERNING RESERVE AND RESOURCE
ESTIMATES
Measured and Indicated Resources
This management discussion and analysis uses the terms "measured and
indicated resources". The Company advises US investors that while these
terms are recognized and required by Canadian regulations, the SEC does
not recognize them. US investors are cautioned not to assume that any
part or all of mineral deposits in these categories will ever be
converted into reserves. Mineral resources that are not "mineral
reserves" do not have demonstrated economic viability. Disclosure of
"contained ounces" is permitted under Canadian regulations; however,
the SEC normally only permits the reporting of non-reserve
mineralization as in-place tonnage and grade.
Inferred Resources
This management discussion and analysis uses the term "inferred
resources". The Company advises US investors that while this term is
recognized and required by Canadian regulations, the SEC does not
recognize it. "Inferred resources" have a great amount of uncertainty
as to their existence, and great uncertainty as to their economic and
legal feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not
form the basis of feasibility or pre-feasibility studies, except in
rare cases. US investors are cautioned not to assume that any part or
all of an inferred resource exists or is economically or legally
mineable.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
For further information please contact:
James Walchuck, CEO at +1 (604) 683-8320, or visit www.tournigan.com
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Copyright (c) 2007 TOURNIGAN GOLD CORPORATION (TSXV-TVC) All rights
reserved. For more information visit our website at
http://www.tournigan.com/ or send mailto:info@tournigan.com
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