Mr. David Reading reports
AUREUS MINING INC. - FINANCIAL RESULTS FOR Q2 2013 AND H1 2013 OPERATIONAL UPDATE
Aureus Mining Inc. has released its second quarter 2013
financial results for the three-month period ended June 30, 2013, and has provided
an operational update for the first half of 2013.
Construction continues at Aureus's 100-per-cent-owned New Liberty gold project in
Liberia with first
gold pour expected in fourth quarter 2014.
- Nedbank Capital and Rand Merchant Bank (RMB)
mandated to arrange a project debt finance
facility for New Liberty, as announced on March 20, 2013.
- The banks have completed a detailed due diligence review. Credit
committee approvals are expected mid-third quarter 2013.
Loan documentation is targeted for fourth quarter 2013 with the first drawdown
anticipated by year-end.
- Cash and cash equivalents as at June 30, 2013, were $53.9-million (U.S.).
Total assets as at June 30, 2013, were $152.3-million (U.S.).
Loss for the quarter was June 30, 2013, of $600,000 (U.S.).
- The company incurred $18.0-million (U.S.) of New Liberty capital cost estimate to date.
New Liberty gold project
- A definitive feasibility study (DFS) was announced on May 20, 2013:
- A robust NPV (net present value) of $230-million (U.S.) and IRR (internal rate of return) of 29 per cent at a flat gold price of
$1,400 (U.S.) per ounce;
Life-of-mine (LOM) operating cash cost to average $668 (U.S.) per ounce using
- Initial capital cost estimate of $136-million (U.S.) (excluding contingency
of $13.6-million (U.S.));
New Liberty to be the first commercial gold mine in Liberia and to produce an average of 119,000 ounces per year at 3.6 grams per tonne (g/t) for the first six
Plant commissioning and first gold pour scheduled for December, 2014;
National Instrument 43-101-compliant proven and probable reserve estimate of 924,000
ounces (8.5 million tonnes grading 3.4 g/t).
The New Liberty project DFS optimization process has been completed. A
number of changes have been outlined including relocation of the
tailings storage facility (TSF) and plant, now located south of the
pit. Waste rock dumps have been redesigned to wrap around the pit.
The process plant has been redesigned to incorporate additional
grinding and reduction in reagent consumption. The Marvoe Creek
diversion channel (MCDC) has accommodated a natural depression
minimizing excavation. The open-pit design now incorporates new
geotechnical data and latest operating costs. The outcome of this work
is that the project will be easier to operate than previously envisaged
with less environmental risk.
The ball mill order, the project's key long lead item, was placed in May,
2013, with delivery expected in May, 2014.
The construction phase commenced in December, 2012, and progressed
throughout the first half of 2013, specifically in respect of the early earthworks.
Bulk excavation has been completed at the MCDC and is progressing at
the plant site with the shaping of the plant access road and the
terracing for the primary and secondary crusher facilities.
The Kinjor village relocation is in progress and the new site has been
cleared and topsoil removed. The church and school buildings are
being built and brick making for housing construction is under way.
All key permits in place following receipt of environmental permit in
October, 2012, and the community development plan (CDP) approval in
- Completion of phased drilling campaigns at Weaju and Ndablama (both
within Aureus's 100-per-cent-owned Bea Mountain mining licence) and focused on
regional soil and stream sediment geochemical programs which cover
the whole licence portfolio of 546 square-kilometres; exploration work now stopped due to the onset of the rainy season.
- Weaju gold target:
Drilling to date has outlined three zones (Main, North and Creek Ridge)
of mineralization with a cumulative strike length of one kilometre. In
each zone, gold mineralization is focused within Westerly plunging
bodies which are traced from surface to shallow depths of 80 metres.
Over 9,000 metres of drilling (62 holes) has been completed in the first half of 2013
and the following high-grade shallow intercepts are highlighted:
10.0 g/t over 7.5 metres from 0.2 m;
9.1 g/t over six m from 47.3 m;
6.9 g/t over 8.7 m from surface;
- 6.6 g/t over nine m from 114.4 m;
5.6g/t over 14.0 m from 39.0 m;
4.6 g/t over 11.3 m from 13.9 m;
2.5 g/t over 19.0 m from 24.0 m;
- 3.7 g/t over 11.0 m from 36.0 m;
5.5 g/t over 6.6 m from 12.9 m;
3.8 g/t over nine m from 78.0 m.
- Mineralization is still open in all directions. At the Main zone soil
geochemistry and pitting have outlined a potential southwest extension of one
kilometre. Soil work and trenching also highlight a potential
westerly extension to the North zone and an easterly extension to the
Ridge and Creek zones. All zones are still open at depth. To date
only 50 per cent of the anomalous gold areas have been drill tested.
Ndablama gold target:
- A 2,330-metre 18-hole phase 3 drilling program highlighted multiple
shallow intercepts which included:
4.1 g/t over 43.0 m from 78.0 m;
4.3 g/t over 27.0 m from 70.0 m;
2.6 g/t over 18 m from 89 m;
2.5 g/t over 18 m from 52 m;
2.4 g/t over 17 m from 68.0 m;
2.3 g/t over 15.0 m from 83.0 m;
9.7 g/t over 14.0 m from 78.0 m;
- 5.5 g/t over 12.0 m from 51.0 m;
16.7 g/t over 11.0 m from 108.0 m;
2.2 g/t over 10 m from 66.0 m;
3.4 g/t over nine m from 67.0 m.
Current and historic drilling and trenching at Ndablama have outlined a
total of approximately one kilometre of continuous gold mineralization
in three north-trending zones which dip shallowly to the west.
Ndablama is located within a 13-kilometre belt of gold-in-soil anomalies
which straddles a granite-greenstone contact zone. Six gold targets
have been subject to follow up exploration programs and drilling has
intersected high-grade gold mineralization at three of these referred
to as Gondoja, Ndablama and Leopard Rock. To date less than 15 per cent of the
potential strike length has been drill tested.
Following the completion of the soil geochemistry programs covering
the complete licence portfolio, a generative study is in progress to
define additional target areas.
Batouri licence in Cameroon has been subjected to trenching and pitting
programs and results are pending.
Outlook -- key targets for the second half of 2013
- Bank financing -- seek bank credit committee approvals, complete loan
documentation in third quarter/fourth quarter 2013 with first drawdown of funds in late
fourth quarter 2013;
Complete the following New Liberty development milestones:
- Kinjor village relocation;
Commence the following development activities:
- Define new resources at Weaju and Ndablama;
Generative study to define new targets in Liberian licence portfolio.
Commenting on the results, David Reading, president and chief executive
officer of Aureus, said: "Aureus has made significant progress in the first half of 2013 despite
the economic downturn for gold companies. The completion of the
optimized DFS and the commencement of the construction phase at New
Liberty have ensured we are well on our way to achieving our strategic
goals for 2013, as well as smoothly and rapidly transitioning the
company from explorer to developer. Our discussions with the mandated
banks continue to be constructive, with detailed due diligence
concluded and the financing process for the completion of credit
approval nearing completion.
"Our successful exploration campaigns highlight the prospectivity and
long-term project pipeline across the wider licence area. At Weaju and
Ndablama we have achieved exciting high-grade, near-surface results
which bode well for future developments both in terms of satellite feed
for New Liberty and for a new stand-alone second gold project. In all
cases the geology of the mineralized systems is very similar and good
grades are a strong characteristic of these gold belts which underpins
the significant future opportunities within our sizable licence area.
"To have achieved so much in such a short period of time demonstrates
the commitment, endeavour and support the company receives from its
shareholders, board, management and employees. I would like to thank
everyone for their hard work and I look forward to Aureus becoming one
of West Africa's newest gold producers."
The financial statements and the accompanying management's discussion
and analysis for second quarter 2013 are available for review at the company's
website as well as on SEDAR and should be read in conjunction with this press release.
The estimates of mineral resources for the DFS were calculated in
accordance with NI 43-101 and carried out by Chris G. Arnold, BSc (honours),
MSc, MAusIMM (CP), of independent consultant AMC. The reserve study
for the DFS was prepared by M. Staples of AMC, a qualified person,
for the purposes of the study, under the standards set forth by
National Instrument 43-101 -- standards of disclosure for mineral
project -- of the Canadian securities administrators.
The company's qualified person responsible for preparing this release,
other than as detailed above in respect of the DFS, is Mr. Reading,
who holds an MSc in economic geology from University of Waterloo,
Canada, and is a fellow of the Institute of Materials, Minerals and
Mining. Mr. Reading is the president and chief executive officer of Aureus Mining and consents to the inclusion in the announcement of the matters based
on their information in the form and context in which it appears and
confirms that this information is accurate and not false or misleading.
We seek Safe Harbor.
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