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Armistice Resources Corp
Symbol C : AZ
Shares Issued 185,810,971
Close 2012-06-08 C$ 0.165
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Armistice Resources begins milling at McGarry

2012-06-11 10:51 ET - News Release

Mr. Todd Morgan reports


Armistice Resources Corp., which is carrying out mining operations at its McGarry gold mine in Ontario's Kirkland Lake area, has provided an update on its progress toward becoming Canada's newest gold producer.

"Mining and hoisting operations at the McGarry gold mine are proceeding well and, throughout May, we have been trucking to the mill," said Todd J. Morgan, president and chief executive officer.

On March 6, 2012, Armistice announced that it had signed a custom milling contract with SMC (Canada) Ltd. for processing at its McAlpine mill in Cobalt, Ont. The contract covers processing of the first 30,000 tons to be delivered from the McGarry gold mine.

"Haulage to the mill began on April 16 with an initial 3,000 tons shipped that month to the mill. In May, we shipped more than 5,000 more tons, and the total now is approaching 10,000 tons.

"As the mill had not been in operation prior to Armistice becoming its sole customer, there was a start-up period required. Milling commenced on May 2 and has continued smoothly since then. Our current plan is to begin gold sales in June or July. At that time, we will record our first operating revenue and cash flow," said Mr. Morgan.

The bulk of the shipments to the mill have been lower-grade material from historical underground work as well as recent development work. Shipping has now begun on higher-grade material from the stopes currently being worked. The preproduction material being shipped and processed is providing valuable information to establish cut-off grades and metallurgical parameters on a production scale not previously possible. This processing is very important in order to obtain this information even though the overall average grade of the first few months of processing will be significantly lower than production grade.

Other operating highlights

Following are some additional operating highlights of the progress at the McGarry mine.

Three stoping areas are in development in the 325W and 260W areas on the 2250 level. Sill drifting is partially complete, and raising to provide access for one or two lifts is in progress. The drilling of uppers to take down backs is in progress.

The 325N ramp on the 2250 level is being driven to provide access to the 400N zone, which is the next zone targeted for production after the 325N zone.

The Alimak escapeway raise from 2250 to the 2050 level is complete and the unit is now set up on the 2050 level to continue the system to the 1650 level. A final stage from the 1650 to 1250 levels will be required when the current stage is complete.

Ladders have been installed in an existing raise from the 1250 level to surface which now provides both ventilation and an escapeway from the upper half of the mine.

The hoisting system is now ready for double skipping, pending the completion of the grizzly expansion on the 2250 level which is expected to be complete in early July. An additional scooptram is expected to be delivered in June which, in combination with the grizzly expansion, will effectively double the hoisting capacity and reduce the double handling of ore and waste underground.

The company has temporarily paused exploration drilling on the Kerr-Addison property, pending completion of the analysis of drilling that has been completed to date. This analysis is needed, in part, to determine where further drilling should take place in 2012 when the exploration program resumes. The company is preparing a report on the drilling that has been done, and expects to complete it and release further results in June.

At the end of April, Armistice had 72 employees, with 70 of those being located at the mining site.

Qualified person

Erik Andersen, PEng, vice-president and chief operating officer of Armistice Resources, and a qualified person, as defined by National Instrument 43-101, has reviewed and approved this news release.

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