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Message: NR results...49% increase Tanzania...plus $1.2m royalty
MDN Inc.: Tulawaka had a 49% Increase in Gold Production During the First Half of the Year
MDN receives royalties of $1.2 million
Jul. 26, 2011 (Marketwire) --
MONTREAL, QUEBEC -- (Marketwire) -- 07/26/11 -- MDN Inc. ("MDN") (TSX:MDN) reports to its shareholders that African Barrick Gold plc (ABG), the project operator at the Tulawaka gold mine in Tanzania, in which MDN has a 30% participating interest, announced second quarter and first half operational results.
-- The underground mining performance was consistently strong throughout the first half leading to significantly higher grades and production; -- The mine life at Tulawaka has been extended to the middle of 2012 and the drill programme in recent months has identified further extensions to the resource base as we look to keep the mine in production into 2013 and beyond; -- A detailed update of the resource and mine life at Tulawaka is planned before the end of the year.
Gold production at Tulawaka (100 %) for the first half was 41,131 ounces, an increase of 49% compared to the same period last year. The increase in production was driven by higher grade underground zones being mined, as well as a greater proportion of the ore milled in the process plant coming from underground compared to the previous year. For the first half 2011, cash costs per ounce of US$ 686 were slightly higher compared to the same period last year (US$ 641/ounce).
Capital expenditures for the six month period ended 30 June 2011 of $9.3 million was 70% higher than the prior year period of $5.5 million. The capital expenditure was focused on increased investment in order to extend the mine life. Specific spending included $2.9 million relating to capitalised underground development costs, $2.8 million relating to security infrastructure, in particular the perimeter wall, and $1.7 million relating to capitalised drilling expenditure.
Serge Bureau, CEO of MDN commented: "The economic outlook of the Tulawaka mine is improving as a result of the investment made in the underground mine since mid year last year. We are very satisfied by the mine development and its extended future potential".
Three months ended Six months ended Tulawaka (reflected as 100 %) 30 June 30 June --------------------------------------------- 2011 2010 2011 2010 --------------------------------------------------------------------------- Underground ore tonnes hoisted Kt 43 24 86 51 Ore milled Kt 106 123 216 241 Head grade g/t 6.7 3.5 6.3 3.8 Mill recovery % 95.0% 92.9% 94.3% 93.3% Ounces produced oz 21,517 12,926 41,131 27,517 Ounces sold oz 22,500 11,936 40,850 29,050 Cash cost/ounces sold $/oz 645 759 686 641 Cash cost per tonne milled $/t 138 74 130 77 Capital expenditure $('000) 5,384 5,450 9,279 5,450
East Zone Underground Extensions
At Tulawaka East Zone Underground, exploration drilling continued to extend the known high-grade mineralised shoots below current reserves, indicating potential to extend mine life beyond 2012. A total of 62 diamond core holes for 9,675 metres have been drilled to test the Tulawaka East Zone underground extensions between 10 Level and 15 Level (100m to 200m below completed pit floor). A second underground drill rig was commissioned in the first half of 2011 in order to complete the current programme and complete an update of resources and reserves and a new life of mine plan. Drilling to date shows the mineralised quartz veins extend at least down to Level 12, and has intersected visible gold within quartz veining in several drill holes. A selection of the better intersections returned during the period from the 62-hole underground exploration drill programme include:
-- TUGD00305 - 1.5m @ 14.7g/t Au from 103.5m -- TUGD00306 - 3.0m @ 5.62g/t Au from 105m -- TUGD00310 - 1.0m @ 7.30g/t Au from 67m -- TUGD00315 - 1.6m @ 7.81g/t Au from 74.4m -- TUGD00317 - 3.2m @ 23.6g/t Au from 64.85m -- TUGD00322 - 2.5m @ 11.3g/t Au from 71.0m
Diamond drilling continues to test depth, plunge and strike extensions to the mineralised lodes 10 and 12 Levels below current reserves throughout the East Zone and is currently focused on increasing reserves and resources for the mid-year update. Further information with respect to the potential mine life extension at Tulawaka will be released once an updated model and reserve optimisation is completed later in the second half of the year.
The samples were analyzed by fire assay at the Tulawaka Mine Laboratory and SGS Laboratory of Mwanza, Tanzania, which both are certified according to international standards. Supervision of the drill program and of the quality analysis verification program are done by ABG Tulawaka Mine Geologists. Marc Boisvert, geological engineer, Vice President, Exploration, and a qualified person under National Instrument 43-101 has reviewed the technical and scientific information in this news release.
The Tulawaka project is a contractual joint-venture between MDN (30% participating interest) and Pangea Goldfields Inc. (70% participating interest), a wholly owned indirect subsidiary of African Barrick Gold plc and project operator and owner through its subsidiary Pangea Minerals Ltd. The information disclosed on the Tulawaka Gold Mine is based on information provided by the Operator.
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