Ore production expected to begin within the next month
Completed drilling of 61 holes totalling more than 67,000 feet by the
end of October as surface diamond drilling program continues on
Kerr-Addison and McGarry properties
Further assay results to be announced shortly
TORONTO, Nov. 24, 2011 /CNW/ - Armistice Resources Corp. (TSX: AZ),
which expects to begin gold ore production within the next month from
its McGarry Mine in the Kirkland Lake area of northeastern Ontario,
today issued an update report on its operations.
"We are pleased to provide this update on the significant progress that
we have been making in our pre-production activities at our McGarry
gold mine," reported Todd J. Morgan, President and Chief Executive
Officer. "While we were carrying out our recently completed equity
financing, we were constrained from issuing progress reports.
Accordingly, this update covers the progress that we have made during
Ore Production to Begin Within the Next month
"We expect to begin gold ore production shortly, based on the progress
that we are making in the McGarry Mine. This will be an exciting
milestone for us and positions us to begin gold sales in the first
quarter of 2012.
"During October, we retained Soutex Inc., a consulting firm respected
globally for its expertise in metallurgy, to assist Armistice in
identifying the best facility to meet our custom milling requirements,"
said Mr. Morgan.
"Our initial target production rate is 25,000 ounces of gold per year in
2012, increasing to a rate of 40,000 ounces in 2013 at cash costs of
$600 to $650 per ounce produced," he said.
Additional Operating Highlights
Following are some of the highlights of the pre-production progress at
the McGarry Mine made during August, September, and October.
While finding experienced people remains challenging as the result of
the high level of activity in Canada's mining industry, the company has
been successful in its recruitment efforts. By the end of October, the
company's employment totalled 57 people. Hiring is continuing in
As Armistice is poised to begin production, the company is strengthening
its management team. The company is pleased to announce the hiring of
Michael Nemcsok as Manager of Engineering. Mike comes with a solid
background in mine planning and maintenance. He will take the leading
role in all mine planning activities.
Armistice has been successful in significantly accelerating the rate of
its advances on the five underground headings that it has been working
in the McGarry Mine.
The company relocated the underground repair shop to a temporary
location to allow the Alimak raise climber to drive an ore pass from
the 2250 to 2050 Level. This raise is currently nearing completion and
excavation is progressing well for a new shop location.
Four LHD scooptrams (one one-yard and three two-yard scoops) now are on
site for use in the mine. A second one-yard unit will be acquired in
November for the initial drifting on 2050 Level.
The company now is employing two underground diamond drills for stope
definition. The second drill became operational within the past month
and a third drill is on standby. Armistice used the first of the drills
during October in the 1050W-325N area for stope definition of the gold
ore-bearing zones that were encountered in late 2008 and 2009. From
August through October, the company completed drilling of 11 holes for
The active headings include a waste drift at the west end of the mine
that will be used for stope definition diamond drilling; a ramp that
will provide access for silling the first stopes as initially defined
by drilling in late 2009 in the 325N Zone; east and west waste drifts
from the 600W cross-cut that, when completed, will provide 1,000 feet
of strike access for detailed diamond drilling along the prospective
geology; access drifts for Alimak Raise Climber set ups; and one Alimak
Drilling Programs Continues; Planning Increased Activity for 2012
"Our surface diamond drilling program on the Kerr-Addison and McGarry
properties is ongoing," said Erik Andersen, P.Eng., Vice-President and
Chief Operating Officer. "When we last issued a progress report, which
covered our activities through the end of July, we had drilled a total
of 22 holes for a total of about 30,000 feet.
"Through the end of October, we now have nearly tripled that to a total
of 61 holes totaling more than 67,000 feet. This includes 44 holes for
50,870 feet on the Kerr-Addison property and 17 holes for 16,921 feet
on the McGarry property. We have previously disclosed the assay results
of the first 16 holes drilled and expect to announce shortly the
findings on holes 17-22," Mr. Andersen said.
"These exploration activities are part of the $2.5 million surface
diamond-drilling program that we have been carrying out in 2011 on the
Kerr-Addison and McGarry properties. The program is ongoing and we
currently have both of the operating surface diamond drills working on
the Kerr-Addison site. With the recently completed financing, we are
planning an expanded exploration program for 2012, both from the
surface of the Kerr-Addison and McGarry properties as well as
underground at the McGarry Mine," Mr. Andersen reported.
Recent Financing Raises $14.1million
As previously announced on October 31, 2011, Armistice completed an
equity offering for total gross proceeds of $14.1 million. The proceeds
of the offering, together with the approximately $3 million of cash
that Armistice had on hand at the end of the fiscal 2012 first quarter
on September 30, 2011, provided the company with adequate funding to
become a debt-free company, bring the McGarry Mine project into
production, and to significantly increase the company's exploration
programs on the McGarry and Kerr-Addison properties through
calendar2012. The termination of the company's Gold Supply Agreement
will be very beneficial to Armistice's cash flow as Armistice begins
selling gold in 2012.
"The success of this offering accomplished a number of very positive
things for Armistice that we believe will create significant immediate
and longer-term value for our shareholders," Mr. Morgan said.
"In a very difficult economic environment for raising capital, we were
able to secure sufficient funds to start-up production at the McGarry
Mine, fund our operations through 2012 while we ramp up operating cash
flow, significantly expand our drilling programs both on the surface of
our properties and underground in the McGarry Mine, and maximize the
company's leverage to rising gold prices with the termination of the
Senior Secured Gold Stream Debt Facility and the Gold Supply
Agreement," said Mr. Morgan.
Annual and Special Meeting of Shareholders
The company's Annual and Special Meeting of Shareholders will take place
on Thursday, December 15, 2011 at 4:00 p.m. at 333 Bay Street, Suite
2400, Toronto. For investors unable to attend in person, the meeting
will be webcast and shareholders are invited to submit in advance
questions that they would like to have asked at the meeting. Those
questions should be forwarded to the company's investor relations at Wertheim@wertheim.ca. More details concerning the webcast will be announced approximately
one week prior to the meeting.
Erik Andersen, P.Eng., 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.
About Armistice Resources Corp.
Armistice Resources, a Canadian-based exploration and development
company, expects to begin ore production in the 2011 fourth quarter
from its McGarry gold mine in the Kirkland Lake area of northeastern
Ontario. The McGarry Mine is located in Virginiatown on the prolific
Larder Lake-Cadillac Break that extends 200 km east-west straddling the
Ontario and Quebec border and that has produced 95 million ounces of
gold. The McGarry Mine is adjacent to the Kerr-Addison Gold Mine that
has produced more than 11 million ounces of gold. Armistice has signed
a definitive five-year option agreement for the purchase of up to 100
percent of the mineral rights on the Kerr-Addison property. The McGarry
Mine consists of 33 contiguous patented mining claims, including three
licenses of occupation, totaling 484 hectares. The McGarry Mine is
fully permitted and all equipment and systems at the site have been
brought up to standards, including its installed mining plant.
Armistice Resources is listed on the Toronto Stock Exchange (Symbol:
AZ) and currently has 184,960,971 common shares issued and outstanding.
To find out more about Armistice Resources, please visit the company's
website at www.armistice.ca.
This news release contains forward-looking statements, including current
expectations on the timing of the commencement of production and the
rate of production, if commenced. These forward-looking statements
entail various risks and uncertainties that could cause actual results
to differ materially from those reflected in these forward-looking
statements. Such statements are based on current expectations, are
subject to a number of uncertainties and risks, and actual results may
differ materially from those contained in such statements. These
uncertainties and risks include, but are not limited to, the strength
of the Canadian economy; the price of gold; operational, funding, and
liquidity risks; the degree to which mineral resource estimates are
reflective of actual mineral resources; the degree to which a
pre-feasibility study gives sufficient grounds for classifying the
indicated mineral resources as probable reserves; and the degree to
which factors which would make a mineral deposit commercially viable
are present; the risks and hazards associated with underground
operations. Risks and uncertainties about Armistice Resources' business
are more fully discussed in the company's disclosure materials,
including its annual information form and MD&A, filed with the
securities regulatory authorities in Canada and available at
www.sedar.com and readers are urged to read these materials. Armistice
Resources assumes no obligation to update any forward-looking statement
or to update the reasons why actual results could differ from such
statements unless required by law.
SOURCE Armistice Resources Corp.
For further information:
President, CEO and Chairman
Todd J. Morgan
Armistice Resources Corp.
Investor and Media Relations
Richard W. Wertheim
Wertheim + Company Inc.
416-594-1600 ext. 223