Adamus Resources Limited - Decision to Proceed based on Improved Economics



    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/
    

    PERTH, Western Australia, June 10 /CNW/ -

    
    Project Highlights

    -   Significantly improved project economics
    -   Key points are :
        -  Estimated US$100M cash generated from first 2 years operation
        -  Up to 1.9 million tonnes annual ore throughput
        -  100,000 ounces annual production
        -  10 year proven initial mine life
        -  US$343M Net Operating Cash generated pre CapEx (at US$900 gold
           price).
        -  $80-95M CapEx depending on contract EPCM or Fixed Price
        -  Year 1 and 2 Cash costs average US$408/oz
        -  Life-of-mine cash costs of US$489/oz

    The Directors of Adamus Resources Limited (ASX:ADU, Adamus) are pleased to
announce the Company's current optimised feasibility study on its Southern
Ashanti Gold Project (Project or SAGP). The results of the Optimised
Feasibility Study (OFS) demonstrate enhanced economics and support the board's
decision to proceed to mine.

    Current Project Economics
                                                        ---------------------
                                                               Gold Price
                                                        ---------------------
                                                           US$900   US$1,000
    -------------------------------------------------------------------------
    Net Operating Project Cashflow       (before CapEx
     Years 1 & 2                           recoupment    US$100 M   US$124 M
    Net Operating Project Cashflow           & tax)      US$343 M   US$431 M
    -------------------------------------------------------------------------
    Internal Rate of Return                (assuming         28 %       37 %
    Payback                               US$95 CapEx)  28 months  22 months
    -------------------------------------------------------------------------
    Construction & Commissioning Period                       20 months
    -------------------------------------------------------------------------
    Cash Cost Years 1 and 2                                     US$400
    Cash cost per Ounce LOM                                     US$489
    -------------------------------------------------------------------------
    Waste / Ore Ratio for LOM                                     4:1
    -------------------------------------------------------------------------
    Mill Feed Grade (g/t)                                         2.0
    -------------------------------------------------------------------------
    Note : The above projected economics are at the Project level, on a 100%
    project basis and exclude finance costs.
    

    Optimisation Study

    Market conditions have changed dramatically since the Company's last
announced Feasibility Study. The resource and reserve base has been increased
following exploration drilling conducted in 2008. Capital and operating costs
have similarly moved. The reserve increase along with further detailed
engineering studies have shown that an increase in milling throughput and a
redesign of the processing circuit can produce significant operating unit cost
reductions. In addition, revised testwork supported increased expected gold
recoveries.
    This OFS resets the economic expectations for the Project in line with
the improved parameters of the 1.07Moz gold ore reserve update announced in
April 2009. As part of the optimisation process costs were obtained for a
larger process plant, metallurgy was reviewed and updated and the planned open
pits were redesigned to accommodate the improved project economics.
    Annual ore to be processed by the planned facility has increased to 1.9
Mtpa, although this is still considered conservative. The OFS includes updated
estimates for capital as well as key operating costs, in particular
electricity.
    The OFS includes a detailed monthly mine plan and now includes the
Bokrobo deposit for the first time.
    The Update has been prepared by Adamus utilising information and
documentation it has generated and combined with the results of studies
undertaken by the following independent consultants :

    
                               SAGP Consultants

    -------------------------------------------------------------------------
                Activity                                Company
    -------------------------------------------------------------------------
    Resources Modelling                  Nic Johnson
                                         - Hellman and Schofield Pty Ltd
                                         (H&S)
    -------------------------------------------------------------------------
    Pit Optimisation, Pit Design,        Glenn Williamson and Clive Skelton
    Mining Schedule and Reserve          - Mining Resources Pty Ltd
    estimation
    -------------------------------------------------------------------------
    Metallurgical Testwork               Ammtec Pty Ltd
    -------------------------------------------------------------------------
    Tailings Geochemical Assessment      Graeme Campbell and Associates (GCA)
    -------------------------------------------------------------------------
    Metallurgical testwork assessment    Peter Banovich
    of results                           - Metallurgical Project Consultants
                                         Pty Ltd
    -------------------------------------------------------------------------
    Capital and Operating Cost           Lycopodium Engineering Pty Ltd
    Estimates, Mill Tender and           (Lycopodium)
    Schedule
    -------------------------------------------------------------------------
    Tailings Storage Facility            Knight Piesold Consulting (Ghana and
    re-estimate of Capital Costs         Australia) (Knight Piesold)
    -------------------------------------------------------------------------
    

    Plant Options

    Adamus has continued to assess proposals for design and construction of
the processing plant and a number of engineering firms have been in advanced
discussion with Adamus for this intended scope of work. Market conditions have
moved in our favour with engineering firms quoting more aggressively resulting
in positive changes to cost and schedule estimates as compared to the original
Feasibility Study.
    The current capital estimates cover the design and construction of the
process facility, together with onsite and offsite infrastructure
requirements, including power, water supply and support services. Owners'
costs include village resettlement, roads, mine pre-development and other
necessary infrastructure.
    Adamus has received design and construction proposals from engineering
companies on both an EPCM and a fixed price basis. The quoted total capital
expenditure estimates range between US$80M on an EPCM basis and approaching
US$95M on a fixed price basis.
    Engineering award will commence upon finance completion.

    
    Project Development Timeline

    -------------------------------------------------------------------------
                               PROGRESS TO DATE
    -------------------------------------------------------------------------
    Mining Licenses - Awarded                                           Done
    -------------------------------------------------------------------------
    Feasibility Study Update                                            Done
    -------------------------------------------------------------------------
    All Permitting & Environmental Assessment for Final Reviews         Done
    -------------------------------------------------------------------------
    EPA Public Forums                                                   Done
    -------------------------------------------------------------------------
    EIS Finalisation for Environmental License                          Done
    -------------------------------------------------------------------------
    EPA Environmental Permit - Awarded                                  Done
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                     CURRENT PROJECT DEVELOPMENT SCHEDULE
    -------------------------------------------------------------------------
    Final Government Approvals for Investment Stability
     Agreement                                                 1st Half 2009
    -------------------------------------------------------------------------
    Final Ministerial Approvals                                1st Half 2009
    -------------------------------------------------------------------------
    Financing                                                   3rd Qtr 2009
    -------------------------------------------------------------------------
    Production (estimated)                                        +18 months
                                                              from financing
    -------------------------------------------------------------------------
    

    Adamus has now initiated steps to assemble a strong owners' team to
manage Project development. Ghana has a well developed industrial base and all
services expected to be required during construction are available. The
Company expects to announce key specialist project and operating expertise
additions to its management team within the next few weeks.
    A broad activity schedule has been developed covering the various phases
of the projects design and construction.

    Decision to Proceed

    Based on the results from the OFS, the Directors of Adamus have resolved
to proceed with development of the SAGP, subject to receipt of project
financing on terms acceptable to the Company. The Company is currently in
advanced negotiations with a number of prospective debt and equity financiers
which it expects to finalise shortly.
    With all permits required for mining in place, and project financing
discussions nearing completion, the SAGP remains on track for first production
within 20 months of completing its project finance.

    Ore Reserve / Mineral Resource

    
    Free Milling Gold Ore Reserve Estimate

    83% Proven
                                  --------------------------------
                                    Tonnage      Grade  Contained
                                       (Mt)      (g/t)       (oz)
    -------------------------------------------------------------------------
    Proven Ore                        13.52       1.96    854,000        83%
    -------------------------------------------------------------------------
    Probable Ore                       3.02       2.21    214,000
    --------------------------------------------------------------
    Total                             16.54       2.01  1,068,000
    --------------------------------------------------------------

    Notes :
    1.  Mineral resource estimation calculated by Multiple Indicator Kriging
        methodologies as detailed in the Feasibility Study announcement dated
        14 June 2007 and Technical Reports dated 31 October 2007 and 21
        August 2008 (Study Reports). The Ore Reserve estimation has been
        prepared by Mining Resources Pty Ltd using cost estimates derived
        from third party contractor and consultant quotations and based on a
        gold price of US$900/oz. All metallurgical recoveries for
        conventional CIL and CIP circuits are based on testwork as previously
        detailed in the Study Reports.
    2.  For further details please refer to the announcement of 16 April
        2009.


    Growing Gold Mineral Resource Estimate

    85% Measured and Indicated
                                  --------------------------------
                                    Tonnage      Grade  Contained
                                       (Mt)      (g/t)       (oz)
    -------------------------------------------------------------------------
    Measured & Indicated               30.2       1.80  1,750,000        85%
    -------------------------------------------------------------------------
    Inferred                           6.98       1.62    362,000
    --------------------------------------------------------------

    Notes :
    1.  The Measured and Indicated mineral resource estimate is inclusive of
        current Ore Reserves.
    2.  Au cut-off grade 0.8g/t. For further details on the key assumptions,
        parameters and methods used to estimate the mineral resource, please
        refer to the Study Reports.


    Upside Exploration Potential

    The future profitability of the SAGP is expected to be enhanced
substantially by the identification of further mineable ore reserves within
trucking distance of the proposed mill site.
    The Company has identified the following as key areas / targets for
potential additions to the current ore reserve estimate for the Project within
the next 12 - 36 months :

    -   Conversion of inferred mineral resources within current pit designs
        to ore reserves.

    -   Potential for satellite deposits to provide a higher grade blend of
        ore into the production schedule as evidenced by the initial ore
        reserve estimate for the Bokrobo prospect of 115,000oz Au @
        3.86g/t.

    -   Option acquired over Hotopo prospecting license and Banso
        reconnaissance license, being a combined area of 162 square
        kilometers of prospective tenure.

    -   Option acquired over Kanyankaw prospecting license (17.5 square
        kilometres) where encouraging first pass results included 88m @
        1.16g/t Au from surface sampling.

    -   Significant depth potential at both Salman and Anwia.

    -   Exploration at other known prospects, including Akropon, Avrebo,
        Aliva and Nfutu.
    

    About Adamus

    Adamus Resources Limited is a Perth-based mineral exploration company,
listed on Australian Securities Exchange (ASX), TSX Venture Exchange (TSX-V)
and Frankfurt Stock Exchange Open Market (FSE).
    The Company's primary focus is on exploring, realising and expanding the
economic potential of the Southern Ashanti Gold Project in Ghana, West Africa.
The Project encompasses approximately 644km(2) of tenure in the Ashanti Gold
Belt - host to over 100moz of gold and the Project boasts excellent access to
port and road infrastructure. Ghana is a stable West African country with a
long history and some of the world's largest gold mining operations. Gold
production is vital to the national economy. Members of the Adamus Board and
management team have proven records in mineral exploration, project
development and project financing.

    
    Kind regards

    (signed)

    Mark Bojanjac
    Managing Director/CEO
    

    Information in this announcement pertaining to ore reserves was compiled
by Glenn Williamson an employee of Mining Resources Pty Ltd, who is a Member
of The Australasian Institute of Mining and Metallurgy. He qualifies as a
"Qualified Person" under Canadian National Instrument 43-101 - Standards of
Disclosure for Mineral Projects. Glenn Williamson has sufficient experience
which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a
"Competent Person" as defined in the JORC Code. Glenn Williamson consents to
the inclusion in the announcement of the matters based on this information in
the form and context in which it appears.
    Information in this announcement pertaining to mineral resources was
compiled by Nic Johnson, an employee of Hellman & Schofield Pty Ltd, who is a
Member of The Australian Institute of Geoscientists and has more than 5 years
experience in estimation of recoverable resources in gold deposits. He
qualifies as a "Qualified Person" under Canadian National Instrument 43-101 -
Standards of Disclosure for Mineral Projects. Nic Johnson has sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to
qualify as a "Competent Person" as defined in the JORC Code. Nic Johnson
consents to the inclusion in the announcement of the matters based on this
information in the form and context in which it appears.
    Information in this announcement pertaining to exploration results was
compiled by Ron Heeks, an employee of Adamus Resources Limited, who is a
Member of The Australasian Institute of Mining and Metallurgy and has more
than 5 years experience in estimation of recoverable resources in gold
deposits. He qualifies as a "Qualified Person" under Canadian National
Instrument 43-101 - Standards of Disclosure for Mineral Projects. Ron Heeks
has sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is
undertaking to qualify as a "Competent Person" as defined in the JORC Code.
Ron Heeks consents to the inclusion in the announcement of the matters based
on this information in the form and context in which it appears.

    
    The TSX-V and ASX does not accept responsibility for the adequacy or
    accuracy of this release. No stock exchange, securities commission or
    other regulatory authority has approved or disapproved the information
    contained herein.
    

    Caution Regarding Forward Looking Information.
    Certain statements included in this announcement, including information
regarding Adamus' plans with respect to its mineral properties, constitute
forward-looking information. Forward-looking information includes, among other
things, statements regarding expected operations and projected economics.
Forward-looking information is based upon a number of estimates and
assumptions made by the Company in light of its experience, current conditions
and expectations of future developments, as well as other factors that the
Company believes are appropriate in the circumstances. While these estimates
and assumptions are considered reasonable by the Company, they are inherently
subject to business, economic, competitive, political and social uncertainties
and contingencies. Many factors could cause the Company's actual results to
differ materially from those expressed or implied in any forward-looking
information provided by the Company, or on behalf of, the Company. Such
factors include, among other things, risks relating to additional funding
requirements, metal prices, exploration, development and operating risks,
competition, production risks, regulatory restrictions, including
environmental regulation and liability and potential title disputes. Investors
are cautioned that forward-looking information is no guarantee of future
performance and, accordingly, investors are cautioned not to put undue
reliance on forward-looking information due to the inherent uncertainty
therein. Forward-looking information is made as at the date of this
announcement and the Company disclaims any intent or obligation to update
publicly such forward-looking information, whether as a result of new
information, future events or results or otherwise.





For further information:

For further information: Mark Bojanjac - Managing Director/CEO, +61 8
9322 5943, email: mark@adamusresources.com.au; Mark Connelly - Executive
Director/COO, +61 8 9322 5943, email: mark.connelly@adamusresources.com.au;
For media enquiries contact: Brian Thornton - Farrington National, +61 2 9332
4448, email: bt@farrington.com.au

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ADAMUS RESOURCES LIMITED

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