Adamus Advances Positive Feasibility Study


    PERTH, Western Australia, June 14 /CNW/ - Emerging gold producer Adamus
Resources Limited ('Adamus' or 'the Company') (ASX & TSX-V:ADU) has further
advanced its Southern Ashanti Gold Project ('SAGP' or the 'Project') in West
Africa, with the feasibility study confirming the resource and economic
potential of the Project.
    Adamus' Managing Director Mark Bojanjac said "the principal objectives of
the feasibility study had now been achieved, including JORC compliant
reporting of resources and reserve estimates, along with operating and capital
costs estimates for a 1.3Mtpa throughput scenario".
    The resource base of the Salman and Anwia deposits has increased to
17Mt @ 2.2g/t for 1,200,000 oz gold (Measured and Indicated) and
6.3Mt @ 1.9g/t for 390,000 oz gold (Inferred).
    The SAGP is located in southern Ghana, West Africa. The Project consists
of a contiguous block of granted tenure covering approximately 500 square
kilometres on the southern extension of the Ashanti Gold Belt, host to over of
60 moz of gold. Ghana has a long mining history and the Project is located to
take advantage of excellent access to port and road infrastructure.
    "The feasibility study has allowed Adamus to upgrade its resource and
financial estimates for the Southern Ashanti Gold Project. We have now largely
de-risked the Project and the Board is encouraged by the regional potential of
its ground holding, "Mr Bojanjac said.
    "Adamus' strategy is to advance and grow these assets as quickly as
possible, while maintaining our aggressive exploration approach," Mr Bojanjac
    Work on the feasibility study commenced in the first quarter of 2006. The
study was coordinated by Adamus using the services of experienced independent
consultants including Lycopodium Engineering Pty Limited, Knight Piesold
Consulting, SGS Environment and Mining Solutions Consultancy Pty Limited.
    The feasibility study estimates average annual gold production of
approximately 100,000 ounces over the first five and a half years of mine life
and is based on the development of a 1.3 million tonne per annum (Mtpa)
processing facility, treating the Anwia and Salman deposits over a six and a
half year period. The studied plant configuration consists of crushing, SAG
milling, gravity recovery, pre-leach thickening and a six stage CIL circuit.
    Total cash costs per ounce are estimated to be US$354. Cash operating
costs include all mining, processing and administration costs, royalties (3%
of gross revenue) and excludes sustaining capital and mine closure costs.
Operating costs have been estimated by Lycopodium Engineering Pty Ltd in
consultation with Adamus. Mining costs have been calculated by Mining
Solutions Consultancy Pty Ltd based on budget pricing received from
experienced Ghana active mining contractors.
    The Base Case economic model has been run at a gold price of US$660 per
ounce and estimates total project cash flows to be A$184.6 million (pre capex
and tax). Ore reserve estimates have been calculated using the more
conservative gold price of US$575 per ounce. The study assumes power sourced
from the Ghanaian power grid.

    About Adamus

    Adamus Resources Limited is a Perth-based mineral exploration company,
listed on Australian Stock Exchange (ASX), Toronto Stock Exchange Venture
Exchange (TSX-V) and Frankfurt Stock Exchange Open Market (FSE).
    The Company's primary focus is on exploring and realising the economic
potential of the Southern Ashanti Gold Project in Ghana, West Africa. The
Project encompasses approximately 500km2 of granted tenure in the Ashanti Gold
Belt- host to over60moz of gold and some of the largest gold mines in the
world. Ghana is a stable West African country with a long history of
large-scale gold mining. 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.

    Summary of Key Project Parameters

    Physical Parameters                                Units       Base Case
    Plant Processing Rate                       Tonnes/annum       1,300,000
    Average Gold Grade (g/t) (excl. low grade)           g/t            2.65
    Mill Feed Grade (incl. low grade ore)                g/t            2.39
    Recovery (average)                                     %            86.6
    Gold Contained                                       ozs         646,360
    Gold Produced                                        ozs         559,620
    Mine Life                                          years             6.5

    Capital Cost - Project                           US$'000          42,281
    Capital Cost- EPCM                               US$'000           8,142
    Capital Cost - Owners                            US$'000          29,092
                                                     US$'000          79,515

    Operating Cash Cost                               US$/oz             354

    Financial Parameters
    Gold Price used for Financial Model               US$/oz          660.00

    Project Cash flow (before capital,
     taxes) @ 0.82                               AUD$'000         184,591
    IRR(pretax)                                            %              19
    Break Even Gold Price                                US$             542
    Payback of Capital                                 years             2.8

    Analysis undertaken by the Company has highlighted the significant impact
that additional ore reserves will have on the economics of the Project.
Accordingly, as set out in the section below titled "Ongoing Exploration", the
Company's exploration activities in 2007 will focus on the key target areas of
the Project with the objective of proving up additional ore reserves.

    Summary of Key Project Parameters

    Work Completed to Date

    The following specific activities have been completed in connection with
the preparation of the feasibility study:

    -  Reserve Definition Drilling
       22,858m   infill drilling to enable the preparation of resource models
                 and subsequently mine designs and schedules leading to the
                 development of ore reserve estimates.

       5,215m    drilling to obtain metallurgical samples of the various ore
                 types to enable the completion of an extensive metallurgical
                 program and thereafter the assessment of metallurgical
                 recoveries for each of the ore types to be processed.

       1,537m    geotechnical drilling to enable the assessment of pit slopes
                 for use in the mine design work.

       1,070m    drilling for pit dewatering bores to enable pump testing and
                 an assessment of pit dewatering requirements.

       30,680m   TOTAL

    -  Design of the processing facility and associated infrastructure to
       enable estimates of capital and operating costs suitable for a
       bankable quality feasibility study.

    -  Design and costing of the tailings storage facility and access roads.

    -  Environmental baseline studies and the completion of an Environmental
       and Social Impact Assessment (ESIA) culminating in the preparation of
       an Environmental and Social Impact Statement (ESIS) for submission to
       the Ghana Environmental Protection Agency (EPA).

    -  Preparation of a Resettlement Action Plan (RAP) for the Salman

    -  Review and assessment of the Project power supply options.

    -  Quantification and agreement on crop compensation rates with the local
       communities and the development of crop surveys.

    -  Project risk assessment.

    -  Financial modeling to determine economic returns.

    Adamus is committed to further enhancing the economics of the SAGP by
endeavouring to add additional ore reserves and reducing, where possible, the
estimated capital costs, by further focused exploration and the examination of
alternative plant options where possible.

    Permitting and Approvals Work

    Submission of the ESIS and RAP to the EPA and its approval is necessary
before ground work may commence. EPA approval is also generally required
before the Minerals Commission will grant the required mining licence.
Finalisation of the ESIS depends on finalisation of the Salman Village RAP and
crop compensation surveys, which are expected to be ongoing over the remainder
of 2007.
    Crop compensation rates were agreed in May 2007. This now allows Adamus
to commence the Salman Village census and hence complete the RAP.
    Based on the work completed to date, Adamus believes that the ESIS will
be submitted before the end of 2007

    Resource Upgrade

    The resource base of the Salman and Anwia deposits (using a 1 g/t lower
cut grade) has increased to 17Mt @ 2.2g/t for 1,200,000 oz gold (Measured and
Indicated) and 6.3Mt @ 1.9g/t for 390,000 oz gold (Inferred).

    Summary of Southern Ashanti Gold Project Resource Estimate
    @1.0g/t Au Cut-Off

    Deposit                        Category   Tonnage   Grade Au   Contained
                                                 (Mt)      (g/t)   Ounces Au
    Combined Salman & Anwia        Measured        12        2.3     860,000
    Combined Salman & Anwia       Indicated     5.0Mt        1.9     310,000
    Southern Ashanti Gold Project  Measured &
    Total                         Indicated      17Mt        2.2   1,200,000

    Combined Salman & Anwia        Inferred     6.3Mt        1.9     390,000

    Ore Reserve

    The feasibility study has been based on open pit designs optimised using a
gold price of US$575 per ounce to generate the following ore reserve:

                                        Tonnes    Grade (A/u)    Ounces (A/u)
    Proved Ore                       7,272,000          2.43         568,300
    Probable Ore                     1,125,000          2.24          81,000
    Total Ore                        8,397,000          2.39         646,300

    In addition to the above reserves, Inferred Resources within the pit
design totals:

                                        Tonnes    Grade (A/u)    Ounces (A/u)
    Inferred Resource                  225,000          2.39          17,300

    Conversion of the in-pit resource to reserve status has been excellent,
with now approximately 85% of the reserve classed as Proved.
    The feasibility study provides that 1.3Mt of 1.03g/t material will be
stockpiled and processed in the final year of mine life.
    Metallurgical testwork indicates that a simple flow sheet incorporating
primary crushing, SAG milling, pre-leach thickening followed by a six stage
carbon-in-leach (CIL) circuit will yield optimal recovery. A gravity recovery
stage installed on the cyclone underflow enhances overall gold recovery.
    Average metallurgical recoveries for the Salman and Anwia ore reserves are
as indicated in the table below:

    Deposit                  Oxide            Transition             Fresh
    Salman                   86.8%                 74.7%             54.7%
    Anwia                    95.8%                 93.3%             91.8%

    Capital Estimate

    The Project development capital costs are presented in US dollars, as at
December 2006, to nominal accuracy of (+/-) 15% for the 1.3mtpa processing
plant and associated infrastructure including the plant, tailings system,
support facilities and services, mining, management costs, pre-production
costs, engineering costs, etc.
    The feasibility study capital cost of the Project is estimated in the
following summary:

    Process Plant                            42,281
    Infrastructure:                          10,446
    EPCM - Engineering Contractor             8,142
    Owners Project Costs                     10,040
    Other Project Costs                       8,606
    TOTAL                                    79,515

    The feasibility study also assumes a 10% contingency allowance in
addition to the capital cost estimate above.
    The capital cost estimate assumes that Adamus will purchase new equipment
and associated infrastructure. Adamus is currently reviewing options to reduce
the current estimated capital cost, including the acquisition of suitable
second hand equipment.

    Other Key Assumptions

    The feasibility study incorporates the current fiscal regime for Ghana,
with certain taxes, duties and royalties.

    Ghana Power Supply

    Stability of the Ghana power supply remains the SAGP's most significant
short-term concern. Hydro-electric power in Ghana is generated by the Akosombo
Dam on the Volta River. Dam water levels are currently at historical lows,
resulting in rolling power outages in recent months.
    Adamus has investigated the installation of its own on-site power
generation and determined that the current cost of diesel would significantly
add to the plant operating costs.
    The financial model provided in the feasibility study assumes that the
SAGP will use Ghana grid power. Various government initiatives to supplement
the power supply, for ongoing continuity are currently underway.
    Adamus has received confirmations from both the Electricity Commission of
Ghana (ECG) and the Volta River Authority, that they will be able to meet the
Project's electricity supply requirements. ECG currently supplies power to
Redback Mining's Chirano Project.

    Ongoing Exploration

    Now that critical mass has been established for the SAGP, any additional
mineable reserves will add substantially to the future profitability of the
    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 six months.

    -  Conversion of inferred resources inside current pit designs to ore

    -  Open pit ore from the Bokrobo Prospect, at Anwia South.

    -  Modest depth extensions demonstrated by recent diamond drilling at

    -  Akanko North, presently only drilled on 200m spaced traverses and not
       included in resource estimates.

    -  Evaluating the viability of an open pit at Nfutu Prospect.

    -  Exploration at other known prospects.

    Adamus is strongly encouraged by the depth potential at Anwia and the
potential for further discoveries at Bokrobo.
    An expansive exploration program has commenced with approximately 22,000m
of drilling scheduled over the next six months, with long term arrangements
entered into with drilling contractors.

    Ongoing Project Enhancement-Adding Value

    The Board of Adamus is encouraged by the positive results of the
feasibility study and the regional future potential of its ground holding.
Adamus continues to actively further enhance the Project and is focused on the
following work activities:

    -  Additional metallurgical testwork to fully optimise the process flow

    -  Review of the capital costs with specific attention to the sourcing of
       suitable second hand equipment.

    -  An ongoing campaign of depth drilling and drilling new targets.

    -  Finalisation of the ESIS and RAP and submission to the EPA for

    -  Finalisation of the feasibility study documentation and submission to
       the Ghana Minerals Commission for the granting of the mining licence.

    -  Negotiation with the Ghana Ministry of Finance on the formulation of a
       Financial Stability agreement for the Project.

    It is anticipated that these activities will be completed by the end of
2007, with a full reappraisal of Project economics scheduled for the first
quarter of 2008.

    Management Team

    The Adamus management team has extensive experience in the development
and operation of projects and exceptional skill base to successfully develop
and operate the Company's SAGP.
    Mr. Bojanjac, Managing Director/CEO is a Chartered Accountant with a
Bachelor of Commerce degree and has been instrumental in the success of a
number of gold companies. He was a founding director of Gilt-Edged Mining
Limited which discovered one of Australia's highest grade gold mines and was
managing director of a public company which successfully developed the 2.4m oz
Boroo Gold Project in Mongolia.
    Mr. Mark Connelly is the Company's Chief Operating Officer/Executive
Director and has over 19 years of experience working in Australia, Canada and
the US in various high level management positions for a range of resource
companies. Mr. Connelly's recent work with Newmont Mining Corporation brings
additional high level operating experience in Ghana following his direct
involvement in the development of both the Ahafo (12Moz) and Akyem (6Moz)
mining operations.
    Mr. Geoff M Jones Non-Executive Director, (Civil Engineer) has extensive
African experience during his 20 years of construction, engineering, mining
and processing, with Ghanaian experience at Obotan and Golden Pride in
    Mr. Gary Brabham (Technical Director) provides the company with over 27
years experience in mining and exploration, with four of those years as a
resident of Ghana based at the Abosso and Damang projects.

    The Board of Adamus is committed to the development of the SAGP and
believes that the ongoing work and continued focus on exploration will add
further value to the Project whilst it is being progressed with a view to
commencing development as quickly as possible.

    Kind regards.


    Mark Bojanjac
    Managing Director/CEO

    Information in this announcement pertaining to exploration results and
mineral resources was compiled by Gary Brabham, a director of Adamus, who is a
Member of The Australasian Institute of Mining and Metallurgy and 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. Gary Brabham 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. Gary Brabham consents to the
inclusion in the announcement of the matters based on this information in the
form and context in which it appears.
    For full details on the key assumptions, parameters and methods used to
estimate mineral resources please refer to Appendix 1.
    Information in this announcement pertaining to mineral reserves was
compiled by Tamer Dincer an employee of Mining Solutions Consultancy Pty Ltd,
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. Tamer Dincer
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.
Tamer Dincer 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 Statements.

    Statements regarding Adamus' plans with respect to its mineral properties
are forward-looking statements. There can be no assurance that Adamus' plans
for development of its mineral properties will proceed as currently expected.
There can also be no assurance that Adamus will be able to confirm the
presence of additional mineral deposits, that any mineralization will prove to
be economic or that a mine will successfully be developed on any of Adamus'
mineral properties. Circumstances or management's estimates or opinions could
change. The reader is cautioned not to place undue reliance on forward-looking

                                 Appendix 1

                         Estimated Resource for the
           Southern Ashanti Gold Project - 1.0g/t Au Cut off grade

    Deposit                     Category    Tonnage    Grade Au    Contained
                                               (Mt)       (g/t)    Ounces Au
    Salman                      Measured      7.3Mt         2.1      500,000
    Anwia                       Measured      4.5Mt         2.5      360,000
    Combined Salman and Anwia   Measured       12Mt         2.3      860,000
    Salman                     Indicated      3.2Mt         1.9      200,000
    Anwia                      Indicated      1.8Mt         2.0      110,000
    Combined Salman & Anwia    Indicated      5.0Mt         1.9      310,000
    Total SAGP                 Measured &
                               Indicated       17Mt         2.2    1,200,000

    Salman                      Inferred      3.8Mt         1.9      240,000
    Anwia                       Inferred      2.4Mt         2.0      150,000
    Combined Salman & Anwia     Inferred      6.3Mt         1.9      390,000

    1. The reported grades, tonnages and contained ounces are rounded to two
       significant figures in accordance with recommendations of the JORC &
       CIM codes. Internal inconsistencies are due to rounding.
    2. All Mineral Resources reported are at lower cut-off of 1 g/t Au
    3. The Salman Mineral Resource comprises several discrete zones of
       mineralization spread over approximately 7 km of strike.
    4. The Salman Mineral Resource estimate is based on approximately 1000 RC
       Holes for 74,100m and 28 diamond core
    5. holes/tails for ca. 4,690m by both BHP Minerals and Adamus. Measured
       and indicated resources are defined by drilling at approx. 25m x 25m
       spacing; inferred resources are defined by drilling at mainly 50m x
       25m spacing. Approx. 90 per cent of the drilling relevant to the
       current resource estimate was conducted by Adamus. All RC drilling was
       conducted using face sampling hammers and typically 5.25" drill bits,
       and diamond core mainly HQ with minor NQ. Approximately 11,500m of
       sampling in 163 trenches inform estimates in near-surface material.
       Approx. 85 per cent of the Salman resource lies at depths of less than
       100m below surface.
    6. The Anwia mineral resource estimate encompasses 480 RC holes for ca.
       32,000 m and 99 diamond core holes for approx. 18,010m by three
       companies, principally Semafo, Samax, and Adamus. Effective drill
       density at Anwia is approximately 20m centres for RC drilling and 40m
       for diamond coring, with some parts of the oxide zone drilled out to
       15 m centres. The Anwia resource extends to approx. 170m below
    7. All RC and diamond core samples were geologically logged.
    8. Most Adamus RC drill cuttings are weighed on a 1 metre basis and
       overall recovery is acceptable. Recovery information for programs by
       other companies was not collected or is no longer available.
    9. For Adamus drill core, logged mineralized zones were sampled on a 1 m
       basis with 1/2 core; 1/4 core was taken on a 2 m basis through logged
       barren rock. Fresh rock core is cut with a diamond saw, oxide material
       sampled by spatula. Sampling information for diamond core by other
       companies is generally no longer available. Most mineralized RC
       intervals were sampled on a 1 m basis by riffle splitter. Likely waste
       RC intervals were sampled on 1 m or 4 m basis using a riffle splitter.

For further information:

For further information: Mark Bojanjac - Managing Director, CEO, +61 8
9322 5943, email:,au; Mark Connelly - Executive
Director, COO, +61 8 9322 5943, email:

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