- Initial shipment of concentrate to a smelter marks company's first generation of revenue and operating cash flow
- Mine now approaching production of 200 tons of ore per day; targeting ramp-up to rate of 350-400 tons per day by 2013
- Initial concentrate production was from lower-grade ore mined during pre-production phase; now extracting for shipment to the mill higher-grade ore
- About 3,500 tons of broken ore currently stockpiled for shipment to mill
- Strong results from ongoing definition drilling in the McGarry Mine
- Approximately three-quarters of the 80 definition holes drilled in the current stoping areas encountered visible gold with many assays returning more than one ounce per ton
- Company now is continuing to improve operating efficiencies, positioning Armistice for further growth in 2013, and focused on generating revenues, positive operating cash flow, and earnings
TORONTO, Sept. 4, 2012 /CNW/ - Armistice Resources Corp. (TSX: AZ) today announced that it has begun the shipment and sale of gold concentrate from its McGarry gold mine in Ontario's Kirkland Lake area.
"The commencement of shipping and selling gold concentrate from our first operating mine obviously is a significant and exciting milestone in the development and growth of Armistice Resources," said Todd J. Morgan, President and Chief Executive Officer. "The initial shipment of 35 tons of concentrate from the mill in Cobalt, Ontario to the smelter also marks Armistice's first generation of revenue and operating cash flow.
"Following formal acceptance of the initial shipment by the smelter, we will be proceeding with regular shipments of concentrate for refining and sale. We have an additional 135 tons of flotation concentrate and 24 tons of gravity concentrate ready to ship. We are approaching production of 200 tons per day from the McGarry for shipment to the mill in Cobalt and are working to increase this to an average of 350-to-400 tons per day by 2013. A surface and underground stockpile of 3,500 tons of broken ore is currently available for shipment to the mill," Mr. Morgan continued.
"The material that we were sending to the mill, from which the first 200 tons of concentrates were produced, mainly consisted of pre-production, lower-grade ore that had been earlier brought to the surface at the McGarry Mine property. During the past few months, we have been extracting and stockpiling higher-grade ore for milling particularly from the 325N and 400N zones on the 2,250-foot level, as well as the 260N zone, about 100 feet south of the 325N zone."
"To maximize the extraction from these zones, we have driven a ramp down to give an extra 30 feet of vertical mining extent from below the 2,250-foot level, which currently is the lowest level in the mine," reported Erik Andersen, Vice-President and Chief Operating Officer. "We are developing two sub-parallel stoping zones from a series of three access cross-cuts over a strike length of 300 feet. Two of the cross-cuts are completed and a third is partially done, awaiting the completion of diamond drilling from a station set up in the heading.
"We now have completed more than 80 definition drill holes over a strike length of about 600 feet in the 260N, 325N, and 400N stoping areas on the 2250 Level. We are quite pleased with what we are finding. Approximately three-quarters of the holes drilled encountered visible gold with many assays returning more than one ounce per ton. Using the experience gained in the stoping areas of these three zones, we have been able to prepare a short- and medium-term production plan that we will apply as well to the known mineral resource down to the 2,450-foot level, about 200 feet below the current shaft bottom, and up to the 1,250-foot elevation," Mr. Andersen continued.
All the active areas being mined and explored at the McGarry Mine and reported in this news release are included in the mineral resources covered by the NI 43-101 compliant report Preliminary Economic Assessment and Mineral Resource Estimate, McGarry Project, McGarry Township (Virginiatown), Ontario prepared by Martin Drennan, P.Eng., Python Mining Consultants Inc. dated 8 April 2009 and amended 30 September 2011.
"We are working on a complete evaluation of the results of the drilling program carried out in 2011 and earlier this year on the Kerr-Addison site, combining it with the available historical data," Mr. Andersen said. "During 2011 and 2012, Armistice drilled 61 exploration holes (76,800 feet). We have previously reported the results of this program, including assays of 25 intersections of at least 0.2 ounces per ton over more than two feet with eight of these being at least 0.5 ounces per ton. We have determined that the area south of the former workings, the Mill Zone, over a strike length of 3,000 feet warrants significant follow-up. We will be using our evaluation work to plan the next phase of our exploration drilling on the Kerr-Addison property, which we likely will begin later this year."
"The course of starting up a mine is never entirely smooth or entirely predictable," noted Mr. Morgan. "Our start-up has gone relatively well. Overall, despite some relatively minor bumps and delays, we are pleased with the progress that we have steadily been making in starting up mining operations at the McGarry Mine and in getting the milling and refining underway. We also are pleased with the exploration results that we have reported on both the McGarry and Kerr-Addison properties and with the team of some 70 people that we have recruited since March 2011 when there were just eight people at the McGarry site.
"It now is evident that we will not meet our target of producing 25,000 ounces in 2012," Mr. Morgan continued. "Of course, that's really only a timing issue and that gold will be mined and sold as we continue to move forward. Our focus is now on continuing to improve our operating efficiencies, position Armistice for further growth in 2013, and on generating revenues, positive operating cash flow, and earnings."
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, began in April 2012 shipping and milling ore from its McGarry Mine. 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. Refining and sales of the gold concentrate resulting from the milling began in August 2012.
The McGarry Mine is adjacent to the Kerr-Addison Gold Mine that 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 185,810,971 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 may contain forward-looking statements, including current expectations regarding exploration programs as well as on the timing of the commencement of commercial production, the rate of production, and gold sales. 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; and the degree to which factors which would make a mineral deposit commercially viable are present; and 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. Investors 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.
Email: [email protected]
Investor and Media Relations
Richard W. Wertheim
Wertheim + Company Inc.
Email: [email protected]
416-594-1600 416-518-8479 (cell)