- Company continues making solid progress; maintains forecast gold production of 25,000 ounces in 2012 and 40,000 ounces in 2013
- Targeting April for beginning of milling
- Carrying out rebuild and maintenance of McGarry mine's hoist system; using downtime to advance other planned maintenance and construction projects
- Surface exploration drilling program continues on Kerr-Addison property
- Armistice made its second of five scheduled option payments on Kerr-Addison property
- Various officers and directors recently exercised options to purchase additional 700,000 common shares
TORONTO, March 20, 2012 /CNW/ - Armistice Resources Corp. (TSX: AZ), which began hoisting and stockpiling in December at its McGarry gold mine in Ontario's Kirkland Lake area, today issued an update report on the company's progress.
"Armistice has continued to make solid progress in all aspects of bringing the McGarry mine into production, and in our development and exploration work both underground at the McGarry site and on the surface at our Kerr-Addison property," reported Todd J. Morgan, president and chief executive officer.
"As previously reported, we began hoisting and stockpiling operations at the McGarry Mine in December 2011. The ore is being stockpiled on the surface and also underground at the McGarry site pending the start of trucking it to the mill for processing," Mr. Morgan said.
On March 6, 2012, Armistice announced that it had signed a custom milling contract for processing the first 30,000 tons of ore to be delivered from the McGarry Gold mine. The contract is with SMC (Canada) Limited for processing the ore at its McAlpine Mill. The contract with SMC will meet Armistice's requirements for the start-up phase and is open for extension if the processing of the first 30,000 tons meets all expectations.
"We have since issued requests for proposals for the trucking of our ore to the mill. We currently are targeting April to begin milling," Mr. Morgan added.
Rebuild and Maintenance of Hoist System Initiated
In mid-March, Armistice proceeded with rebuilding and maintenance work on the hoist system at its McGarry gold mine.
"As the result of the failure of a main bearing on one of the two hoist motors, we are proceeding with repairs and maintenance work on the system," said Mr. Morgan. "While the hoist system is being repaired, which we expect to last approximately two to three weeks, we are able to advance other previously planned construction and maintenance projects that would have required a shut down.
"Given the ore material from the mine that we already have brought to the surface and that we have developed at the 2250 Level, we are confident that we will meet our previously stated production target of 25,000 ounces of gold in 2012," Mr. Morgan said.
"Based on the rebuild of the motor and other upgrades being made to the hoist system, we expect that it will be operating with improved efficiency when it is placed back into service. Other projects that we are working on during this period include modifications to the headframe required for double skipping, construction of a temporary headframe on the surface at the vent raise for the installation of escapeway ladders to the 1250 Level, and preventative maintenance for the other hoist motor and associated motor generator set," Mr. Morgan added.
Other Operating Highlights
Following are some additional operating highlights of the progress at the McGarry Mine and in the company's exploration program on the Kerr-Addison property since the beginning of 2012:
- continued development of the 325N Zone advancing sill drifts which are the first stage of stope development in three sections within the 325N Zone;
- opened a new cross-cut and access into the western extent of the 325N Zone;
- continued detailed diamond drilling to define the upwards extension of the 325N Zone stoping areas. The company reported on the results of 16 of these holes in a news release issued January 25, 2012 noting that the findings and stope definitions exceeded management's expectations;
- continued to advance ramp access towards the 400N Zone, which is now less than 200 feet away;
- began access and sill drifting in the 260N Zone on the 2250 Level;
- advanced the Alimak escapeway and ventilation raise to the 2050 Level, preparing setup for the next stage of these raises from the 2050 to the 1650 Levels; and
- completed the excavation for a new underground shop and a breakthrough for a new station at the 2250 Level.
"With respect to the exploration work being done on the Kerr-Addison property," said Erik Andersen, P.Eng., vice-president and chief operating officer, "as previously reported, we slowed down the drilling being done by shutting down one of the two drills that had been operating. We took this decision to provide us time to analyze more fully the work that has been completed. As this analysis progresses, we will be better able to determine where future drilling should be done.
"The second drilling rig is continuing to operate and we completed seven new holes in January and February. That brings the total surface diamond drilling holes completed to 68 on the Kerr-Addison property for about 88,300 feet. We have drilled another 16 holes on the surface of the McGarry property for more than 18,000 feet," Mr. Andersen reported.
In December 2011, Armistice made the second of five scheduled payments of $500,000 each on its option to acquire up to 100% of the Kerr-Addison property.
The company is steadily continuing to hire people in various mining disciplines. Employment now stands at 68 people.
Issue of Treasury Shares
Armistice also reported that it recently issued 700,000 shares from treasury as various officers and directors exercised options to purchase additional stock in the company. The current number of issued and outstanding shares is 185,810,971.
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 hoisting and stockpiling operations in December 2011 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 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 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; 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.
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 ext. 223