- Contract with SMC (Canada) Limited provides for processing McGarry ore at the McAlpine Mill in Cobalt, Ontario
- Armistice will be McAlpine Mill's sole customer during contract period
- Initial contract is for 30,000 tons and is open to extension
TORONTO, March 6, 2012 /CNW/ - Armistice Resources Corp. (TSX: AZ) today announced that it has signed a custom milling contract for processing 30,000 tons of gold-bearing ore to be delivered from the company's McGarry gold mine in Ontario's Kirkland Lake area.
The contract is with SMC (Canada) Limited for processing the ore at its McAlpine Mill in Cobalt, Ontario, approximately 115 km south of the McGarry Mine. Armistice has been hoisting and stockpiling ore from the McGarry Mine since December 2011. 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.
Armistice chose the McAlpine Mill after carrying out discussions and testing with the mill and a number of alternate choices. In evaluating the mill, Armistice sought to select the one with the best fit. In its evaluation process, Armistice was assisted by Soutex Inc. of Quebec City, a leading metallurgical consulting firm. Under Soutex' guidance, test work on ore from the McGarry Mine's 325N Zone, where the first production will come from, has shown gold recoveries in the order of 96% using a combination of gravity and flotation and a recovery of 92% using flotation only at bench test scales.
"The McAlpine Mill will be processing ore for Armistice on an exclusive basis during the contract period," said Todd J. Morgan, President and Chief Executive Office of Armistice. "This exclusivity will enable Armistice to work closely with the mill and to provide oversight as we begin to work together. In addition, we have engaged Soutex to work with us to evaluate other suitable mills in the region that would be a good fit for the ore that will be generated by the McGarry Mine in increasing quantities that we expect will eventually exceed the capacity of the McAlpine Mill."
Approximately 3,000 tons of material for this first contract will be lower-grade material from previous test mining and development activities in addition to the current material which is running at an average grade of about 0.30 oz/t gold.
Underground sampling in the 325N area of the 2250 Level at the McGarry Mine is ongoing. This work consists of sill drifting on two sub-zones in the 325N Zone and on the 260N Zone. Two underground diamond drills are active in the 325N area engaged in detailed stope definition. In a news release issued January 25, 2012, Armistice presented interim results from the drilling program in this area.
Development on the 2250 Level is now only about 200 feet from cross cutting through the 400N Zone which appears to be an extension of the 325N Zone. The three gold zones in the 325N area: 260N, 325N, and 400N zones are expected to provide sufficient mill feed.
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 185,110,971 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; recovery rates in custom milling; 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.
Investor and Media Relations
Richard W. Wertheim
Wertheim + Company Inc.
416-594-1600 ext. 223