TSX : AUE
AIM : AUE
TORONTO, Sept. 7, 2015 /CNW/ - Aureus Mining Inc. ("Aureus" or the "Company"), the TSX and AIM listed West African Gold Producer, is pleased to announce the commencement of gold sales and initial mining and processing operations from the New Liberty Gold Mine ("New Liberty") in Liberia.
- Since nameplate capacity in mid-July to end of August, there have been four gold doré shipments from New Liberty, resulting in sales of 4,881 ounces of gold at an average price of US$ 1,119 per ounce.
- Plant commissioning is progressing well with 52,310 tonnes of ore processed at an average feed grade of 3.6 g/t, which is in line with expectations. Average gold recoveries of 89% and recent recoveries as high as 92% are ahead of expectations for this stage of commissioning. Optimisation work is ongoing towards the delivery of the steady state target of 93%.
- Mining operations were initially hampered due to the availability of explosives and this has now been addressed. The Company is preparing to implement an updated mine plan, which includes the earlier deployment of additional mining equipment - the Company continues to expect to meet its production target for the first 12 months of operations. To date, the Company has mined 263,673 tonnes of ore and 6,233,686 tonnes of waste with ore stockpiles totalling 211,363 tonnes.
- A comprehensive water management plan has enabled mining to continue during the heavy rains experienced in August.
- Grade control drilling and mining reconciliation to date have continued to show that the ore-body is extremely robust and representative of the resource model.
- The remaining staff of DRA Mineral Projects and other third party contractors are beginning to demobilise from New Liberty with the Aureus owner team taking over full control of the process plant operations.
- The Company is on track to declare Commercial Production at New Liberty in Q4 2015 and this will be announced following the plant achieving an average of 60% plant capacity over a 60 day period.
- Liberia was declared Ebola free by WHO at the end of August.
Commenting on the commencement of gold sales, David Reading, President and Chief Executive Officer of Aureus Mining, said:
"The first commercial exporting and sales of gold from Liberia is yet another important milestone in the overall evolution of New Liberty and marks the beginning of revenue generation for the Company. The progress being made is very encouraging with early operations confirming the high grades at New Liberty and good recoveries, despite the typical teething problems associated with commissioning a new gold mine. We look forward to updating stakeholders on further progress as we reach commercial production levels at New Liberty during Q4 2015."
UPDATE ON NEW LIBERTY OPERATIONS
The Company achieved nameplate capacity on the gold plant in mid-July and continues to progress through the commissioning and ramp-up process in order to optimise recoveries and work towards a declaration of commercial production. The following is a summary of this process in relation to the key business areas of mining and processing.
Mining operations were hampered from April to July due to a lack of regular and consistent supply of explosives caused by a delay in the delivery of the emulsion plant from China – the delivery was impacted due to shipping restrictions to Ebola affected countries. In order to alleviate this situation, a supply chain was set up through Ghana and Côte D'Ivoire to transport explosives by road. The emulsion plant will now be commissioned in early November. The Company now has over three months of supply of explosives at New Liberty and has a regular supply of explosives to site.
Initially mining, road construction and the development of the run of mine ("ROM") pad were hampered by the lack of hard rock which was caused by the delay in the delivery of explosives. Nevertheless, the mining team has stripped over 6 million tonnes of waste rock and mined 263,673 tonnes of ore. As at end of August, the ore stockpiles total 211,363 tonnes. With an adequate supply of explosive material there have recently been considerable improvements in mining sequencing and ore fragmentation is improving as mining progresses below the weathered rock.
The construction of the operational water management system ensures that effective mining can be undertaken during the rainy season. Mitigations include a flood bund around the pit, pump stations and creek diversion. All are working as designed and mining operations have continued to progress throughout the wet-season and are now focussing below the weathered oxide zone in the Larjor starter pit and moving into fresh rock within the Kinjor pit. The primary focus of the mining team during September is to push back waste to access more ore and increase face length.
Grade control drilling and mining reconciliation to date have continued to show that the ore-body is extremely robust and representative of the resource model.
The on-site mine laboratory operated by ALS Global ("ALS") is now fully operational at the New Liberty Gold Mine and has been processing samples over the last two weeks. The laboratory has the capability of preparing 200 samples per day and is equipped with two furnaces for Fire Assay analysis. The laboratory is staffed by 18 qualified technicians, including five chemists, and offers a 24/7 service to process samples from the mining operation and metallurgical plant, including solutions, carbon, bullion and environmental analysis. As well as servicing the New Liberty Mine, this laboratory also has the capability to service other third party customers across the region.
A revised mining schedule is being enacted to enable the Company to achieve its production targets for the first 12 months of operations. This updated plan will include the three month acceleration of the delivery of an HD785 haul truck and a PC1250 excavator to January 2016, which will facilitate an increase in the mining rates enabling the mining team to catch up on the near term shortfall.
To date, the New Liberty Process Plant has processed 52,310 tonnes of ROM ore at an average feed grade of 3.6 g/t at an average gold recovery of 89%.
During the plant commissioning phase, there have been four gold doré shipments from the New Liberty Mine for smelting and refining at the MKS PAMP refinery in Switzerland. This has resulted in sales of 4,881 ounces of gold at an average price of US$ 1,119 per ounce.
In late July it was noted that the mill discharge grates were not optimum for the ROM ore and therefore required replacing. The supplier has worked with the Company and more robust, heavy duty grates have been installed. However, as a consequence of the discharge problem, the mill could not be operated at full design capacity. This caused undue deterioration on some of the mill liners and lifters, which must also be replaced. The replacement of these components has been undertaken at no cost to Aureus and the mill will continue to operate throughout September with a full mill re-line is scheduled to take place in early October 2015.
Plant processing operations are now focused on optimising reagent consumption, grind size and gold recoveries.
The remaining staff members from DRA Mineral Projects ("DRA"), the EPCM Contractor, and other third party contractors that were involved in construction and commissioning are beginning to demobilise from New Liberty with the experienced Aureus owner team taking full control of process plant operations.
The Company is on track to declare Commercial Production at New Liberty during Q4 2015. Commercial production will be declared by the Company on the first day of the calendar month following the mill having operated at an average of 60% or more of the designed production capacity calculated over a 60 day period. The value of the gold produced prior to commercial production being declared will be deducted from the capitalized construction costs of New Liberty, rather than recorded as revenue.
Following the resurgence of a small number of Ebola cases during June 2015, all associated contacts have now completed their follow up monitoring period, and Liberia was declared Ebola free for a second time by the World Health Organisation ("WHO") following a continuous period of 42 concurrent days without a case ending on 28 August 2015.
WEAJU LEGACY MINING CLAIM SETTLEMENT PAYMENT
The second and final payment has been made in relation to the settlement agreement for the acquisition of certain legacy mining rights from Weajue Hill Mining Corporation ("WHMC"). The legacy mining rights are situated in the Weaju area, covering only 1.7km2 of the total 457km2 Class A Mining Licence granted by the Republic of Liberia on 29 July 2009 to Bea Mountain Mining Corporation ("BMMC"), a wholly-owned subsidiary of Aureus.
As part of the settlement agreement, which was announced on 26 July 2012, a second payment was required to be made on the completion of a feasibility study for the Weaju project. The second and final payment comprises US$ 445,000 and 1,148,611 new issue Aureus shares (using a share price of GBp 25.238 based on a trailing VWAP), which equates to the equivalent of US$ 5 per ounce of measured, indicated and inferred resources, as disclosed in the feasibility study, within the claims area and the surrounding 200 metre perimeter.
The consideration shares issued will be subject to a minimum hold period of four months and one day. Application has been made for the 1,148,611 new issue Aureus shares, expected to be admitted to trading on AIM on 8 September 2015. Following the issue of the consideration shares the Company's issued share capital will comprise 367,868,262 common shares.
About Aureus Mining Inc.
The Company's assets include the New Liberty Gold Mine in Liberia (the "New Liberty Gold Mine," "New Liberty" or the "mine") which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t. A Definitive Feasibility Study ("DFS") has been completed, the first gold pour has taken place and work continues on commissioning the plant for full scale production. The mine is expected to have an 8 year life and annual production of 119,000 ounces for the first 6 years of production. The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated March 25, 2015 and entitled "New Liberty Gold Project, Bea Mountain Mining Licence Southern Block, Liberia, West Africa, Definitive Project Plan."
The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 478 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which are the focus of exploration programs during 2015. Ndablama has an indicated mineral resource of 386,000 ounces of gold grading 1.6 g/t and inferred mineral resource of 515,000 ounces of gold grading 1.7g/t and Weaju has an inferred mineral resource of 178,000 ounces of gold grading 2.1 g/t. The Yambesei (759 km2), Archaen West (112.6 km2), Mabong (36.6 km2) and Mafa West (15.6 km2) licences will also be subject to preliminary reconnaissance geological work. The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company's technical report dated December 1, 2014 and entitled "Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources" ("Ndablama and Weaju Technical Report 2014").
The Company also has a gold exploration permit in Cameroon.
The Company's Qualified Person is David Reading, who holds a MSc in Economic Geology from University of Waterloo, Canada and is a Fellow of the Institute of Materials, Minerals and Mining. David Reading is the President and CEO of Aureus Mining Inc. and has reviewed and approves this press release.
Forward Looking Statements
Certain information in this news release relating to Aureus is forward-looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. Forward-looking information contained in this press release includes, but may not be limited to, statements or information relating to: the New Liberty Gold Project (including the quantity and quality of mineral resource and mineral reserve estimates), the potential to upgrade inferred mineral resources, opportunities to optimize the New Liberty Gold Project, the ability of the Company to develop the New Liberty Gold Project into a mine and the proposed new plans relating thereto regarding operations and mine design, future gold production, and future cash flows, the expected mine life of the New Liberty Gold Project, progress in the fight against Ebola and the anticipated exploration and development activities of Aureus. By their nature, such statements are subject to significant risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: risks normally incidental to exploration and development of mineral properties; the inability of the Company to obtain required financing when needed and/or on acceptable terms or at all; risks that the cost of implementing the new mine plan at the New Liberty Gold Project and the operating cash costs of the New liberty Gold Project exceed those estimated in the new mine plan; uncertainties in the interpretation of results from drilling and test work; the possibility that future exploration, development or mining results will not be consistent with expectations; regulatory and government decisions; the possibility that future drawdowns under the loan facilities may not be available; construction of the New Liberty Gold Project being delayed and/ or over budget; economic conditions; availability and cost of financing; estimates of capital and operating costs and start-up costs; plans regarding construction activities; risks related to the Ebola crisis; and future unforeseen liabilities and other factors including, but not limited to, those listed under "Risk Factors" in the Company's Annual Information Form dated March 26, 2015, a copy of which is available on SEDAR at www.sedar.com, and in the Aureus Mining Admission Document, a copy of which is available at www.aureus-mining.com. Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking information. Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable law, Aureus disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.
With respect to forward looking information contained in this news release, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; interest rates and foreign exchange rates; mineral resource and mineral reserve estimates; geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral resources and mineral reserves) and cost estimates on which the mineral resource and mineral reserve estimates are based; the parameters and assumptions employed in the New Liberty Technical Report, (including but not limited to, those relating to construction, future mining and operating costs, processing and recovery rates, net present values and internal rates of return, timing for the commencement of production, tax and royalty rates, future gold prices, metallurgical rates, pit design, operations and management, grades, the base case analysis and the proposed budget for further exploration plans and objectives); the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; market competition; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities; the business of the Company including the continued exploration of its properties; the political environments and legal and regulatory frameworks in Liberia and Cameroon with respect to, among other things, the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities and the ability of the Company to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet its demand. Assumptions used in the preparation of such information, although considered reasonable by Aureus at the time of preparation, may prove to be incorrect.
Any mineral resource and mineral reserve figures referred to in this press release are estimates and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the mineral resource and mineral reserve estimates in respect of its properties are well established, by their nature mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource and mineral reserve estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
SOURCE Aureus Mining Inc.
For further information: Aureus Mining Inc., David Reading / Paul Thomson, Tel: +44(0) 20 7010 7690; Buchanan, Bobby Morse / Anna Michniewicz, Tel: +44(0) 20 7466 5000; Numis Securities Limited (Nominated Adviser and Joint Broker), John Prior / James Black / Paul Gillam, Tel: +44(0) 20 7260 1000; GMP Securities Europe LLP (Joint Broker), Richard Greenfield / Alexandra Carse, Tel: +44(0) 20 7647 2800