Maiden Reserve of 873,000 oz at New Liberty

February 2, 2012


2 February 2012

Aureus Mining Inc.




Maiden Reserve of 873,000 oz at New Liberty

Production to average 123,000 ounces per annum for first four years

Aureus Mining Inc. (“Aureus” or the “Company”) is pleased to announce a maiden reserve for its 100 % owned New Liberty Project in Liberia. The Reserve is based on completion of a National Instrument 43-101 (“NI 43-101”) compliant technical study, which includes an updated Resource statement, an open pit mine plan, operating and capital cost estimations, and an economic analysis.


· Reserve of 873,000 ounces grading 3.1 g/t within an optimized open pit with an eight year mine life and operating cash costs of US$ 632 per ounce of gold

· An average annual production of approximately 123,000 ounces for the first four years at a head grade of 3.7 g/t. Total recovered gold of 812,000 ounces

· Pre Tax NPV of US$ 260 million and IRR of 62% based on an average long term gold price of US$ 1,350/oz and an 8 % discount rate. The payback of the initial capital cost is under two years

· Initial capital costs of US$ 113.1 million include the 1.1Mt per annum plant, all infrastructure and pre-strip mining costs

· Strip ratio has decreased by 21 % to 14.9:1 in comparison to the previous preliminary economic assessment (“PEA”)

· Mineral Resources have been updated to 1.6 million ounces grading 3.6 g/t Au, which includes approximately 1.1 million ounces in the Measured and Indicated categories

· The current Reserve study forms the base case to the feasibility study which is expected to be published by 31 March 2012 following the completion of further optimisation studies on mining, power and metallurgical processing

· Plant commissioning is forecast to be completed in Q4 2013, with 2014 being the first full year of production

· Discussions are in progress with a number of leading financial institutions who have expressed a strong interest in providing debt financing for the New Liberty project

· Exploration work continues within the company’s contiguous property portfolio with results pending from multiple gold target which were drill tested in Q4 2011

· Potential to expand the resources around New Liberty and therefore utilize the new infrastructure for medium term production expansion

David Reading, Chief Executive Officer of Aureus, commented:

“Establishing a maiden Reserve at the New Liberty Project is a very positive step in the development of Liberia’s first commercial gold mine. The Reserve underpins the robust nature of the project as well as confirming Aureus’ long held belief on the significant upside of the project beyond the currently planned open pit mine. With a pre-tax NPV of US$ 260 million, using an average long term gold price of US$ 1,350/oz and an 8 % discount rate, Aureus is rapidly progressing in its strategy to become a new and substantial gold producer in West Africa.”

“To have achieved such a robust maiden Reserves and Resource upgrade in such a short time period, demonstrates the commitment, endeavour and support the Company receives from its shareholders, board, management and staff.”

Maiden Reserve for the New Liberty project

The NI 43-101 compliant technical study supporting the Reserve statement for the New Liberty gold project has been compiled by AMC Consultants Pty Ltd (“AMC”) with contributions from DRA Mineral Projects (Pty) Ltd (“DRA”) for metallurgical test work and processing and Golders Associates Ghana Ltd (“Golders”) . The Reserve technical report summarizes the geology, Resources and Reserves, mining and mine production schedule, metallurgy, process plant design, infrastructure design including tailings management facility, capital and operating cost estimates, financial modelling and the key results of the environmental baseline studies. The Reserve estimate was undertaken by AMC in accordance with the requirements of NI 43-101.

The Reserves support an open pit operation with an average annual production rate of 1.1 million tonnes of ore per annum over an eight year production life. Plant production over the first four years averages 123,000 ounces per annum. All of the Reserve at New Liberty is located within 220 meters of surface and is extractable by open pit mining methods.

The total Reserve estimate of ounces of gold grading 3.1 g/t is comprised of 731,000 tonnes grading 4.3 g/t (for 102,000 ounces) in the Proven category and 7,985,000 tonnes grading 3.0 g/t (for 771,000 ounces) in the Probable category, as detailed in the table below. The Proven and Probable Ore Reserves are contained within open pits of depths between 180 and 220 metres below surface. The ore body is still open at depth and to the west.

The reported Reserve estimate is shown in the following table:

Reserve Classification Tonnes Gold (g/t) Gold Koz
Proven 731,000 4.3 102
Probable 7,984,000 3.0 771
Total Proven and Probable 8,716,000 3.1 873


1. The Ore Reserve was estimated by construction of a block model within constraining wireframes and based on Measured and Indicated Resources

2. The Ore Reserve is reported at a cut-off grade of 0.64 g/t Au and ore below 1 g/t cut off is stockpiled for processing at the end of the mine life

3. A dilution skin of 0.5m added and a minimum mining width of 2.5m was applied

4. The Ore Reserves were estimated based on the updated NI 43-101 Mineral Resource as stated in this same study

5. The cut-off grade and pit optimisations were based on a gold price of US$ 1,250 per ounce

6. A 93 % metallurgical gold recovery was used

  1. Due to rounding, some columns or rows may not add up exactly to the computed totals

Study Summary

A life of mine study summary is outlined below. The mine plan was developed using a cut-off grade of 0.64 g/t and a gold price of US$ 1,250 per ounce.

The key technical, operational and financial information has been summarised in the following table:

Fresh Ore Mined Mt 8.4
Oxide Ore Mined Mt 0.3
Waste Mined (including pre-strip) Mt 129.5
Total Material Mined Mt 138.2
Pre-Strip Mt 11.0
Total Mill Feed Processed Mt 8.7
Open Pit Mining Life Years 8
Contained Gold Koz Au 873
Recovered Gold Koz Au 812
Average Strip ratio Waste/Ore 14.9:1
Average Head Grade g/t 3.1
Average Gold Recovery % 93
Average Annual Tonnes Processed Mtpa 1.1
Average Annual Production Y1-Y4 oz Au / yr 123,000
Average Annual Production Y5-Y8 oz Au / yr 80,000

Mining plan

The New Liberty project will comprise an open pit mining operation extracting ore at a nominal rate of 1.1 Mtpa with an operating life of eight years. The open pit will comprise two adjacent and interconnecting pits.

The mine design aspects were completed by AMC and comprised pit optimisation using Whittle-4X based on the Measured and Indicated Resources. A staged mining sequence was developed for production scheduling.

The mining schedule sees the operation produce a total of 8.7 Mt of ore grading 3.1 g/t with an associated 129.5 Mt of waste with an average life of mine stripping ratio of 14.9:1 over a life of 8 years. The pit optimisations were undertaken at US$ 1,250/oz gold and a metallurgical recovery of 93 %.

A steady state mining rate is planned after the initial period of waste pre-stripping at an annualised plant feed rate of 1.1 Mt. The annual waste mining rate is 21.5Mt for the first five years followed by 6.9Mt and then 4.3Mt for the last year, which results in an average waste mining rate of 16.9 Mt. It is planned to pre-strip an estimated 11.0 Mt of waste at a cost of US$ 24.3 million, which is included in the initial mine capital cost budget.

Metallurgy and Mineral Processing


The metallurgical design of the process plant has been based on review of the testwork undertaken by the previous owners, African Aura, and new metallurgical testwork undertaken by Mintek of South Africa, supervised by DRA to validate recovery and operating results as part of the DRA feasibility design for the project.

The ore is non-refractory and is free milling. As part of the feasibility study, a process design is planned for based on the carbon-in-leach process (CIL) with a minimum gold extraction recovery of 93 %.

Mineral processing

The CIL plant is designed with a nominal milling capacity of 1.1 Mtpa based on fresh rock hardness factors and will allow for higher throughput when treating soft oxide material.

The process includes a multi-stage crushing circuit which feeds a ball mill circuit in closed loop with hydro-cyclones, a gravity circuit, and a (six) stage CIL tank circuit. The process plant design allows for a gravity recovery in excess of 45 %.

The process plant is to be located proximal to the eastern end of the open pit with a maximum haul distance of some 2.5 kilometres.

Infrastructure and Capital Costs

The initial capital cost of US$ 113.1 million for the project includes the design and development of the processing plant, mining establishment and pre-strip, general mine infrastructure and power supply, tailings dam construction, creek diversion and general infrastructure.

Capital costs are summarised as follows:

Category US$ M
Processing plant 62.5
Mine Establishment & pre-strip 27.7
Infrastructure and power supply 14.5
Tailings dam construction 3.3
Creek diversion 5.1
TOTAL Initial Capital 113.1

Sustaining capital includes the sequential development of the tailings dam facility. The mine closure costs cover environmental aspects at the mine and process plant sites. Mining operations will be undertaken on a contract basis. The cost of the mining fleet equipment is repayable to the contractor over the life of the project and is therefore treated as a loan.

Category US$ M
Sustaining capital and mine closure 10.8
Mining Fleet over LOM 37.8

Operating cash costs

US$ M US$/oz produced
Mining 337.8 386
Processing 166.3 204
General and Administration 33.9 42
Total 538.0 632

The increased cost of diesel is the key driver behind the cash cost increase since the PEA

Economic Analysis

The economic analysis was undertaken on a pre-tax basis and pre Government free and carried interest and utilises an average gold price of US$ 1,350/oz over the eight year life.

Gold Price US$/oz 1,350
NPV pre-tax @ 8% US$M 260
IRR pre tax % 62

The Government of Liberia corporation tax is proposed at 25 % and the Government has a net smelter royalty of 3 % The Government of Liberia holds a 10 % free and carried interest in the project which is payable after all capital cost and project sunk cost recoveries.

A sensitivity analysis was undertaken on the project economics and the results are set out below:

Factor Change Effect on NPV
Gold Price +10% + 31%
Operating Costs +10% -15%
Capital Costs +10% -5%
Ore Grade -10% -31%

Project Development Plan

Post completion of the Feasibility Study, finance is required to be raised in order to fund the construction and development of the New Liberty project. The project development and construction is planned to commence in Q3 2012, with a 12 month construction period, with production commissioned in Q4 2013. The first full year of production is scheduled to be 2014.

The New Liberty project has a mining licence that is valid for 25 years. An environmental and social impact assessment is nearing completion and will be submitted to the Environmental Protection Agency of Liberia at end of Q1 2012. The environmental and social impact assessment is the final outstanding permit required before full construction can commence.

2012 Exploration Programme

The Company has a multi-phase exploration programme for 2012, from target-generative, regional work to focussed drilling programmes at targets with encouraging existing exploration results. The total drilling budgeted for the year is 30,000m. This drilling will be centred on three main areas:

· Near-mine targets as defined by airborne and ground geophysical studies and soil anomalies

· The Leopard Rock-Ndablama-Gondoja gold corridor, well-defined by soil anomalies

· Weaju, where intercepts already include 33g/t over 24 metres

Regional, target-generative programmes are also in progress to ensure the Company has a healthy pipeline of projects. The work planned for the year includes the airborne magnetic and radiometric survey over the entire licence area, which is currently 80% complete. Other planned work includes soil geochemistry programmes and ground geophysical studies around New Liberty and elsewhere in the licence area.

Updated Resource at New Liberty

An updated Mineral Resource estimate was undertaken by AMC in accordance with the requirements of NI 43-101. It incorporates all the results from drilling as at 9 December 2011, being 375 holes for 57,830 meters and was calculated on the basis of a 1.0 g/t cut-off grade.

The total Resource estimate of 1.57 million ounces of gold grading 3.58 g/t is comprised of 672,000 tonnes grading 4.74 g/t (for 102,000 ounces) in the Measured category, 8,666,000 tonnes grading 3.53 g/t (for 984,000 ounces) in the Indicated category, and 4,310,000 tonnes grading 3.5 g/t (for 483,000 ounces) in the Inferred category, as detailed in the table below. The Measured and Indicated Resources are located generally within the first 200 metres below surface. The Inferred Resource remains open at depth.

The new Resource estimate, reflecting predominantly infill drilling, when compared on a global basis with the previous estimate of December 2010 has approximately 1 % less grade and 5 % more tonnes, which results in an increase of 57,000 ounces of gold.

Mineral Resource Tonnes (Kt) Average Grade (g/t) Contained Gold (koz)
Measured 672 4.74 102
Indicated 8,666 3.53 984
Subtotal M+I 9,338 3.62 1,086
Inferred 4,310 3.50 483


1. CIM definitions were used for Mineral Resources

2. A cut-off grade of 1.0 g/t Au is applied for all zones

3. Due to rounding, some columns or rows may not add up exactly to the computed totals

4. The Mineral Resource is inclusive of the Mineral Reserve

Resource estimation parameters

– The estimates of mineral Resources were calculated in accordance with NI 43-101 and carried out by Chris G Arnold BSc (Hons), MSc, MAusIMM (CP) of independent consultants AMC.

– A total of 375 diamond drill holes have been completed at New Liberty for 57,830m, the majority of which have been utilised in the Mineral Resource estimate. The drilling has been carried out with holes typically inclined at -60°, resulting in intersection angles generally being 75 % of the true width. Down hole surveys have been carried out on the majority of the holes and core recovery averages over 90 %

– The Resource estimation has been based on interpretations using integrated geological and grade information recorded from diamond core logging and assaying. The database was subject to a series of standard validation procedures, and approximately 15 % of the data was randomly selected for validation against source information.

– The interpreted mineralised zones present as strongly planar shapes striking generally slightly south of east and dipping between 60° and 80° to the south. The geological and mineralisation shapes were formed into solid triangulated wireframes, which were filled with model cells based on parent cell XYZ dimensions of 10m x 5m x 10m for more densely drilled areas and 20m x 10m x 20m elsewhere. Cells were permitted to reduce to 5m, 2.5m and 10m in the X, Y and Z dimensions respectively in order to better represent the geometry of the mineralisation. The model was coded to reflect individual mineralised zones, as well as to distinguish between weathered and unweathered material, using an interpreted top-of-fresh surface based on geological logs. A triangulated surface of topography was used to constrain the upper bounds of the model.

– Samples were coded by mineralisation zone and weathering in a manner consistent with the cell model. Statistical analysis was conducted on one metre composites within different subsets extracted from the coded sample file (e.g. by mineralisation zone).

– Statistical analysis was used in conjunction with a spatial assessment of high grade samples to determine individual high grade cap values for each mineralised zone, for use during grade estimation. Variographic analysis was conducted on all but one of the mineralised zones.

– Gold grade estimation was conducted from one metre composites, using ordinary kriging in those zones for which variogram parameters were generated. For one small zone and the narrow weathered horizon, inverse distance squared weighting was applied.

– The Resource model was populated through grade interpolation into parent cells, under hard-bounded zonal control, using mostly 35m x 60m x 10m (strike / dip / cross plane) search ellipsoids, aligned in the local plane orientation of each zone.

Quality assurance / quality control (“QA/QC”) and chain of custody

– QA/QC analyses for the period from 2005 to 2011 were undertaken by AMC in preparation for Resource estimation. The progressive introduction of QA/QC procedures included the standard implementation of field duplicates (quarter core and crushed), blank samples, standards and laboratory repeats, as well as specific programmes of re-assaying and umpire laboratory assaying.

– Diamond drilling at New Liberty was supervised by the Company’s geologists who also conducted and managed the preparation, logging and sampling of core. In recent campaigns, bulk density measurements were taken from a sample in every core tray.

– During the sampling, quality control standards and blanks samples were inserted at pre-determined intervals. For all holes drilled since 2009, samples were sent from site directly to the OMAC sample preparation facility in Monrovia. OMAC is accredited by Irish National Accreditation Board to ISO 17025 and fire assay is included in the Schedule of Accreditation.

– Pulp weights sent from Liberia for analysis were between 100 and 200g.

– Aqua regia digests are analysed for gold using a Varian AA Spectrometer.

Contact Information

Aureus Mining Inc.

David Reading / Jeremy Cave

Tel: +44 (0) 20 7257 2930


Bobby Morse / James Strong

Tel: +44 (0) 20 7466 5000

Evolution Securities

Nomad: Neil Elliot / George Price

Joint Broker: Chris Sim

Tel: +44(0) 20 7071 4300

RBC Capital Markets

Martin Eales / Richard Hughes

Tel: +44 (0) 20 7653 4000

Technical Report

The entire Study for the Reserves and Resources will be available within 45 days at and on the Company’s corporate website


Qualified Person

The estimates of mineral Resources were calculated in accordance with NI 43-101 and carried out by Chris G Arnold BSc (Hons), MSc, MAusIMM (CP) of independent consultants AMC. The Reserve Study was prepared by Mr M Staples of AMC, a Qualified Person, for the purposes of the study, under the standards set forth by National Instrument 43-101 “Standards of Disclosure for Mineral Project”, of the Canadian Securities Administrators (“NI 43-101”), and he has also reviewed and approved the contents of this news release, as applicable

About Aureus Mining

The Company’s assets include the New Liberty gold deposit in Liberia (the “New Liberty Gold Project”), which has an estimated Reserve of 873,000 ounces of gold grading 3.1 g/t and an estimated Measured and Indicated Mineral Resource of 1,086,000 ounces of gold grading 3.6 g/t and an estimated Inferred Mineral Resource of 483,000 ounces of gold grading 3.5 g/t. A technical update for the New Liberty gold project was released in February 2012, derisking and building on the robust preliminary economic assessment (“PEA”), filed in December 2010. This update outlined an improved pre-tax NPV of US$ 260 million based on a US$ 1,350/oz. gold price and a discount rate of 8 %, with an 8 year mine life and production of 123,000 ounces per year modelled for the first four years.

The New Liberty Gold Project is located within the Bea Mountain mining license which covers 457 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts the proximal gold targets of Ndablama, Weaju, Silver Hills and Gondoja, which are the focus of exploration programs during 2012.

The Company also has gold assets within exploration properties in Cameroon.

Forward-looking Statements

This press release includes certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding the future plans and objectives of the Company, are forward-looking statements that involve various known and unknown risks and uncertainties as well as other factors. Such forward-looking statements are subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including delays in obtaining or failure to obtain required regulatory approvals. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Any forward-looking statements speak only as of the date hereof and, except as may be required by applicable law, Aureus disclaim any obligation to update or modify such forward-looking statements, either as a result of new information, future events or for any other reason.

Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the TSX) accepts responsibility for the adequacy or accuracy of this release.