UPDATE ON NEW LIBERTY OPERATIONS
October 20, 2015Back
20 October 2015
Aureus Mining Inc.
TSX : AUE
AIM : AUE
UPDATE ON NEW LIBERTY OPERATIONS
Aureus Mining Inc., (“Aureus” or the “Company”), the TSX and AIM listed West African Gold Producer, reports that gold production at the New Liberty Gold Mine has temporarily stopped due to a mechanical failure within the secondary crusher.
- A mechanical failure has occurred within the secondary crusher, resulting in a temporary shutdown of the New Liberty process plant.
- A mobile crusher has been sourced in country and it is currently being transported by road to New Liberty. It will be on site by 23 October allowing crushing and processing operations to re-commence as quickly as possible.
- DRA Mineral Projects (“DRA”) the Engineering, Procurement, and Construction Management contractor (“EPCM”) and specialist technicians from the Original Equipment Manufacturer (“OEM”), have mobilized to site to assess the damage and repair the secondary crusher .
- Following an initial assessment by the OEM, all key tools, spares and ancillary equipment are currently being expedited to site to allow the completion of the repair work. It is anticipated that all necessary repair work can be completed on site by the OEM by 31 October.
- Mining operations are continuing as planned throughout the plant stoppage to increase ore stockpiles. The Company is also undertaking other additional preventative maintenance programmes across the process plant.
- Since first gold sales began, the Company has made eight shipments of gold doré from New Liberty, resulting in sales of approximately 10,000 ounces of gold.
- Following the repair of the secondary crusher the Company will continue to work towards declaring Commercial Production, and management expect that this will be achieved by year end.
Commenting on the mechanical failure David Reading, President and Chief Executive Officer of Aureus Mining, said:
“The team at Aureus has reacted quickly to the mechanical failure of the secondary crusher, which happened last week. Though this is a challenging development during what are the early stages of the ramp up of the New Liberty Gold Mine to Commercial Production, we believe that the installation of a temporary solution whilst the secondary crusher is being repaired will result in only a few days of lost gold production. I look forward to updating shareholders on the progress of this solution over the coming days.”
Background to the Technical Issue
Early last week a mechanical failure occurred within the secondary crusher resulting in the temporary suspension of processing activities at the New Liberty process plant. The Company’s operational team are working with DRA, the EPCM contractor, and specialist technicians from the secondary crusher’s OEM, who have mobilized to site to assess the damage and repair the secondary crusher.
Following an initial assessment by the specialist OEM technician, all required key tools, spares and ancillary equipment have been sourced and are currently being expedited to New Liberty to allow the OEM to undertake the repair work. The OEM expects to complete this repair work and have the secondary crusher fully operational by 31 October.
To recommence production as quickly as possible, a mobile crusher, with a capacity of 200 tonnes per hour, has been sourced in country and is currently being transported by road from Yekepa to New Liberty to cover the intervening downtime period, and allow for crushing and stockpiling operations to continue whilst the secondary crusher is undergoing repair. It is anticipated that this temporary crusher will arrive at New Liberty by 23 October and be operational shortly afterwards. Following the repair of the secondary crusher, the mobile crusher will be retained for a period of time to provide additional flexibility during the continued ramp up of operations.
The Company believes that this temporary shutdown in processing activities will not severely impact production levels but may halt gold production for up to two weeks. During this time, the Company plans to continue with mining operations to increase its ore stockpiles. The Company is also taking the opportunity to undertake other additional preventative maintenance activities across the process plant that were scheduled to be undertaken later in 2015.
During the process of commissioning and ramping up the New Liberty process plant the Company has made eight shipments of gold doré from New Liberty, resulting in sales of approximately 10,000 ounces of gold. Following the repair of the secondary crusher, the Company will continue to work towards the achievement of Commercial Production, and although now delayed, management expects this will be achieved by year end.
The first repayment under the Company’s debt facilities is not due until January 2016, and providing the plant now moves smoothly through the remaining commissioning phase to steady state design capacity, cash flow from operations in Q4 will be sufficient to meet this obligation.
A further update will be provided to shareholders in due course.
|Aureus Mining Inc.
David Reading / Paul Thomson
Tel: +44(0) 20 7010 7690
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
Richard Greenfield / Alexandra Carse
Tel: +44(0) 20 7647 2800
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 commercial 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.