Red Back Mining Inc.
TSX: RBI
Jun 12, 2008 12:56 ET
Red Back Mining Inc.: Tasiast Update
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 12, 2008) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to provide an update on developments at its Tasiast Gold Mine ("Tasiast") in Mauritania.
Significant Increase in Resources at West Branch
In the last four months drilling has concentrated on the West Branch prospect, 2km south of the Tasiast processing plant. Since the release of the Tasiast Resources (News Release: February 26, 2008) a further 85 reverse circulation holes totaling 11,317m have been drilled. This program was aimed at infilling and extending coverage over the 1km strike extent of the West Branch included in the previous resource (Indicated resource 2.1Mt grading 1.5g/t for 98koz, inferred resource 2.6Mt grading 1.7g/t for 130koz).
The new mineral resource estimate for West Branch as calculated by Hellman and
Schofield Pty Ltd, is shown below:
----------------------------------------------------------
Indicated Inferred
------------------------------------------------
Cut-off Mt Au g/t koz Mt Au g/t Koz
----------------------------------------------------------
1.0 3.35 1.53 165 3.24 1.61 167
----------------------------------------------------------
Note: Numbers may not add due to rounding
1. The resources are estimates of recoverable tonnes and grades using
Multiple Indicator Kriging with block support correction into 15 metres
(East) by 25 metre (North) by 5 metre (Elevation) model blocks and
assuming smallest mining unit for ore selection in mine grade control of
3 metres (East) by 5 metres (North) by 2.5 metres (Elevation).
2. Measured resources lie in areas where drilling is available at a nominal
25 x 25 metre spacing, Indicated resources occur in areas drilled at
approximately 25 x 50 metre spacing and Inferred resources exist in areas
of broader spaced drilling.
3. Gold estimation and model blocks were constrained within geologically
derived wireframes.
At a 1g/t cut off, the recent drill program has increased the West Branch Indicated Resource by 68% and Inferred Resource by 26%. Total resources at Tasiast are now:
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Measured Indicated Measured + Indicated Inferred
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Cut Au Au Au Au
-Off Mt g/t Oz Mt g/t Oz Mt g/t Oz Mt g/t Oz
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1.0 10.83 2.47 0.86 16.36 2.02 1.06 27.19 2.20 1.92 9.49 1.93 0.59
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Note: Piment Zone as at 31 December 2007, West Branch updated June 2008.
Exploration at Tasiast is ongoing towards further converting Inferred and discovering new resources.
Positive Leach Testing of Low Grade Material
Ongoing test work at Tasiast is showing that lower grade resource ounces may be recoverable by conventional "dump" or "heap" leaching. This would have a positive impact on reserves, annual production and economics at Tasiast.
Initial column tests have been conducted on oxide ball mill feed (-20mm) and RC chips (66% -1mm) from the Piment Zone, where mining is ongoing. Recoveries achieved were 82.3% and 89.4% respectively. Based upon these results two pilot dump leach pads have been constructed at site using lower grade material.
The first pad, containing an estimated 1,648 tonnes of oxide material at 1.30 g/t, has been under leach for 22 days with an indicated recovery of 50.6% achieved to date. The second pad, comprising an estimated 2,692 tonnes of oxide material grading 1.13g/t, will commence leaching by the end of June. In parallel with this on-site testing, samples are also being sent to Kappes Cassiday Associates in the USA for independent confirmation.
These preliminary results indicate that the oxide material tested leaches rapidly and is very amenable to dump and heap leaching. A core drilling program will commence in June to provide representative samples from other deposits at Tasiast, including West Branch.
A heap/dump leaching option at Tasiast would have a significant and positive impact on operations. The table below shows the increase in resources at Tasiast at lower cut off grades:
Tasiast Resources remaining at December 2007.
----------------------------------------------------------------------------
Measured Indicated Measured + Indicated Inferred
-----------------------------------------------------------------------
Cut Au Au Au Au
-Off Mt g/t Oz Mt g/t Oz Mt g/t Oz Mt g/t Oz
----------------------------------------------------------------------------
0.3 21.53 1.54 1.07 49.38 1.06 1.68 70.92 1.21 2.75 36.87 0.92 1.08
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0.5 17.62 1.80 1.02 36.11 1.30 1.51 53.73 1.46 2.53 24.63 1.17 0.93
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0.8 13.06 2.20 0.92 21.98 1.73 1.22 35.05 1.91 2.15 13.40 1.63 0.70
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1.0 10.83 2.47 0.86 16.36 2.02 1.06 27.19 2.20 1.92 9.49 1.93 0.59
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Note: Piment Zone as at 31 December 2007, West Branch updated June 2008.
Commenting on the leaching results to date, Richard Clark, President and CEO of the Company, stated:
"We are delighted with the initial results from the heap and dump leach test work. In addition to the higher grade ore which is and will be processed through the CIL plant, the Tasiast Project contains vast quantities of lower grade material. Much of this material is currently classified as waste in the mining schedule. With continued positive results from our ongoing test work, we are optimistic that commercial heap/dump leaching of resources between 0.3 g/t and the current open pit cut-off grade of 0.8 g/t could commence before year end. The effect of this would be to significantly increase reserves, annual production growth and to lower cash operating costs."
Tasiast Goes Owner Mining
The Company is also pleased to announce that it has reached agreement with its mining contractor, Sanchez y Lago of Spain, to purchase the on site mining fleet at Tasiast. The fleet is in excellent condition being in new or near new condition. Closing has occurred and Tasiast has taken ownership of the mining fleet and related infrastructure effective June 1, 2008.
The main catalyst for this decision was to reduce the Company's foreign exchange exposure to Euros. The Company expects to realize mining cost savings of approximately 30% over the mine life by taking control of mining operations. The purchase was funded out of treasury.
The independent Resource estimate reported herein was undertaken by Nic Johnson (Member of the Australian Institute of Geoscientists) of Hellman and Schofield Pty. Ltd with more than five years experience in the use of geostatistics for estimation of recoverable resources in gold deposits. For the purpose of reporting under National Instrument 43-101 Mr. Johnson is regarded as a Qualified Person.
The technical contents of this release have been reviewed by Hugh Stuart, BSc., MSc, a Qualified Person pursuant to NI-43101. Mr. Stuart is the VP - Exploration of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Samples are prepared and analyzed by fire assay using a 50 gram charge at the SGS facility at the Tasiast mine site in compliance with industry standards. Field duplicate samples are taken and blanks and standards are added to every batch submitted. Selected samples from this lab are check assayed each month at other SGS laboratories worldwide.
About Red Back
Red Back Mining Inc. is an unhedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana (90% interest) and the Tasiast Gold Mine in Mauritania (100% owned). Major plant expansions at both Chirano and Tasiast have commenced. The Company is expanding its current operations through development of the Akwaaba Deeps underground mine and an aggressive exploration program to increase its resource and reserve base at both Chirano and Tasiast.
This News Release contains forward looking statements which are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements. The Company does not intend to update this information and disclaims any legal liability to the contrary.
On Behalf of the Board,
Richard P. Clark, President and CEO
For more information, please contact
Red Back Mining Inc.
Simon Jackson
VP-Corporate Development
(604) 689-7842
or
Red Back Mining Inc.
Sophia Shane
Investor Relations
(604) 689-7842
Website: www.redbackmining.com
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