Red Back(RBI.TO)'s Chirano pouring gold in October
Red Back Mining expects gold production in October
2005-09-07 14:42 ET - News Release
Mr. Richard Clark reports
RED BACK CHIRANO GOLD MINE UPDATE
Red Back Mining Inc. has released an update on the development of its Chirano gold mine located in Ghana.
The primary crusher at Chirano started operations on Sept. 6, 2005. This will immediately be followed by the commissioning of the SAG and ball mills. Commercial gold production is anticipated in early October, 2005.
As at Aug. 31, 2005, the construction status at Chirano is as follows.
Plant and infrastructure:
* project design and engineering are 100 per cent complete;
* all major construction contracts awarded;
* procurement is 98 per cent complete, with the focus now on spares and logistics;
* concrete work is complete;
* plant offices are complete
* leach tanks are complete;
* ball mill, SAG mill and motors are in place, with commissioning scheduled for first week of September;
* primary crusher is complete with commissioning in the first week of September;
* overland power line is connected;
* water storage facility is complete and ready for plant start-up;
* site earthworks complete;
* tailings storage facility main embankment complete;
* tailings and water overland piping are 70 per cent complete; and
* commissioning manager is on site and precommissioning has commenced.
Mining
Mining operations at the Obra, Obra South and Tano pits at Chirano are ahead of schedule. The mined ore currently stands at 297,996 tonnes containing 16,765 ounces of gold. Grade control and mining continue to show a material improvement over projections in the bankable feasibility study, with an overall 18-per-cent increase in ounces to date.
COMPLETED ORE BLOCKS
August, 2005
Density Tonnes g/t Ounces
Depleted
Explor-
ation
reserve
Obra 1.72 265,326 1.66 14,136
Tano 1.72 1,423 1.53 70
---- ------- ---- ------
Total - 266,749 1.66 14,207
==== ======= ==== ======
Mined
Grade
control
Obra 1.92 291,575 1.75 16,448
Tano 1.57 6,421 1.54 317
---- ------- ---- ------
Total - 297,996 1.75 16,765
==== ======= ==== ======
Variance
% Difference
Tonnes g/t Ounces
Obra 10% 6% 16%
Tano 351% 0% 352%
--- - ---
Total 12% 6% 18%
=== = ===
With continued mining and an extensive continuing grade control drilling program, a reconciliation of reserves will be completed and restated by year-end against revised gold pricing; the BFS was calculated on a gold price of $375 (U.S.) per ounce.
Capital cost
Nearing completion, the capital cost of Chirano has remained at $73.4-million (U.S.). A recently announced private placement of $11.9-million (see news in Stockwatch July 11, 2005) completed the necessary financing for commencement of production at Chirano.
Rick Clark, president of Red Back, commented: "We're ever closer to our first gold pour. Early October should see the start of commercial gold production from the Chirano mine. This project keeps getting better; not only has the development gone smoothly, but our exploration and resource definition drilling has hinted strongly at the expansion potential of the mine. High-grade gold has been intersected below and on strike with the known Chirano deposits, a scenario typical of other gold mines in the region as they are developed and continue to grow."
The Chirano gold project is located in Ghana, with proven and probable reserves of 17.8 million tonnes grading 1.9 grams per tonne gold for approximately 1.09 million ounces contained gold (RSG Global, December, 2004). There is significant resource and reserve upside through both brownfields and greenfields exploration. The Chirano project is within the Bibiani gold belt 25 kilometres along strike from AngloGold Ashanti's (over-five-million-ounce) Bibiani gold mine. In addition to Chirano, the company retains one of the largest mineral land positions in Ghana (5,000 square kilometres) and is systematically exploring this landholding.
The technical contents of this release have been reviewed by Ross Ashton, BSc, FAusIMM, a qualified person pursuant to National Instrument 43-101. Mr. Ashton is a director of the company. Samples are prepared and analyzed by fire assay using a 50-gram charge at the Analabs facility in Bibiani, Ghana, 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 Analabs laboratories worldwide.
