Red Back Mining Inc.: Mid Year Update
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/21/10 -- Red Back Mining Inc. (TSX: RBI) (the 'Company' or 'Red Back') is pleased to provide a mid year update.
Chirano, Ghana
Since completion of the plant expansion at the end of 2009, operations at Chirano have continued to increase towards optimum production from open pit and underground operations. Forecast production for the year remains on target (240,000 - 250,000 ounces) with significant increased production scheduled from the Akwaaba underground mine in the third and fourth quarters.
The Company recently reported a new ore reserve at the Paboase underground deposit of 920,000 ounces (News Release: July 19, 2010). This brings the total reported underground reserve at Chirano to 2 Million ounces. The new Paboase reserve demonstrates the significance of high grade underground discoveries at Chirano.
At Akwaaba the decline is now 260 metres below surface and has been developed for a length of 1.8 km. Stoping is ongoing on three levels with two levels under development. Mining will commence on these new two levels this quarter. The mining contractor has recently delivered four 55 tonne trucks which will enable Akwaaba to reach a full production rate of approximately 100,000 tonnes per month in the fourth quarter. The decline is scheduled to be completed in the first quarter of 2012, whereupon exploration drilling will recommence to test the depth extension of the Akwaaba high grade mineralization.
An initial underground reserve at Paboase was recently announced at 7.9 Million tonnes @ 3.6g/t gold, for 920,000 ounces (Resources: Indicated 7.73Mt grading 4.19g/t, Inferred 1.16Mt at 4.4g/t). The Reserve is based upon drilling to May 2010 and to a depth of 700 metres below surface. Decline development has commenced, with first ore to the plant scheduled for the fourth quarter of 2011. The addition of Paboase ore to the process plant will achieve an annual production rate at Chirano of 300,000 - 350,000 ounces by 2013.
Ongoing drilling since May 2010 indicates that the Paboase ore body continues to depth and has the potential for higher grades. Recent deep intercepts include:
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Section Hole ID From To Meters Au g/t Width
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90450 CHDD1527 782 797 15.0 5.76 4.5
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90500 CHDD1588 688 733 45.0 4.39 20
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90550 CHDD1572 694 735.9 41.9 7.48 13
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90600 CHRC1519DW3 718 772 54.0 7.53 14.5
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90650 CHRC1520DW2 696 714 18.0 7.94 7.0
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Exploration to depth at Paboase will recommence as the decline advances. The ore body is also being tested along strike to the north and south, with recent results including:
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Section Hole ID From To Meters Au g/t Width
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90300 CHDD1609 381.2 394 12.8 2.68 8.6
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90350 CHDD1598 305.4 331.5 26.1 4.32 12
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CHDD1617 203.3 225 21.7 4.39 14
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CHDD1604W1 591.3 596 4.7 14.62 2.5
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90400 CHDD1593 433 442 8.0 3.72 8
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CHDD1593W1 406.4 424 16.0 1.96 9
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CHDD1593W2 387.7 402 13.4 2.36 9
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CHDD1601 341.3 355 13.7 5.31 8.5
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CHDD1607 311.7 323 11.3 0.97 6.75
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General exploration at Chirano is now focused on testing the depth potential of the Chirano Shear on a systematic basis over a 10 km strike length, between and below the open pit operations on this structure. Five rigs are currently on site working on this program.
Tasiast, Mauritania
Production from dump leach operations at Tasiast continues to be affected by ongoing failures in the second waterline from the Company's bore field located 60 kilometers from the plant. The pipe failures appear to be caused by improper manufacture and/or transportation. Two sections of the pipeline are being replaced at an estimated cost of US$4.8 Million. The replacement is scheduled to be completed by mid fourth quarter. Full dump leach irrigation rates will be achieved by the end of the year. It is anticipated that 2010 forecast gold production at Tasiast will now be 205,000 - 215,000 ounces, a reduction of 15%. Accordingly, total Red Back gold production for the year is now forecast to be between 445,000 and 465,000 ounces, a reduction of 9% from original projections. Dump leach pad construction is continuing on schedule and these delayed ounces will be picked up in 2011.
In anticipation of commencing mining operations at the West Branch deposit (Greenschist Zone) the Company recently placed first orders for an expanded mining fleet. Two O&K RH340B 600 ton excavators and six CAT 793Ds (240 ton capacity) have been ordered. The initial shipment of new equipment is scheduled to arrive at site in the fourth quarter of 2010 with mining at West Branch then commencing in the first quarter of 2011. Further orders for additional diggers and trucks and associated ancillary equipment will be made over the coming months.
Ongoing exploration at West Branch is supporting the potential for a different operational plan at Tasiast. The Company is working with its consultants to optimise the CIL, Dump and Heap Leach processing capacities. Management expects to be in a position to go to the Board of Directors of Red Back with recommendations in this regard by the end of the first quarter of 2011.
Exploration is continuing at West Branch with 11 rigs currently drilling. The focus is infill drilling of the Greenschist Zone aimed at further expanding reserves. A further reserve update is on target for the end of the third quarter. Results continue to a show very strong mineralised system extending to depth. The holes reported in the table below lie outside the current resource:
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Section Hole ID From To Meters Au g/t
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70911 TA02360ARC 423 471 48 1.54
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TA05304RD 573 628 55 2.33
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70961 TA2360RC 438 499 61 3.69
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71011 TA02361RC 371 436 63 3.50
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71111 TA02369RC 292 370 78 2.95
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TA02363RC 318 363 45 1.37
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TA02362RC 347 426 79 2.75
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TA05004RD 464 525 61 2.42
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71161 TA02365RC 343 416 73 2.76
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TA02364RC 367 429 62 3.02
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71211 TA02370RC 276 354 78 2.48
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TA02367RC 306 388 82 3.97
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TA02366RC 399 449 50 1.96
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395 429 34 4.03
------- TA02289RC -----------------------------------------
459 479 20 3.33
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71261 TA02368RC 298 380 82 3.05
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TA02292RC 390 471 81 3.26
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71361 TA02293ARC 385 475 90 2.20
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71461 TA02298RC 302 404 102 2.73
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TA02299RC 270 368 98 2.98
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71511 TA05003RD 494 587 93 1.77
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TA05005RD 775 825 50 0.75
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71561 TA02295RC 303 399 95 2.68
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TA02296RC 332 431 98 2.81
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71711 TA02291RC 356 439 83 2.44
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71811 TA02287RC 372 437 65 1.53
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Note: True widths are +90% of drilled intervals.
As drilling extends to depth in this area, the Company is adding a further 10 diamond core rigs (for a total of 21 rigs at Tasiast) over the next 6 months to continue and accelerate definition of the ore body, much of which is likely to ultimately fall within an expanded open pit.
A four hole deep drilling program is underway at West Branch to test structural and grade controls of the Greenschist mineralization. The first hole has been completed and intersected Greenschist hosted mineralisation 660m vertically from surface and 500 metres down dip from the current pit design (5 million ounces). The first hole of this program (Hole TA05005RD) was successful in demonstrating the continuity of gold mineralization at depths considerably below the current Resource and Reserve. This hole returned an intercept of 50m grading 0.75g/t, suggesting that the ore body is showing a shallow southerly plunge at depth. It is interpreted that this first deep hole intersected the Greenschist Zone in a lower grade halo below higher grade mineralization. The second hole of this deep program is 75% complete.
Reconnaissance exploration is also continuing in other parts of Red Back's permit holdings. Reverse Circulation follow up of reconnaissance drilling to the north of the Tasiast resource has highlighted further extension to the main Tasiast trend.
The results listed below (near surface intercepts) define a 1.6km mineralised zone extending up to 2.3km north of the current resource.
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Hole ID From To Meters Au g/t
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TA04180RC 38 55 17 2.06
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TA04186RC 40 52 12 5.95
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TA04198RC 16 20 4 5.26
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TA04207RC 26 35 9 1.67
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TA04212RC 52 57 5 1.71
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TA04213RC 22 33 11 1.80
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TA04219RC 17 25 8 1.69
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TA04223RC 26 40 14 1.25
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TA04254RC 29 40 11 2.20
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TA04259RC 16 29 13 1.74
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TA04264RC 25 35 10 2.42
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TA04269RC 47 53 6 1.86
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TA04274RC 41 49 8 2.06
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TA04283RC 14 32 18 1.07
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TA04291RC 0 8 8 3.18
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TA04313RC 53 59 6 7.01
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TA04327RC 30 34 4 7.80
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TA04330RC 24 30 6 7.41
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TA04333RC 21 25 4 8.68
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TA04336RC 12 22 10 4.73
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Note: True widths are +90% of drilled intervals.
Infill drilling will now target this extension for conversion to Resource/Reserve.
Commenting, Richard Clark, President and CEO of the Company stated:
'The first half of 2010 has been extremely busy and successful for Red Back. The Tasiast Mine continues to grow towards world-class status and has attracted significant industry and market attention. We have been working quickly to outline the potential size of this deposit and are on track to significantly increase reserves during the second half of 2010. We are increasing the drill fleet at Tasiast to 21 rigs and are more than doubling the size of the on-site laboratory to handle the increased sample flow. It is anticipated that this will allow the Company to make a further expansion decision for Tasiast in early 2011.
Although we have experienced some problems with the second water pipeline at Tasiast, these have been identified and are being resolved. This issue has affected our forecast gold production for the year, but those lost ounces will be recovered in early 2011.
At Chirano, with an initial reserve at Paboase approaching 1 Million ounces and the development of the new underground mine underway, we move into the second half of 2010 aggressively exploring for the next underground deposit with 5 drill rigs operating.
Red Back remains in a commanding position going forward with significant growth in reserves, production and earnings expected, all underpinned by a clean and strong balance sheet.'
Second quarter results
Red Back will be will be reporting its financial results for the second quarter period ended June 30, 2010 before market open on Tuesday, August 3, 2010 (News Release: July 14, 2010).
About Red Back
Red Back is an unhedged African focused mid-tier gold producer. It owns and operates the Chirano Gold Mine in Ghana and the Tasiast Gold Mine in Mauritania and continues to expand the potential of those operations. In addition to its two mines, the Company holds an extensive exploration portfolio in West Africa.
The technical contents of this release have been reviewed by Hugh Stuart, BSc., MSc, a Qualified Person pursuant to NI 43-101. Mr. Stuart is the VP - Exploration of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Chirano samples are prepared and analyzed by fire assay using a 50 gram charge at the Analabs facility in Bibiani, Ghana and ALS Chemex in Kumasi, Ghana in compliance with industry standards. Tasiast samples are prepared and analyzed by fire assay using a 50 gram charge at the SGS facility at the Tasiast mine site and at Kayes in Mali 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/Analabs laboratories worldwide.
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 of Directors:
Richard P. Clark, President
Contacts:
Red Back Mining Inc.
Simon Jackson
VP-Corporate Development
604-689-7842
Red Back Mining Inc.
Sophia Shane
Investor Relations
604-689-7842
604-689-5452 (FAX)
www.redbackmining.com
