News ReleasesAXMIN improves the PASSENDRO GOLD PROJECT
Toronto, Ontario – March 17, 2009 AXMIN Inc. (AXM-TSX Venture) is pleased to report on the positive results of a Study to review the April 2008 Bankable Feasibility Study (“BFS”) at Passendro Gold Project in the Central African Republic (“CAR”), which considers a reduction in the initial size of the project in light of the current project finance and economic climate. By reducing the project throughput to an average of about 1.3 million tonnes per annum (“tpa”) (average 100,000 oz per annum) the initial capital cost (excluding working capital of US$2.1 million) is reduced by some 35% to US$127 million, project payback remains at just over two years and the life of the project nearly doubles to 11.5 years. Meanwhile the total cash operating cost increases by approximately 14% to US$431/oz whilst Net Present Value (“NPV”, 5% discount rate) and Internal Rate of Return (“IRR”) at a US$750/oz gold price remain very attractive at US$135 million and 27% respectively. At US$900/oz the NPV and IRR increase to US$244 million and 41% respectively. President and Chief Executive Officer Mario Caron comments “We considered it prudent to evaluate the Passendro Gold Project at a reduced scale given the inherent status of project finance in the current economic climate. We are very pleased to be able to demonstrate that the project remains robust at this scale still with a short payback period. There is also the added benefit of an overall attractive risk profile as mine life is increased and the construction period timeline reduced. Higher grade feed in the first four years allows for production levels averaging some 125,000 oz per annum with the option to subsequently expand the plant to handle lower grade ore and any additional resources that may be added through exploration across this very productive Gold Belt. The Study has concluded that the re-configured project forms an attractive option to that described in the BFS and as such AXMIN will consider accordingly. Meanwhile we continue to progress discussions with the CAR Government regarding the Mining License application.” The Study was undertaken by independent engineering company SENET (Pty) Ltd of South Africa (“SENET”), and incorporating a section on mining completed by SRK Consulting (UK) Ltd. (“SRK”) and as with the BFS utilises the mineral resource that was previously reported (press release March 27, 2008) in accordance with National Instrument 43-101 Standards for Disclosure for Mineral Projects. The analysis has been undertaken to a +/- 25 to 30% level of accuracy using costs and exchange rates applicable to end of the fourth quarter 2008 and using a US$750/oz gold price. Heavy fuel oil (“HFO”) and diesel was priced at the equivalent of US$80/bbl oil.
Note: All financial analysis is based on 100% ownership Mining These revised volumes form the basis of the mine plan using the geotechnical data; pit slope angles, mine layout and waste dump areas as described in the BFS. Similarly working times and patterns, drill and blast variables, and working practices remain unchanged. The cut off grade used in the Study are variable dependent on ore type (oxide, transition or sulphide) and source area and range from 0.5-1.2 g/t Au, which is similar to those of the BFS. Conventional open pit mining techniques using shovel-truck methods are proposed to provide plant feed at a rate of between 1.5 million (oxides) or 1.0 million (sulphides) tonnes per year, with a life of mine strip ratio of about 7.5:1. It is envisaged in this Study that the mining function will be carried by the mine operator although in practice there may be improved opportunities to utilise a mining contractor. Processing & Infrastructure The process route remains similar to that described in the BFS, albeit at a reduced scale. The reduced throughput allows for modifications to the crushing circuit with attendant significant reductions in civil engineering, and to the milling-gravity circuit where the SAG-Ball Mill combination has been reduced to a Crush-Ball configuration, with modifications to the gravity section to enhance recovery of free gold. Infrastructure remains essentially unchanged compared to the BFS, other than a reduction in water storage and start-up scale of the tailings dam, as well as simplification of mine site buildings and decrease in installed power to around 7.5 MW. Assuming a “soft start” approach which would include some pre-engineering, followed by early ordering of major equipment and site preparation, it is possible that the construction time for the re-configured project could be significantly reduced from the near 24 month term of the BFS to about 12 months. Capital Costs
Operating Cost Outlook An increase in Indicated Resource could lead to better economics, giving potential for an increase in mine life, or production, or profile and as such an addendum to the BFS incorporating the resource update and the reduced throughput scenario would be undertaken as soon as the Mining Licence is awarded. Qualified Persons Sean Cremin, Bsc Mining Eng (Hons), MIMM, Principal Mining Engineer is a Qualified Person under the National Instrument 43-101, and is the SRK person responsible for the Passendro Gold Project mineral reserve calculation. Neil Senior, (Joint Managing Director, SENET), Pr.Eng, MSc, Fellow Member of the Southern African Institute of Mining & Metallurgy, is the SENET person responsible for the Passendro Gold Project Study. About AXMIN For additional information please contact AXMIN Inc.:
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