Gold production UP 19% cost down 20%Intrepid Reports Operating Activities for the Quarter Ended March 31, 2007
Apr 30, 2007 9:52:00 AM
TORONTO, ONTARIO -- (MARKET WIRE) -- 04/30/07 -- Intrepid Mines Limited (TSX: IAU)(TSX: IXN)(ASX: IAU), an international gold and silver production, development and exploration company, reports operating activities for the quarter ended March 31, 2007. All dollar figures are in United States dollars unless otherwise indicated. Intrepid today filed its Activities Report for the quarter ended March 31, 2007 which is available on the Intrepid website www.intrepidmines.com and at www.asx.com.au. A summary of that report is provided below.
OVERVIEW
- Gold production 17,494 ounces, up 19 percent from the prior quarter and 98% of mine plan record stope production
- Site cash costs $361 per ounce, 20 percent lower than the prior quarter and 99% of mine plan
- Paulsens resources and reserves updated in February 2007 resulting in increases to both categories
- Positive feasibility study completed (see press release dated March 5, 2007)
- Continuing progress in exploration activities
"We are pleased at the turnaround in performance at our Paulsens Gold Mine and continue programs to optimize mining operations with a view to improve future production results." stated Laurence Curtis, President and Chief Executive Officer.
PRODUCTION UPDATE
3 months to 3 months to 3 months to 3 months to 3 months to
March 31, December 31, September 30, June 30, March 31,
2007 2006 2006 2006 2006
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Site production
cash cost $361/oz $451/oz $389/oz $264/oz $270/oz
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Total cash cost $380/oz $468/oz $406/oz $284/oz $287/oz
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Gold produced 17,494 oz 14,672 oz 16,388 oz 22,148 oz 20,528 oz
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In the March 31, 2007 quarter, Intrepid produced 17,494 ounces of gold at a total site production cash cost of $361 per ounce. Total revenue for the quarter was $9.8 million. Cash balance at the period end was $4.3 million (which includes $1.8 million dedicated to the April Westpac debt payment).
Unit operating costs for the quarter remained relatively steady at $83 per tonne of ore mined/processed. Improved head grade, especially in the second half of the quarter lowered site cash operating costs from $451 in the December 2006 quarter to $361 per ounce of gold produced (compared to $270 for the March 2006 quarter).
The operational review described in December 2006 quarterly report following the poor mine to mill reconciliation for that period (minus 27 percent) has made good progress on a number of fronts. These improvements, coupled with the natural variability seen in the high-grade Paulsens orebody have seen the March quarter factor at 104 percent or plus four percent. Project to date the mine to mill reconciliation is 99 percent, or minus one percent.
Whilst inherent grade variability will always exist at Paulsens and fluctuations are expected, the operational review has increased focus on continuous improvement as part of routine operations. A significant number of potential improvements have been detailed and evaluated in a series of progress reports with the most beneficial and achievable tasks either completed, in progress or being planned.
DEVELOPMENT UPDATE
Casposo Feasibility
A final feasibility report for the Casposo project was delivered to the Company by AMEC (Peru) in March 2007. The highlights of the study include (in U.S. dollars unless indicated), mineral resources (Indicated only): 2.2 million tonnes of ore containing 313,278 ounces gold and 8.2 million ounces silver, grading 4.46 grams per tonne gold and 116 grams per tonne silver. Within this resource a mineral reserve has been developed of 1.8 million tonnes of ore containing 270,089 ounces of gold at 4.69 grams per tonne and 6.5 million ounces of silver grading 114 grams per tonne silver.
Casposo Environmental Impact Assessment
During the quarter Subcontractor Knight Piesold S.A. completed and submitted its initial draft of the Casposo Environmental Impact Assessment. Earlier environmental studies were included in the development of the feasibility study. The completed Knight Piesold study includes flora and fauna, hydro-geological, archaeological, pale ontological and seismic studies as well as baseline water and weather monitoring. Social and socio-economic studies were also completed in the quarter as were initial public meetings in the community of Calingasta, the nearest major centre (25km) to the Casposo project. Review and revision of the Environmental Impact Study will continue into April with submission of the completed document to authorities in the province of San Juan planned for the April - June quarter.
EXPLORATION UPDATE
Argentina
Casposo
Drilling recommenced at the Casposo property on March 20, 2007. The new phase drilling program will be conducted at Kamila and the Kamila Southeast Extension (SEXT). This is the first drill program since the completion of the Casposo Feasibility Study. The near term goal for exploration at Casposo is to increase the life of mine proposed in the Feasibility by testing deep pit and underground vein targets.
New drilling will initially focus on the Inca and B-veins of the Kamila deposit. Drilling in 2006 continued after completion of the Kamila resource and reserve estimations. This consisted mainly of step-out holes on the Inca Vein which have now tested this mineralized structure to the east of a north-south trending dyke which transects the Kamila deposit. Holes CA-06-183, -184 and -187 and -196 to -199 tested this zone intersecting a strongly developed Inca Vein over core lengths of 3.7 to 8.9 metres which returned gold equivalent values ranging from 2.5 grams per tonne over 8.0 metres to 46 grams per tonne over four metres, averaging greater than 12 grams per tonne gold equivalent. New work in this area will increase the drilling density to allow the area to be evaluated as additional resources for Kamila as well as to continue testing extension of this mineralization to the southeast.
New drilling will also be focused on the Kamila Southeast Extension zone (SEXT). The Kamila SEXT was discovered in February 2006 by exploration hole CA-06-152 (brecciated quartz vein assaying 4.51 grams per tonne gold and 2,274 grams per tonne silver over 1.60 metres at a depth of 90 metres). Holes intersecting the SEXT structure laterally did not produce significant mineral intercepts although the vein and a strong tectonic structure were present over core intervals of six to nine metres. Hole CA-06-179 was drilled 100 metres down dip from CA-06-152 and returned values 1.9 grams per tonne gold and 677 grams per tonne silver over 6.30 metres in a strong vein structure very similar in appearance to the Inca Vein and located parallel to and below the structure noted in previous holes. This zone represents a new advanced, underground exploration target for Intrepid at the Casposo project and validation of the Pajingo deposit exploration model being used to explore the Kamila deposit.
Cristina
Surface sampling and mapping continued at the Cristina Property throughout the quarter, defining several north - and northeasterly trending structures with strong ankeritic carbonate replacement zones. Precious metals mineralization is normally hosted in quartz and quartz carbonate veining associated to these structures and there appears to be a direct relationship between gold and the occurrence of lead (galena). Drilling the project, based on final sampling results, is anticipated in the next quarter.
Australia
Paulsens
Early in the quarter, sampling results from broad-spaced, composite rock chip traverses returned elevated gold and base metal values at the Olbers prospect. Most samples comprised five metre composites, returning better gold values of 396ppb gold, 437ppb gold, 480ppb gold, 332ppb gold, and base metal results to 1200ppm arsenic, 541ppm copper, 888ppm lead, 2160ppm zinc, and 3.8ppm silver. Host geology comprises ferruginous shales and sandstones of the Mt McGrath Formation and minor quartz veining. The Company is currently carrying out an evaluation of all of its holdings along the perimeter of the Wyloo Dome for their sediment hosted gold potential with a view to joint venturing these areas. The Company also plans additional exploration for the Melrose fault structure which hosts the Paulsens Deposit. New zones of gold mineralization similar to the Apollo zone at the mine are the focus of this work.
Central America
San Cristobal (El Salvador)
Project was delayed during the quarter as the company reviews the results of drill programs conducted in the latter part of 2006 and awaits environmental permit approval for drilling at its San Pedro concession. The Company is planning further exploration work at the Minitas project based on the positive results of drilling reported in 2006.
Potonico (El Salvador)
The Company continues discussions with the regulatory and government authorities and with the local community with a view to implementing its grassroots programs in the area.
Taviche (Mexico)
Intrepid optioned the Taviche property located in Oaxaca State, Mexico in 2006 from Plata Panamericana S.A. de C.V. The Taviche Property comprises two concessions totalling 13,724 hectares. Subsequently in 2007, Intrepid entered into an agreement with Aura Silver Resources Inc. whereby the companies will jointly earn a 70 percent interest in the concessions. Aura Silver will undertake to fund the first year agreement commitments with Plata Panamericana. Intrepid acts as operator and began field activities in January 2007. Work during the quarter consisted of the collection of in excess of 250 samples from reconnaissance mapping and detailed vein sampling programs. In addition, work in the quarter included preparation, purchase of processed alteration maps from satellite imagery and detailed mapping and verification of previous data acquired for the property. Work was undertaken in both the Taviche East and West concessions.
The Joint Venture partners are continuing groundwork with a view to drilling selected targets in the third quarter of 2007.
Of particular interest are the La Noria vein structure and the San Martin Mine, an historic mining operation, both representing significant vein systems along structures identified over several kilometers.
Other Exploration
Sweden
Intrepid began drilling the Jokkmokk zinc-silver property located in northern Sweden in early March. The program is budgeted at US$650,000 and will consist of up to 1,200 metres of diamond drilling initially focused on the Sakevare permit. RosCan Minerals Corporation is currently earning an 80 percent interest in the property from Intrepid by carrying the costs of exploration and property acquisition costs which include making option payments to BHP Billiton of US$1.0 million over a period of four years. Intrepid will be the project operator and will retain a 20 percent carried interest while BHP Billiton will retain a 3 percent NSR royalty.
A drill campaign commenced during the quarter to test magnetic and highly electromagnetically conductive anomalies on the Sakevare permit. The targets, MGO-1 and MGO-2 contain zinc, lead and silver mineralisation. The strongest mineralisation occurred in BHP Billiton hole MGO1-4 where the top 150 metres of the hole contained significant sections of anomalous zinc, lead and silver values.
A qualifying report for the Jokkmokk project has been recently completed under is currently being prepared for Roscan under the supervision of BWBruce. W. Mackie, P.Geo.
CORPORATE
- During the quarter, the Company received the comprehensive Paulsens Review Report which was commissioned in the prior quarter. This review was carried out by a group of independent consultants as well as Company and contract personnel. The Company believes that this review will result in tangible benefits with respect to mine production in the future. Implementation of several of the recommendations contained in the report have already resulted in improvements in production.
- Corporate re-structuring to meet North American and Australian financial reporting requirements have been completed and management is now focused on implementation of its growth strategies.
- Mr Daniel Vanin, Executive Vice President and Chief Operating Officer of High River Gold Mines was appointed Non-Executive Director of the Company. Mr Vanin has over thirty years experience in the international mining industry and brings extensive mining, project development and South American experience to the Board as the Company embarks on the development of the Kamila Mine in Argentina.
- The Company's Annual General Meeting will be held in Toronto, Canada on May 29, 2007.
CONFERENCE CALL
As is customary, the company will host a conference call today to discuss the results. Laurence Curtis, President and CEO of Intrepid Mines, will chair the call. To participate in the conference call, please call five minutes prior to the scheduled start time. Dial-in information for the call follows:
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Canada Australia
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Date: April 30, 2007 May 1, 2007
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Time: 4:15 PM (Toronto) 6:15 AM (Sydney)
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Conference Call Number: 1-866-234-7330 or 706-634-5011 (int'l)
706-634-5011 (int'l) Conf ID#: 5033158
Conf ID#: 5033158
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For those unable to participate in the conference call at the scheduled time, a replay of the call will be available from April 30, 2007 at 6:15 PM EST until May 8, 2007.
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Replay Access Number: 1-800-642-1687 Passcode: 5033158 followed
or 706-645-9291 (int'l) by the number sign
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A recorded version of the call will be available at www.intrepidmines.com for 90 days.
On behalf of the Board of Directors of Intrepid Mines,
Laurence Curtis, President & CEO
About Intrepid Mines:
Intrepid Mines Limited is an international gold and silver production, development and exploration company. The Company's producing property is the Paulsens Gold Mine, located in northwestern Australia. The Company's advanced development property is the Casposo Project located in San Juan Province, Argentina. The Company's exploration properties are located in Argentina, El Salvador, Mexico, Australia and Canada.