Second quarter report, excellent.Intrepid Reports Operating Activities for the Quarter Ended June 30, 2007
Jul 31, 2007 4:01:00 PM
TORONTO, ONTARIO -- (MARKET WIRE) -- 07/31/07 -- Intrepid Mines Limited (TSX: IAU)(TSX: IXN)(ASX: IAU), an international precious metals production, development and exploration company, reports operating activities for the quarter ended June 30, 2007. All dollar figures are in United States dollars unless otherwise indicated. Intrepid today filed its Activities Report for the quarter ended June 30, 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
Paulsens Operations
- Gold production 15,854 ounces, 88 percent of Mine (LOM) Plan
- Site cash costs $467 per ounce ($26 per ounce due to US$ weakness over
prior period)
- High grade intersections at Apollo (still open at depth)
Casposo Feasibility
- Environmental Impact Assessment submitted
- Final project approvals and commencement of development activities
expected during final quarter of 2007
- Project resource and reserve expansion update anticipated September 2007
- Project financing alternatives under evaluation
Exploration
- Positive drilling results at Casposo provide confidence of project
resource and reserve expansion
- Taviche drilling program of 3,800 meters (phase 1) targeted for September
2007 quarter
- Cristina and Jokkmok relinquished
Finance
- Gold revenue was $7.8 million
- Total cash $1.1 million at period end
- Paulsens project debt restructured to align with LOM cash flows
- Gold deliveries reduce hedging below 65,000 ounces at date of report
PRODUCTION UPDATE
3 months 3 months 3 months 3 months 3 months
to to to to to
June 30, March 31, December 31, September 30, June 30,
2007 2007 2006 2006 2006
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Site
production
cash cost $ 467/oz $ 361/oz $ 451/oz $ 389/oz $ 264/oz
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Total cash
cost $ 485/oz $ 380/oz $ 468/oz $ 406/oz $ 284/oz
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Gold
produced 15,854 oz 17,494 oz 14,672 oz 16,388 oz 22,148 oz
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In the June 30, 2007 quarter, Intrepid produced 15,854 ounces of gold at a total site production cash cost of $467 per ounce. Total revenue for the quarter was $7.8 million. Cash balance at the period end was $1.1 million.
Unit operating costs for the quarter rose from $83 to $93 per tonne of ore mined/processed equally as a result of the lower tonnes mined and the weaker United States dollar against the Australian dollar (5.8% or $5 of the increase). Australian dollar unit operating costs are expected to return to normal levels in the September quarter.
While inherent grade variability will always exist at the Paulsen Gold Mine improved understanding of the ore body combined with a tailored mining approach and transition to improved reserve delineated deeper sections of the ore body are expected to deliver improved performance.
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 US 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. This is the inaugural ore reserve estimate for the Casposo deposit.
Casposo Environmental Impact Assessment
During the quarter subcontractor Knight Piesold S.A. completed and submitted the Casposo Environmental Impact. Assessment Report (EIA) and all supporting documents in San Juan, Argentina to the Province's Mining Secretariat. The process for government and public review is anticipated to last 2 to 3 months with approval expected at the end of the third quarter of 2007.
Casposo Project Financing
During the quarter, the company continued work with an independent financial advisor reviewing alternatives for financing the Casposo Project.
EXPLORATION UPDATE
Argentina Exploration
Casposo Project Exploration
The first drill program since completion of the Casposo Feasibility Study in March 2007 was completed during the quarter. The near term goal for exploration at Casposo is to increase the life of mine proposed in the Feasibility Study by testing pit extension and underground vein targets.
A total of 3,315 metres of core drilling was completed in the program that concluded in May. Approximately 600 metres (in nine holes) were used specifically to support mine geotechnical design.
Of particular note are very strong values in intercepts obtained from drill hole CA-07-200, which intersected 7.00 metres of 9.02 grams per tonne gold and 338 grams per tonne silver at shallow depth along the proposed it wall. This additional near surface information will help determine pit design in the initial year of mining. Drill holes CA-07-205 intersected 4.3 metres of 4.18 grams per tonne gold and 256 grams per tonne silver from 116.20 metres to 120.50 metres and A-07-216 intersected three metres of 8.6 grams per tonne gold and 579 grams per tonne silver from 109.80 metres to 112.80 metres. Both intercepts test down dip extension of a new section of the Inca vein defined by drill holes CA-06-183, 184, 197 in September of 2006. This section of the Inca vein is located 30-40 metres outside of the current pit wall boundary and extends below the current pit floor elevation. Other holes completed in the recent campaign (CA-07-202 to 204, 206 to 209), show continuity of the Inca vein as it extends to the southeast and to depth where underground mining may present a solution to access this mineralization.
These results once incorporated into the resource and mine models will lead to consideration of a larger pit design of the Kamila pit and of additional underground mining potential. The new information will also assist in determining the pit floor for the final mine plan.
Cristina
An exploration project 35 kilometres southeast of Kamila known as "Cristina", was explored during the past twelve months. Exploration included trenching and rock and stream sediment sampling. A narrow mineralised structure several kilometres long was delineated containing gold and base metal values. Management carried out a comprehensive review of all the results in the current quarter and decided that the project did not warrant diamond drilling. The project was returned to the owner. Total expenditures were approximately $125,000.
Australia Exploration
The Company utilized exploration staff from its Central American operation to conduct a review of the Ashburton tenement package using their experience with Carlin style orebodies. This review provided a different perspective for approaching future exploration in the area and some considerations noted align well with Newcrest exploration efforts in the region.
Recent exploration in Intrepid's Ashburton tenements has defined extensive areas of structurally controlled silicification and brecciation with potential to host Carlin-style, sediment hosted, disseminated gold deposits. These new targets can extend up to several kilometers along strike and can be up to 150 meters wide. Several areas have been recommended for further more detailed work. Follow-up work will include detailed sampling and mapping of these exiting new targets.
Mexico Exploration
Taviche
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.
Selected samples from veins and old mine dumps contain values up to 94.2 grams per tonne gold and 1,845 grams per tonne silver. The geochemical and textural results suggest an epithermal vein environment that is exposed at relatively high-levels in the northern extent of the vein system and at somewhat lower levels in the south.
The West Taviche Block contains two significant, north-south trending, sub-parallel vein systems: the West and the East. A western system has been traced over 7.0 kilometers and consists of four distinct veins: La Noria; El Viejo; San Antonio; and San Martin. A second system, located about two kilometers east, can be followed along a series of anastamozing veins for about 6.0 kilometers and contains the Portillo, Donaji/Marias and San Jose/Corona vein segments. The northern three kilometers of the East System (the San Jose/Corona segment) is held by Fortuna Silver Mines and Continuum Resources, who recently announced a 43-101-qualified resource comprising an indicated mineral resource of 1.47 million tonnes grading 262.2 grams per tonne silver and 2.19 grams per tonne gold containing 17.7 million silver equivalent ounces and an inferred mineral resource of 3.9 million tonnes grading 260.6 grams per tonne silver and 2.57 grams per tonne gold containing 49.1 million silver equivalent ounces. Drilling along the northern boundary of the Fortuna/Continuum property indicates that the on-strike, down plunge extension potential for the San Jose vein system may lie on Intrepid's West Taviche Concession.
In addition to the detailed studies along the two known vein systems, a reconnaissance program has been conducted by Intrepid geologists over the remainder of the West Taviche Block where initial visits have identified several large, prospective areas. Analytical results from samples collected in these areas are currently pending. A reconnaissance program has also been conducted over the East Taviche Block where the Mexican Government ("Consejo") has identified numerous gold-silver bearing vein prospects.
Intrepid, together with partner Aura Silver, has initiated the permitting process for a proposed Phase 1 drilling program at Taviche totalling 3,800 meters planned to commence in the third quarter of 2007.
El Salvador Exploration
Exploration at the Company's San Cristobal project is pending a review during the quarter as the Company reviews the results of drill programs conducted in the latter part of 2006 and 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. In the interim, the Company continued its work with the community on local development projects.
At Potonico the Company continues discussions with regulatory and government authorities and with the local community with a view to implementing its grassroots programs in the area.
Other Exploration
Sweden
Jokkmok Project (Roscan Option Joint Venture)
This silver-lead-zinc project was funded by Roscan Minerals Inc. who have spent at total of $600,000 in the last two seasons using Intrepid as the operator. The exploration target is a Cannington style silver-lead-zinc deposit. The 2007 program completed 1,116 metres of diamond drilling in eight drill holes. A total of 401 samples submitted for zinc, lead, silver analysis, as well as multi-element analysis. A ground geophysical program consisting of HLEM Slingram and magnetic total field surveys was also completed to assist in delineating drill targets.
Anomalous lead and zinc values were intersected in the majority of drill holes. However, drill results overall were not compelling. The purchase payment to the vendor was not justified in light of the exploration results and the property has been relinquished.
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:
For those unable to participate in the conference call at the scheduled time, a replay of the call will be available from August 1, 2007 until August 7, 2007.
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Toronto Dial-in Australia Dial-in
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Date: July 31, 2007 Aug 1, 2007
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Toronto Call: 4:30 PM (Toronto)
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Australia Call: 6:30 AM (Perth)
8:30 AM (Sydney)
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Conference Call Number: 1-866-542-4238 or 1-800-9559-6849 or
416-641-6127 416-641-6125
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Replay Access Number: 1-800-408-3053 or 1-800-408-3053 or
416-641-6127 416-641-6127
Passcode: 3230866 Passcode: 3230871
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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.