2008 Financials and Update - looks decentGlobeStar Reports Audited 2008 Results and Updates on Operations and Exploration
(All dollar amounts are expressed in United States currency unless otherwise stated.)
Toronto, Ontario April 8, 2009- GlobeStar Mining Corporation ("GlobeStar") (TSX:GMI) today has setforth key highlights of its audited annual financial results for the2008 fiscal year and provided an update on operations and explorationat its 100% owned Cerro de Maimón copper-gold-silver mine and relatedfacilities (the "Cerro de Maimón Mine") located in the DominicanRepublic. Copies of GlobeStar’s 2008 financial statements, managementdiscussion and analysis and its annual information form (collectivelythe "Annual Filings") are available on GlobeStar’s website www.globestarmining.com and at www.sedar.com.
GlobeStarwill hold a conference call at 9:00 a.m. (EDT) on Tuesday April 14,2009 to discuss these results; call-in details are included at the endof this release. A short presentation will be made during theconference call and the presentation slides will be available on theinvestor relations tab of GlobeStar’s website on Monday April 13, 2009.
2008 Highlights
- Cash and accounts receivable totalled $6.0 million as at December 31, 2008.
- Copper concentrate inventories were approximately 1,907 tonnes at the commencement of commercial production on January 1, 2009, containing approximately 1.2 million pounds of copper, 220 ounces of gold and 21,300 ounces of silver.
- Capitalized construction and development costs at the Cerro de Maimón Mine as reported in the project spending report for the senior debt facility totalled $70.4 million, before value added taxes, as at December 31, 2008. Accordingly, the Cerro de Maimón Mine was constructed on time and on budget.
- Sulphide ore reserves totalled 4.8 million tonnes grading 2.5% copper, 0.96 grams of gold per tonne and 34.8 grams of silver per tonne at year end 2008, basically unchanged from December 31, 2007, after processing approximately 107,000 tonnes of sulphide ore grading approximately 4.1% copper, 1.35 grams of gold per tonne and 79.4 grams of silver per tonne.
First Quarter 2009 Highlights
- The sulphide plant processed approximately 103,000 tonnes of ore during the first quarter of 2009 grading 4.3% copper while producing approximately 12,500 tonnes of copper concentrate containing approximately 8.6 million pounds of copper, 1,700 ounces of gold and 190,000 ounces of silver.
- Recent geologic interpretations of the Cerro de Maimón orebody indicate that there is an undrilled area adjacent to the north-west end of the open pit which may host an extension of the Cerro de Maimón deposit. Trenching and geophysical programs have commenced over the prospective area and a drilling program will be initiated next week to evaluate this new target.
2008 Audited Financial Statements
GlobeStar’s2008 audited financial statements reflect the fact that from thecompletion of construction of the Cerro de Maimón Mine in the thirdquarter of 2008 until commercial production was achieved on January 1,2009 GlobeStar was in a pre-commercial production phase. Consequently,GlobeStar continued to capitalize all costs directly attributable tothe Cerro de Maimón Mine during this period, including commissioningand pre-production operating costs. In addition, proceeds from the saleof metals produced during the pre-commercial production period wererecorded as a reduction in pre-production operating costs, rather thanas revenues.
As a result of the commencement of commercialproduction in January 2009, the financial statements for the firstquarter of 2009 will reflect the revenues and operating costsassociated with all production since January 1, 2009.
Capitalcosts related to completing the construction of the Cerro de MaimónMine are included in the mineral property expenditures disclosed in theAnnual Filings. For additional clarity, the capitalized constructionand development costs at the Cerro de Maimón Mine as reported in theproject spending report for the senior debt facility totalled $70.4million, before value added taxes, as at December 31, 2008.
Thesale of 7,700 tonnes of copper concentrate during 2008 providedproceeds of $7.7 million and resulted in GlobeStar having cash andaccounts receivable of $6.0 million at December 31, 2008. Copperconcentrate inventories were approximately 1,907 tonnes on January 1,2009, however, the value of all finished and in-process inventorieswill begin to be reflected in the first quarter financial statementsfor the period ended March 31, 2009.
Ore Reserves and Exploration
Theestimated sulphide mineral reserves at the Cerro de Maimón Mine as atDecember 31, 2008 are shown in the following table and remain virtuallyunchanged from December 31, 2007 after processing approximately 107,000tonnes of sulphide ore grading approximately 4.1% copper, 1.35 grams ofgold per tonne and 79.4 grams of silver per tonne during 2008.
The estimated oxide mineral reserves at the Cerro de Maimón Mine asat December 31, 2008 are shown in the following table and are verysimilar to the reserves as at December 31, 2007 after processing aminor amount of oxide ore during 2008.
During the first quarter of 2009 the open pit at the Cerro de MaimónMine has become wider and deeper creating significantly more rockexposure and revealing structural folds and faults associated with theorebody that were not evident in the drill core alone. Consequently,the most recent geologic interpretation of the Cerro de Maimón orebodyindicates that there is an undrilled area adjacent to the north-westend of the open pit which may host an extension of the Cerro de Maimóndeposit. Trenching and geophysical programs are underway and a drillingprogram will start next week to evaluate this new target.
First Quarter 2009 Production
Thesulphide mill has been running at its design capacity with 95%availability throughout the first quarter of 2009 while processingapproximately 103,000 tonnes of ore grading 4.3% copper. First quarter2009 production was approximately 12,500 tonnes of copper concentratecontaining approximately 8.6 million pounds of copper, 1,700 ounces ofgold and 190,000 ounces of silver.
The oxide plant has not yet reached full production because ofhigher than expected clay content in the oxide ore and elevated levelsof soluble copper in the oxide circuit. Changes to the oxide plantshould resolve the clay issue during the second quarter of 2009 andinvestigations are underway concerning the various alternatives forreducing the higher copper levels.
During the first quarter of 2009 the oxide plant processedapproximately 34,000 tonnes of ore grading 1.33 grams of gold per tonneand 65.0 grams of silver per tonne, resulting in the production ofapproximately 1,200 ounces of gold and 25,100 ounces of silver inprecipitate and doré.
First Quarter 2009 Production
Productionhistory to date for the sulphide plant indicates that estimated copperproduction for 2009 remains at approximately 29 million pounds asreported earlier in the first quarter of 2009. However,higher-than-expected gold and silver levels in the copper concentratehave resulted in a revised 2009 forecast of approximately 8,000 ouncesof gold and 715,000 ounces of silver in concentrate versusapproximately 7,300 ounces of gold and 368,000 ounces of silver aspreviously disclosed in January 2009.
The 2009 production forecast for the oxide plant has been reviseddue to delays in reaching full capacity as previously described, with arevised estimated production for 2009 of approximately 8,600 ounces ofgold and 180,000 ounces of silver versus the previously disclosedestimated production of approximately 14,000 ounces of gold and 280,000ounces of silver.
Conference Call Details
GlobeStar will host a conference call on Tuesday April 14, 2009 at9:00 a.m. (EDT) to discuss these results. The conference call may beaccessed by dialing 1-866-440-8926 in North America or 1-416-343-2651internationally. Please dial in conference ID number 8482151. Thearchived conference call can be accessed until Wednesday April 22, 2009by following the instructions in the investor relations tab onGlobeStar’s website.
A short presentation will be made during the conference call and thepresentation slides will be available in the investor relations tab ofGlobeStar’s website www.globestarmining.com on Monday April 13, 2009.
About GlobeStar
GlobeStarMining Corporation is a Canadian based mining and exploration companyproducing copper, gold and silver at its Cerro de Maimón Mine in theDominican Republic. GlobeStar maintains a listing on the Toronto StockExchange (symbol: GMI).
A.E. Olson, M AusIMM, GlobeStar’s Senior Vice President and COO anda Qualified Person as defined under Canadian National Instrument43-101, supervised the preparation of and verified the technicalinformation contained in this release.