(via Thenewswire.ca)
January 14, 2016 / TheNewswire / Vancouver, British Columbia - Cadan Resources Corporation (TSXV: CXD) ("Cadan" or the "Company") is pleased to provide an update on its commissioning progress and initial production, including the results of its first gold pour since the plant closure in September 2014.
Production Highlights (Commissioning Phase)
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-Gold and silver production to-date of 6.2kg Au and 20kg Ag
-Total throughput to date of 5,189 tonnes
-Average grade to date of 1.87g/t Au & 28.7g/t Ag
-Average gold recovery to date of 91%
-Throughput during December 2015 of 3,540 tonnes, averaging 114 tonnes per day
-Average gold recoveries in December of 90%
-Average grade during December of 1.83g/t Au and 30.02g/t Ag
-Throughput January 1 to date is 1,649 tonnes, averaging 127 tonnes per day
-Average grade year-to-date of 1.97g/t Au and 29.7g/t Ag
-Average gold recovery year to-date of 95.6%
-Current throughput 145tpd
Cadan's gold production since commencing commissioning on the 7th of November has totalled 6.2kg of gold (Au), and 20kg of silver (Ag) equivalent to 199oz Au and 643oz Ag, at an average grade 1.87g/t Au and 28.7g/t Ag.
Commissioning is ongoing and has taken longer than anticipated, primarily due to the plant construction contractor not meeting agreed refurbishment specifications, timing and key performance milestones. As a result of those delays, in late December 2015 Cadan replaced the contractor and with Cadan's own plant management team including appointing its own Mill Manager and maintenance contractor MagDrills to manage all mill maintenance. Cadan has observed significant improvements in the performance of the plant since the changes have been made.
The issues with the prior construction contractor has resulted in the planned ramp up of production to the plant design capacity of 200 tonnes per day (tpd) being delayed by approximately 8 weeks. Nonetheless production rates are continuing to increase at a steady rate and plant performance over the last 3 weeks has demonstrated much greater consistency.
As at the current date, the plant is operating at 150tpd which is approximately 50% above its highest ever production levels. That has been achieved on a significantly smaller budget (almost 20% less) when compared to plant budget for the prior launch and operation of the plant. Total capital expenditures to-date to completely rebuild the company and its main project T'Boli is approximately US$3.4 million (C$4.6 million).
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T'Boli gold pour - Weight 1.5kg, Grade 99.79% purity
Processing continues on the low and marginal grade stockpiles with the results above initial expectations. There have been considerably more tonnes identified than initial estimates, due to higher metal content mineralized material being found in areas previously identified as uneconomic.
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The Company further announces that it is seeking to enter into shares-for-debt settlement agreements whereby Cadan is proposing to issue up to 20,000,000 units to current creditors of the Company to settle aged account payables. Each unit consists of one common share of the corporation and one share purchase warrant. Each share purchase warrant entitles the holder to acquire one common share of the Company at a price of $0.10 for up to 12 months. The units will be offered at a price of five cents per unit. The shares-for-debt settlements will be subject to the approval of the TSX Venture Exchange ("TSX-V") and the unites will be subject to a 4-month hold period.
The shares-for-debt transaction is one of a series of ongoing steps that the Company has been carrying out since March 2014. Those steps include a reduction of net debt by share settlement as well as careful control over operating costs and general and administrative expenses. In addition, the Company continues to actively seek funds to further the progress on the T'Boli Project. The recently announced Facility agreement for up to $6.4 mill (see press release of January 11, 2016) is intended to provide Cadan with the necessary funding to carry the project through the commissioning stage, and to achieve targeted expansion of production rates to 400tpd.
The Company also confirms that as per its press release on December 23, 2015 it has received approval from the TSX-V and completed the issuance of shares for debt of 1,088,250 shares to former directors and officers of the Company.
Statement Regarding T'Boli Production: The Company advises that the decision to restart production at the T'Boli mine was not based on the results of a pre-feasibility or feasibility study of mineral reserves prepared in accordance with NI 43-101 demonstrating economic and technical viability. There are no known mineral reserves, as that term is used in NI 43-101, on any of its mineral properties and as a result the economic viability of the properties has not been demonstrated. A feasibility study or pre-feasibility study provides more in-depth economic analysis of resources, more detailed metallurgy and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with production decisions that are not supported by a current feasibility or pre-feasibility study.
On Behalf of the Board,
Peter Main
Interim President and CEO
info@CadanResources.com
For further information visit our website at www.CadanResources.com; email us at info@CadanResources.com
Phone: 778-370-1372 Fax: 604-608-5442
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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