VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 7, 2010) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to report continued Resource growth at its 100% owned Tasiast Gold Mine ("Tasiast") in Mauritania.
Since the previous December 2009 Mineral Resource estimation (February 1, 2010 release) the Measured and Indicated Resource at Tasiast has increased by 2.74Moz to 9.25Moz (a 42% increase) and the Inferred Resource has increased by 0.63Moz to 1.93Moz (a 48% increase) (at cut off grades of 0.2g/t for oxide and 0.5g/t for fresh material).
Tasiast Resources (August 2010)
- The Company reports resources on the basis of mining cut-off grades to be applied to the various ore types and, for comparison purposes, at a 1.0 g/t cut-off grade
- Minerals Resources are reported below the July 31, 2010 mined surface.
- Figures may not add correctly due to rounding.
- Oxide is referred to as material amenable to Dump Leaching and CIL. Fresh is referred to as material amenable to Heap Leaching and CIL.
- The resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction into 15 metres (East) by 25 metre (North) by 5 metre (Elevation) model blocks and assuming smallest mining unit for ore selection in mine grade control of 3 metres (East) by 5 metres (North) by 2.5 metres (Elevation).
- Measured resources lie in areas where drilling is available at a nominal 25 x 25 metre spacing, Indicated resources occur in areas drilled at approximately 25 x 50 metre spacing and Inferred resources exist in areas of broader spaced drilling.
- Gold estimation and model blocks were constrained within geologically derived wireframes.
Approximately 90% of the Resource increase has been generated by ongoing drilling on the Greenschist Zone at the West Branch deposit, with the remainder added from recent drilling at Piment North Extended, a new discovery that extends the mineralization at Tasiast for 2.5km north of the previous resource estimate.
Since December 31, 2009 a further 236 holes for 71,880 metres have targeted the West Branch deposit generating this increase in Resources. This latest program at West Branch continues to demonstrate the consistently wide, high grade mineralisation across the strike of the Greenschist Zone. The table below sets out selected intercepts that form part of the current resource estimate:
Note: Intercepts are +95% of true width.
Selected Greenschist Intercepts included in August 2010 Resource Update
Note: To view "Long Section of Greenschist Zone looking West showing extent of Updated resource and intercepts of deepest hole on section", please click the following link: http://media3.marketwire.com/docs/rbi0907.pdf
Mineralisation remains open. Recent drilling has confirmed a shallow southerly plunge to the Greenschist Zone and current drilling is now targeting this plunge orientation. The long section above shows the distribution of current Resources and highlights the southerly plunge of the Zone. Intercepts shown are the deepest hole on section, demonstrating the potential for further significant resource growth at depth.
Higher grade zones have been identified sitting within the Greenschist mineralised envelope. These intercepts, some of which are shown in the table above, also seem to be controlled by the shallow, southerly plunge of the Zone. The plunge orientation has been confirmed by two deep holes, both approximately 350-400m down dip of the current Resource (650m below surface). Significantly, both holes intersected Greenschist mineralization (TA05005RD 50m at 0.75g/t and TA05007RD 63m grading 0.81g/t.) and establish a plunge control to the higher grade mineralization in the Zone. Ongoing drilling is focusing on this shallower plunge orientation.
There are currently eleven drill rigs on site at Tasiast. The intercepts shown on the long section represent the maximum capability of the reverse circulation rigs on site and so a further ten diamond core rigs are scheduled to arrive by year end to continue the resource expansion and infill program of the Greenschist resource. These additional rigs will also provide capacity for further exploration on strike to the north and south of the existing ore bodies at Tasiast. To date Red Back has only preliminarily tested 10 kilometres of the prolific greenstone belt that hosts the Tasiast mine and the Greenschist Zone.
Commenting on the continued rapid resource growth at Tasiast, Richard P. Clark, President and CEO stated "The Greenschist Zone continues to deliver beyond our original expectations. The recent confirmation of the southerly plunge component of the mineralization and the identification of higher grades within this plunge should allow us to add resource ounces at an even faster pace, particularly with the addition of ten new drill rigs over the coming months. We continue to update the market on a regular basis on the resource growth at Tasiast."
Arrangement with Kinross Gold Corporation
On August 2, 2010, the Company entered into an arrangement agreement with Kinross Gold Corporation ("Kinross"), pursuant to which Kinross has agreed to acquire all of the issued and outstanding common shares of Red Back in exchange for 1.778 Kinross common shares and 0.110 of a Kinross common share purchase warrant. Each warrant will be listed on the TSX and will be exercisable for a four year term at an exercise price of US$21.30 per Kinross common share. The acquisition is being carried out by way of plan of arrangement under the Canada Business Corporations Act. In connection with the arrangement, the Company will hold a meeting of shareholders on September 15, 2010 at 10:00 a.m. (Toronto time) at St. Andrews Hall, 27th Floor, St. Andrews Club & Conference Centre, 150 King Street West, Toronto, Ontario. Shareholders are asked to complete and return their proxies no later than 10:00 a.m. (Toronto time) on September 13, 2010 to Red Back's registrar and transfer agent, Computershare Investor Services Inc., Attention: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, Canada, M5J 2Y1.
After careful consideration, the Red Back Board unanimously determined that the consideration under the arrangement is fair to Red Back shareholders, other than Kinross, and that the arrangement is in the best interests of Red Back. Accordingly, the Red Back Board unanimously recommends that Red Back shareholders vote FOR the Arrangement Resolution. For more information, shareholders are urged to review the management information circular dated August 16, 2010.
About Red Back
Red Back is an un-hedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana and the Tasiast Gold Mine in Mauritania. Aggressive exploration programs aimed at increasing the Company's resource and reserve base at both Chirano and Tasiast are ongoing.
The independent Resource estimate reported herein was undertaken by Nic Johnson (Member of the Australian Institute of Geoscientists) of Hellman and Schofield Pty. Ltd with more than five years experience in the use of geostatistics for estimation of recoverable resources in gold deposits. For the purpose of reporting under National Instrument 43-101 Mr. Johnson is regarded as a Qualified Person.
The technical contents of this release have been reviewed by Hugh Stuart, BSc., MSc, a Qualified Person pursuant to NI-43101. Mr. Stuart is the VP - Exploration of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Samples are prepared and analyzed by fire assay using a 50 gram charge at the SGS facilities at the Tasiast mine site and at Kayes in Mali in compliance with industry standards. Field duplicate samples are taken and blanks and standards are added to every batch submitted. Selected samples from this lab are check assayed each month at other SGS laboratories worldwide. This News Release contains forward looking statements which are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements. The Company does not intend to update this information and disclaims any legal liability to the contrary
FORWARD-LOOKING INFORMATION
This press release contains "forward-looking information" that is based on Red Back's current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect to Red Back's plans, outlook and business strategy. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "plan", "forecast", "project", and "believe" or other similar words and phrases are intended to identify forward-looking information.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Red Back's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to drilling results; uncertainties attributable to the calculation of mineralization, resources and reserves; the ability to raise sufficient capital to fund exploration; changes in economic conditions or financial markets; changes in prices for Red Back's mineral products or increases in input costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labour relations matters. Readers should review the risk factors relating to our business set forth in our Annual Information Form dated March 30, 2010 and the Management Proxy Circular dated August 16, 2010 issued in respect of our meeting of shareholders scheduled for September 15, 2010, both of which are available on Sedar at www.sedar.com.
This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Red Back disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
On behalf of the Board of Directors,
Richard P. Clark, President