Red Back Mining Inc. (the "Company") (TSX:RBI) is pleased to announce the
commencement of gold production at its Chirano Gold Mine in Ghana, West
Africa. This achievement is a culmination of 14 months of hard work from
development decision to production. The result is a new modern mine
which is a show-piece of engineering and environmentally sensitive mine
development.
After a smooth and successful commissioning of the process plant, a
first gold pour was achieved on schedule on October 10, 2005. To date a
total of 4,000 ounces of gold have been recovered to circuit, including
750 ounces produced. To this point, the head grade of the oxide ore is
higher than indicated in grade control drilling, which itself was higher
than stated in the original reserve studies. The plant process rate of
250 tonnes per hour (2 million tonnes per annum) established by the
Bankable Feasibility Study has already been achieved. After an
appropriate break-in period the plant throughput will be increased,
further optimizing gold production, as the operations team becomes more
familiar with the plant configuration and process controls.
The original mine plan anticipates 145,000 ounces of gold to be produced
for the first 3 years of production with an overall average of 123,000
ounces per annum over the currently scheduled 8.5 year mine life (based
on a US$375 gold price). However, recent drilling at and around Chirano
suggests the potential for higher grades at depth below the existing
open pit resources and has also identified new targets on strike from
Chirano. Typically mines in Ghana have had this profile and in some
cases have ended up producing substantially more ounces from their
underground operations than the open pit developments. The prospect of
higher grade ore at depth, new surface deposits and a robust gold price
offers exciting opportunities to substantially increase the economics
and longevity of Chirano. Work will continue in the ensuing year to
maximize the mine's resource and reserve potential.
In commenting on the first production from Chirano, Richard Clark,
President and CEO of the Company stated, "The first gold production at
the Chirano Mine is the result of a committed effort by many talented,
dedicated people. I congratulate all of our employees and contractors on
this impressive achievement. Chirano is the first new mine in Ghana for
many years and the first under the administration of President Kufour
and his Government. The successful commissioning of Chirano clearly
demonstrates and confirms Ghana's commitment to mining and foreign
investment, both at a national and local level. I would also like to
thank our shareholders and our bankers, for their support and
confidence."
Lukas Lundin, Director, commented, "I would like to congratulate Rick
Clark for his outstanding achievement and leadership in the building of
this new mine. He deserves high accolades for his work in bringing the
project to fruition. I would also like to thank Ross Ashton and his
exploration team who were the first to recognize the potential of
Chirano. At this stage of development Chirano has exceeded expectations
in all material areas: grade, tonnage, commissioning and production and
we look forward to continuing this positive trend."
The technical contents of this release have been reviewed by Ross
Ashton, BSc, FAusIMM, a Qualified Person pursuant to NI-43101. Mr.
Ashton is a Director of the Company. Samples are prepared and analyzed
by fire assay using a 50 gram charge at the Analabs facility in Bibiani,
Ghana 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
Analabs laboratories worldwide.
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