MONTREAL, QUEBEC -- (Marketwire) -- 02/13/13 -- MDN Inc. ("MDN") (TSX: MDN) notifies its shareholders that African Barrick Gold plc (ABG), the project operator of the Tulawaka gold mine in Tanzania in which MDN has a 30% participating interest, announced fourth quarter and annual operational results.
ABG have successfully extended the life of this operation consistently in the last three years; however as part of ABG Operational Review, ABG have taken the decision not to further extend the mine life beyond the middle of 2013. ABG are currently starting to implement a closure plan for the operation. Therefore in 2013, ABG will focus on the progression of closure planning. Options for divestment will also be considered.
"In spite of the closing of Tulawaka Mine, MDN with $3.5 million working capital, plus its valuable Crevier Nb - Ta deposit and quality projects in Tanzania, MDN have a good base to continue to persist and to develop the value of the company in the following years compared to several peers in the current condition market" said Marc Boisvert President & CEO of MDN.
Tulawaka is becoming a historical successful story for a junior mining company as MDN. MDN succeeded to finance the Tulawaka construction during an era of low gold price and kept going at the rapid building pace by a major gold producer to succeed the opening in March 2005. In less than 3 years, MDN succeeded to reduce its debt obligation and started to accumulate profit from the production at Tulawaka mine. Funds permitted MDN to increase it land package in Tanzania and to develop quality exploration projects. Today, Ikungu is an advance drill project with a mineral gold zone. It is one of the most advance project in Tanzania with blue sky potential not under control of a major company. At Ikungu East, MDN acquired the control over 15 km strike length of a volcanic belt not observed until this day. At Nikonga, MDN did a drill discovery with NKD-02 drill hole intersecting 12.3 g/t Au over 4.26 m (PR March 27, 2012) and finally the Isambara project with the potential for bulk mining mineralization style.
In parallel, it permitted a strategic investment in 2009 where MDN acquired control in a Niobium - tantalum deposit located in Quebec Canada which is taking value with the feasibility in progress and increasing price and demand of Tantalum metal. This strategic investment was implemented as an alternative and anticipation of the Tulawaka mine aging. Crevier deposit is expected to bring future revenue to MDN. Progress are made to become one of the most secure and reliable supply of Tantalum in a near future.
Operating performance (reflected as 100 %)
The total mine gold production for the year was 44,338 ounces compared to the 84,101 ounces achieved in 2011. The decreased gold production level resulted from lower mined grade from underground stopes and the application of batch milling in order to drive plant efficiencies. Gold ounces sold were broadly in line with production.
Cash costs for the year were US$1,269 per ounce sold compared to US$727 in the prior year. This cost increase was mainly due to the lower production base and the impact of lower capitalised mining. These were slightly offset by lower sales related costs due to lower sales ounces.
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