Rusoro Mining Ltd. (TSX VENTURE: RML) ("Rusoro" or the "Company")
is pleased to report that it has reached record quarterly gold
production (38,868 ounces) in Q4 2008 and record low cash costs
(US$358 per ounce) for the same period at the Choco 10 operations
which the Company acquired as of November 30, 2007. In addition,
the Company is delighted to confirm that the Ministry of Basic
Industries and Mining (MIBAM) has approved the technical,
financial, and environmental study for the Company's Increible 6
Gold Project. This approval is a further step in implementing the
Company's strategy where it expects to expand the Choco 10
operations by processing ore from the Increible 6 deposit at the
Choco 10 mill, which are 6 km away from each other.
Rusoro's December monthly results cap a record quarter at the
Company's Choco 10 operations. December was the third consecutive
month in which the Choco 10 mill achieved record gold production at
historically low cash costs. The mill processes ore from the
Company's Choco 10 and Isidora mines located near the town of El
Callao in Bolivar State, Venezuela. Recent production highlights
and related (unaudited) costs include:
- Record Quarterly Operations in Q4 2008. In Q4 2008, the Choco
10 mill produced 38,868 ounces of gold at a cost of US$358 per
ounce marking the best quarter in the history of the Choco 10 mill.
This also marks the first full quarter of positive cash flow from
operations at the Choco 10 mill.
- Record December Monthly Production. The Choco 10 mill produced
14,261 ounces of gold in December 2008. This marks the third
consecutive month of record gold production and can be attributed
to high volumes of ore processed from the Choco 10 mine which
produced 9,234 ounces of gold with the other 5,027 ounces of gold
coming from ore processed from the near-by Isidora gold mine.
- Record December Monthly Cash Costs. Cash costs at the Choco 10
mill were a record low for December at US$347 per ounce of gold.
The vast improvement is the culmination of a number of initiatives
which include improvements made to the haulage fleet
availabilities, mill availabilities, modifications made to the
primary mine haulage contract and optimization of the mine
plan.
- Rusoro Advances Environmental Permit for Increible 6 Deposit.
This is Rusoro's second major mining related approval as the
Company has now been approved to move forward on its second new
mining operation in less than a year. Ore from the Company's
Increible 6 deposit is expected to be processed at the Choco 10
mill commencing in Q4 2009.
Rusoro's President, George Salamis noted, "Our stated goal was
to be cash positive at the Choco 10 mill in 2008 and to do that for
the full quarter at year end is both exciting and a tribute to
Rusoro's operations team whose diligence has resulted in the
operations reaching these milestones. To have achieved these
results is a testament to the Company's ability to successfully
consolidate gold assets in Venezuela and successfully turn them
around by increasing efficiency and dealing with issues that
plagued the operations under previous management. We will continue
with a number of initiatives that are on-going and the Company
believes that it can maintain and even further reduce some
operational cash costs at the mines."
Rusoro CEO, Andre Agapov stated, "We are delighted with both our
operational results and with the receipt of the Increible 6
approval. With the Choco 10 mill reaching these operational
milestones and our plan to bring the Increible 6 and San Rafael /
El Placer mines on-stream over the next year we intend to continue
to execute our production growth strategy to the benefit of our
shareholders."
Increible 6 Permits
The Company is pleased to report that MIBAM has approved the
study on the technical, financial, and environmental merits for the
Company's Increible 6 Gold Project. The approval for the
Certificate of Exploitation was published in Venezuela's Official
Gazette on December 23, 2008. The Exploitation Certificate is
expected by the Company prior to January 23, 2009 at which time the
application will be made for the Permit to Affect Natural
Resources. The permitting process remains on track for production
from Increible 6 in 2009. Rusoro's 100% owned Increible 6 gold mine
is located 6 km from the Choco 10 mill. It is the Company's
intention to process ore from Increible 6 at the Choco mill
commercially in mid to late 2009. The Increible 6 mine is host to
1,587,000 ounces indicated (23.5 Mt @ 2.11g/t Au) and 1,100,000
ounces inferred (17.5 Mt @ 1.95g/t Au) (see News Release - Nov. 15,
2007), which Rusoro has advanced through discovery, delineation and
now development. Increible 6, along with Choco 10, is currently the
subject of a scoping study (PEA), looking at production expansion
alternatives for the future.
This marks the second time in the last year that Rusoro
successfully advanced the permitting process for a new mining
operation. Rusoro announced the receipt of its permit for the
development of its 100% owned SREP ore body in January 2008.
Q4: Mining and Milling
Total ore processed at the Choco 10 mill in Q4 was 600,774
tonnes. The total gold produced at the mill was 38,868 ounces
during Q4. This is a record amount of gold poured in any quarter at
the Choco 10 mill. Of the 38,868 ounces produced for the quarter,
11,903 ounces were produced from Isidora gold ore processed at the
Choco 10 mill and 26,965 ounces came from the Choco 10 mine.
Significant ore development has now been completed at the Isidora
mine which the Company believes will allow it to sustain Isidora's
current production levels moving forward. Additionally, the Company
will continue to optimize efficiency and conduct exploration for
the purpose of converting gold resources to minable reserves at
Isidora.
For Q4 2008, the operational cash costs (unaudited) at the Choco
10 mill for the combined gold produced from the Choco 10 and
Isidora mines was US$358 per ounce.
Bid for Gold Reserve
Rusoro commenced a take-over bid (the "Bid") for 100% of the
shares of Gold Reserve Inc. ("Gold Reserve") on December 15, 2008.
It offers Gold Reserve shareholders 3 Rusoro shares for each Gold
Reserve share held, and Gold Reserve shareholders are free to
tender their shares to the Bid at any time prior to the Bid expiry
time of midnight at the end of January 21, 2009.
Based on the closing price of Rusoro shares on January 13, 2009
on the TSX Venture Exchange, the Bid on that date represented a
value to Gold Reserve shareholders of C$1.80 per Gold Reserve
share.
On January 5, 2009, Rusoro issued a press release confirming,
among other things, that its technical consultants had worked
diligently in preparing the Bid. Rusoro is pleased to confirm that
the involvement of its technical consultants (Micon International
and Scott Wilson Roscoe Postle, the "Rusoro Technical Consultants")
with the Bid was limited to the provision of signed consent letters
by the Qualified Persons who prepared independent Technical Reports
on behalf of Rusoro under the requirements of National Instrument
43-101 of the Canadian securities regulatory authorities and in
connection with Rusoro's Offer and Circular and Annual Information
Form and the provision of consents required by the U.S. Securities
and Exchange Commission in connection with Rusoro's Form F-10
registration statement. These consents are a matter of public
record and can be reviewed under the Gold Reserve public filing
record with both the Canadian and U.S. securities regulatory
authorities at www.SEDAR.com and www.sec.gov, respectively. Rusoro
has not requested any advice or information regarding Gold Reserve
from the Rusoro Technical Consultants and the Rusoro Technical
Consultants have not provided any advice or confidential
information relating to Gold Reserve to Rusoro, or vice versa.
Qualified Person: Mr. Gregory Smith, P.Geo, the Vice-President
Exploration of the Company, is the Qualified Person as defined by
National Instrument 43-101, and is responsible for the accuracy of
the scientific and technical aspects of this news release.
About Rusoro Mining
Rusoro is a junior gold producer with a large land position in
the prolific Bolivar State region of Venezuela. The Company
operates the Choco 10 and Isidora Mines, processing the ore through
the Choco 10 mill facility near the town of El Callao. The Company
produced over 100,000 ounces of gold in 2008 and is on schedule to
have two additional mines (Increible 6 and SREP) in production by
Q4 2009 and Q1 2010, respectively.
ON BEHALF OF THE BOARD
George Salamis, President
Cautionary Note Regarding Forward-Looking Statements
This press release, the Take-Over Bid and Circular, including
the schedules attached therein, the pro forma consolidated
financial statements of the Company, and some of the material
incorporated by reference into the Circular, contain certain
forward-looking information and forward-looking statements, as
defined in applicable securities laws (collectively referred to as
"forward-looking statements"). Forward-looking statements include
possible events, statements with respect to possible events, the
proposed transaction, related litigation, the business, operations
and financial performance and condition of each of Rusoro and Gold
Reserve and the proposed combined company, the future price of
gold, the estimation of mineral reserves and resources, the
realization of mineral reserve and resource estimates, the timing
and amount of estimated future production, costs of production,
expected capital expenditures, costs and timing of the development
of new deposits, success of exploration, development and mining
activities, permitting time lines, currency fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses, title disputes or claims, and limitations on insurance
coverage. The words "plans," "expects," "is expected," "scheduled,"
"estimates," "forecasts," "intends," "anticipates," or "believes,"
or variations of such words and phrases or statements that certain
actions, events or results "may," "could," "would," "might," or
"will be taken," "occur" and similar expressions identify forward
looking statements.
Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable by
Rusoro as at the date of such statements, are inherently subject to
significant business, economic, social, political and competitive
uncertainties and contingencies and other factors that could cause
actual results or events to differ materially from those projected
in the forward-looking statements. The estimates and assumptions of
Rusoro contained or incorporated by reference in the Circular which
may prove to be incorrect, include, but are not limited to, (1)
that Rusoro will be successful in acquiring 100% of the outstanding
Gold Reserve Equity, (2) that all required third party regulatory
and governmental approvals to the Take-Over Bid will be obtained
and all other conditions to completion of the transactions will be
satisfied or waived, (3) there being no significant disruptions
affecting operations, whether due to labour disruptions, supply
disruptions, power disruptions, damage to equipment or otherwise;
(4) permitting, development, expansion and power supply proceeding
on a basis consistent with Rusoro's current expectations; (5)
permitting and development proceeding on a basis consistent with
Rusoro's current expectations; (6) the exchange rate between the
Canadian dollar, the Venezuelan Bolivar and the U.S. dollar being
approximately consistent with current levels; (7) certain price
assumptions for gold; (8) prices for and availability of natural
gas, fuel oil, electricity, parts and equipment and other key
supplies remaining consistent with current levels; (9) production
forecasts meeting expectations; (10) the accuracy of Rusoro's
current mineral reserve and mineral resource estimates; and (11)
labour and materials costs increasing on a basis consistent with
Rusoro's current expectations.
Known and unknown factors could cause actual results or events
to differ materially from those projected in the forward-looking
statements. Such factors include, but are not limited to, risks
related to litigation; fluctuations in the currency markets;
fluctuations in the spot and forward price of gold or certain other
commodities (such as diesel fuel and electricity); changes in
interest rates; disruption to the credit markets and delays in
obtaining financing; inflationary pressures; risks arising from
holding derivative instruments (such as credit risk, market
liquidity risk and mark-to-market risk); changes in national and
local government legislation, taxation, controls, regulations and
political or economic developments in Canada, Venezuela or other
countries in which Rusoro does or may carry on business; business
opportunities that may be presented to, or pursued by Rusoro,
Rusoro's ability to successfully integrate acquisitions; operating
or technical difficulties in connection with mining or development
activities; actual results of exploration activities; the
possibility of cost overruns or unanticipated expenses; employee
relations; the speculative nature of gold exploration and
development, including the risks of obtaining and renewing
necessary licenses and permits; the impact of Venezuelan law on
Rusoro's operations; diminishing quantities or grades of reserves;
adverse changes in our credit rating; contests over title to
properties, particularly title to undeveloped properties; and the
occurrence of natural disasters, hostilities, acts of war or
terrorism.
In addition, there are risks and hazards associated with the
business of gold exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and gold bullion losses
(and the risk of inadequate insurance, or inability to obtain
insurance, to cover these risks). The following factors, amongst
others, related to the business combination of Rusoro and Gold
Reserve could cause actual results to differ materially from
forward-looking statements, including those contained in the
Circular: the Rusoro shares issued in connection with the Take-Over
Bid may have a market value lower than expected; the business of
Rusoro and Gold Reserve may not be integrated successfully or such
integration may be more difficult, time-consuming or costly than
expected; and the expected combination benefits from the
combination of Rusoro and Gold Reserve may not be fully realized or
not realized within the expected time frame. All of the
forward-looking statements made in the Circular are qualified by
these cautionary statements and those made in the Circular itself.
These factors are not intended to represent a complete list of the
factors that could affect Rusoro and the combination of Rusoro and
Gold Reserve. Additional factors are noted elsewhere in the
Circular and in the documents incorporated by reference therein.
Although Rusoro has attempted to identify important factors that
could cause actual results or events to differ materially from
those described in forward-looking statements, there may be other
factors that could cause results or events not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, undue reliance should
not be placed on forward-looking statements. Rusoro undertakes no
obligation to update publicly or otherwise revise any
forward-looking statements or the foregoing list of assumptions or
factors, whether as a result of new information or future events or
otherwise, except as may be required in connection with a material
change in the information disclosed in the Circular or as otherwise
required by law.
MORE INFORMATION AND WHERE TO FIND IT:
This press release does not constitute an offer to buy or an
invitation to sell, any of the securities of Rusoro or Gold
Reserve. Such an offer may only be made pursuant to a registration
statement and prospectus filed with the U.S. Securities and
Exchange Commission (the "SEC") and an offer to purchase and
circular filed with Canadian securities regulatory authorities.
Rusoro has filed with the SEC a Registration Statement on Form
F-10, a Tender Offer Statement on Schedule TO and other documents
and information, and has mailed an Offer and Circular (which is
filed as an exhibit to the Registration Statement and Tender Offer
Statement) to Gold Reserve shareholders and equity unitholders
(collectively, the "Equityholders") concerning the Offer and the
proposed combination of Rusoro and Gold Reserve. GOLD RESERVE
EQUITYHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE
TENDER OFFER STATEMENT AND OFFER AND CIRCULAR AND ANY OTHER
RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, BECAUSE THEY
CONTAIN IMPORTANT INFORMATION. Investors and Gold Reserve
Equityholders may obtain the documents free of charge at the SEC's
website, www.sec.gov. In addition, documents filed with the SEC by
Rusoro are available free of charge from Rusoro. You should direct
requests for documents to the Corporate Secretary, Rusoro Mining
Ltd., Suite 2164, 1055 Dunsmuir Street, Vancouver, British Columbia
V7X 1B1, telephone (604) 632-4044.
The TSX Venture Exchange has not reviewed and does not take
responsibility for the adequacy or accuracy of this release.
Contacts: Rusoro Mining Ltd. George Salamis President (604)
632-4044 or Toll Free: 1-800-668-0091 Email: gsalamis@rusoro.com
Rusoro Mining Ltd. Ross Gatensbury Investor Relations (604)
632-4044 or Toll Free: 1-800-668-0091 (604) 632-4045 (FAX) Email:
gates@rusoro.com Website: www.rusoro.com
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