Arehada Mining Limited

Arehada Mining Limited

August 13, 2009 21:47 ET

Arehada Reports Second Quarter Results

TORONTO, ONTARIO--(Marketwire - Aug. 13, 2009) - Arehada Mining Limited (TSX:AHD) ("Arehada") today reports its second quarter results as well as providing an update on its financial conditions.

Revenue for the quarter was $1,815,960 from the mining of 34,897 tonnes of ore, compared to $4,587,490 from 132,996 tonnes in the same quarter last year. The net loss of $1,384,217 or $0.008 per share in Q2 2009 compares to earnings of $933,360 or $0.005 per share for the same quarter in 2008. The loss is due to the restarting of the mining operations in May, and the gradual ramp up of production.

During the quarter, Arehada conducted mining operations at a rate of approximately 712 tonnes per day and operated 48 days during the period which is significantly less than the average rate of 1,536 tonnes per day during the same period last year due to the restarting of the mine and targeting higher grades.

Head grades of approximately 1.53% zinc and 2.24% lead resulted in an average combined recovery rate of 90%. Silver head grades of 72.62 grammes per tonne met a 73% recovery factor from the lead concentrate. These grades are significantly improved over the average grades for 2008 and we expect them to continue to improve for the balance of 2009.

The Company is also pleased to report that it commenced interest payments on May 31st, 2009 to the Agricultural Bank of China. As at July 24, 2009, a total of RMB3,160,113 (Cdn$505,618) has been repaid to the bank. The Company expects to commence principal payments in September 2009.

The Company has received the first repayment of RMB1 million (Cdn$170,000) of the related party loan from Baiyinhanshan Mining Group Limited, a company controlled by Messrs. Steve Fan Wang and Tom Zhen Wang, directors, officers and controlling shareholders of Arehada. Baiyinhanshan plans to make regular monthly repayments to Arehada on this loan and the August payment was the first of such repayments.

"We are very pleased that the Company is back in production", commented Steve Fan Wang, Chairman of the Board. "With base metal prices increasing in recent months, the Company was able to resume its operations. Although the second quarter saw us operating for only one month, we are encouraged by the results so far. We believe the strong recovery of economy in China will continue to increase base metal prices."

About Arehada Mining

Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China.

Arehada has completed construction of a zinc processing plant, to produce zinc calcine and sulphuric acid.

Forward Looking Information

The above contains forward looking information that is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, costs and supply of materials relevant to the mining industry, extent of resources actually contained in mineral deposits, actual recoveries achieved in processing ore, technological change, change to regulations affecting the mining industry, risks associated with mining operations in China, environmental and safety regulations risks, and risk associated with failure to obtain required regulatory or third party consent. Generally, forward looking information can be identified by the use of forward looking terminology such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information in this release include statements regarding the Company's near-term objectives, anticipated increase in base metal prices and the Company's plan to adjust its near term objectives. Although we believe the expectations reflected in our forward looking information are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. Readers should not place undue reliance on forward looking information.

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