Dia Bras Exploration Inc.
TSX VENTURE : DIB

Dia Bras Exploration Inc.

January 11, 2007 07:00 ET

Dia Bras Bolivar Pilot Mining Program: Expectations Exceeded for 2006

MONTREAL, QUEBEC--(CCNMatthews - Jan. 11, 2007) - Dia Bras Exploration Inc. (TSX VENTURE:DIB) is proud to announce that it exceeded its yearly forecasts in terms of tonnes of material processed, tonnes of concentrate produced and production value.

During 2006 the Company processed 96,575 DMT of material averaging grades of 10.63% Zn and 2.03% Cu, and produced 16,183 DMT of Zinc concentrate and 5,507 DMT of Copper concentrate for a total estimated production value of US$26.8 million.

In 2006, the Company billed a total of US$30.1 million, which included invoices for final settlement for concentrate shipped in late 2005. In the final billing process, the Company continued to benefit from increased metal prices.

Bolivar Pilot-Mining Program - Year 2006



Summary
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Total Operating
Estimated Cash
Production (1) Cost (1)
US$ US$
Material Processed Tonnes (Millions) (Millions)
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Actual 96,575 26.8 11.5
Forecast 90,000 16.0 10.0
Over (under) 6,575 10.8 1.5
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Production
Zn Value
Concentrate in US$
Average Production (Millions)
Zinc Grade Recovery (DMT) (1)
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Actual 10.63% 91.90% 16,183 18.1
Forecast 11.00% 85.00% 14,800 10.4
Over (under) (0.37)% 6.90% 1,383 7.7
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Production
Cu Value
Concentrate in US$
Average Production (Millions)
Cooper Grade Recovery (DMT) (1)
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Actual 2.03% 80.59% 5,507 8.7
Forecast 2.50% 75.00% 6,400 5.6
Over (under) (0.47%) 5.59% (893) 3.1
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Financial Results (in US$)
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Actual
(unaudited)
Year ended
December 31,
2006
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US$
Net smelter production value 26.8 M
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Direct operating cash costs 11.5 M
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Direct operating cash margin 15.3 M
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Net smelter production value and
Cash Operating Costs / Tonne Processed (in US$)
---------------------------------------------------
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Actual
(unaudited)
Year ended
December 31,
2006
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US$
Net smelter production value (1) 277.78
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Direct operating cash costs (1) 119.64
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Gross margin before amortization (1) 158.14
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During the fourth quarter ended December 31, 2006, the Company processed 27,797 DMT of material averaging grades of 8.61% Zn and 1.45% Cu, with the month of October contributing more than 9,900 DMT, the most productive month in terms of tonnage processed since the beginning of the program. Recoveries at the Malpaso mill averaged 91.70% for zinc and 78.86% for copper resulting in a production of 3,761 DMT of zinc concentrate and 1,114 DMT of copper concentrate during the quarter. Material grades were lower than the 11% Zn and 2.5% Cu average forecast for the quarter as high metal prices allowed the Company to process lower grade material while maintaining its targeted cash flow.

The value of the total concentrate production for the quarter, based on average monthly zinc and copper prices, is estimated at US$7.4 million, which exceeds the early 2006 forecast of US$4.0 million per quarter. Direct operating costs for the quarter, including shipping of concentrate, amounted to approximately US$3.6 million compared to the forecast of US$2.5 million. These increased costs are mostly due to increased shipping and transportation costs. Sustained high prices for zinc and copper during the quarter combined to result in continued positive cash flow, which financed the exploration and capital expenses as well as property payments.

Bolivar Pilot-Mining Program - Q4 2006



Summary
---------------------------------------------------------------------
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Total Operating
Estimated Cash
Production (1) Cost (1)
US$ US$
Material Processed Tonnes (Millions) (Millions)
---------------------------------------------------------------------
Actual 27,797 7.4 3.6
Forecast 22,500 4.0 2.5
Over (under) 5,297 3.4 1.1
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Production
Zn Value
Concentrate in US$
Average Production (Millions)
Zinc Grade Recovery (DMT) (1)
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Actual 8.61% 91.90% 3,761 5.5
Forecast 11.00% 85.00% 3,700 2.6
Over (under) (2.39)% 6.90% 61 2.9
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Production
Cu Value
Concentrate in US$
Average Production (Millions)
Cooper Grade Recovery (DMT) (1)
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Actual 1.45% 78.86% 1,114 1.9
Forecast 2.50% 75.00% 1,400 1.4
Over (under) (1.05%) 3.86% (286) 0.5
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(1) Non-GAAP measures: The Company reports production value, production costs, net smelter revenue per tonne, direct operating cash costs per tonne and gross margin before amortization per tonne even if it is a non-GAAP measure to inform about the approximate value of the quarter sales, isolate the measure of pilot-mining direct operation costs activities less amortization and depreciation. The Company believes this is useful supplemental information however it should not be considered as a substitute for measure of performance prepared in accordance with GAAP.

The Company's total concentrate production is sold to MRI Trading AG (MRI), a Swiss-based, privately-owned commodity trading company, pursuant to a standard concentrate purchase agreement.

The pilot-mining program provides essential data on costs, logistics, grade, recovery and metallurgy that will serve for a feasibility study on the Bolivar property. The short-term objective of the program is to generate sufficient cash flow from zinc and copper concentrate production to finance development and exploration at the Bolivar mine and elsewhere on the Bolivar project.

It is important to note that Bolivar is not at a commercial production stage. The completion of a feasibility study is required to confirm the economic viability of a property before it is brought into commercial production. The Company expects completing its exploration program on the Bolivar property and extensions in order to achieve a feasibility study in 2007.

Working capital and cash on hand

The Company currently has a working capital of CDN$24.0 million (unaudited) including $19.5 million (unaudited) in cash.

Malpaso mill

The Company officially inaugurated in December 2006 its 500 tpd El Triunfo circuit at the Malpaso mill, thereby increasing its capacity to 850 tpd.

The Company is currently initiating a bulk sampling program from the La Bamba property in its silver Cusi mining camp. First results of milling will be published subsequent to the first quarter 2007.

Dia Bras forecasts 2007 pilot mining production at Bolivar of 96,000 tonnes of material averaging 7.5% Zn and 1.5% Cu, because projected higher metal prices will allow the Company to maintain its targeted cash flow.

About Dia Bras

Dia Bras is a Canadian exploration mining company focused on precious and base metals in the State of Chihuahua, in northern Mexico. The Company is committed to developing and adding value to its assets - the Bolivar copper-zinc project and the newly acquired Cusi silver mining camp. The Company trades on the TSX Venture Exchange, under the symbol "DIB".

Forward-looking statements: Except for statements of historical fact, all statements in this news release, without limitation, regarding new projects, acquisitions, future plans and objectives are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Dia Bras Exploration
    Thomas L. Robyn
    Executive Chairman
    514-393-8875 poste 241
    or
    Dia Bras Exploration
    Rejean Gosselin
    President
    514-393-8875 ext. 241
    or
    Sun International Communications
    Nicole Blanchard
    Managing Partner
    450-627-6600