Intrepid Mines Limited
TSX : IAU
ASX : IAU

Intrepid Mines Limited

August 27, 2010 08:30 ET

Intrepid Mines Limited: Tujuh Bukit Update on Preliminary Assessment of Oxide Deposit

- Excellent Gold Recoveries Achieved by Preliminary Heap Leach Testwork

- Potential for Improved Project Economics by Processing Large Volumes of Lower Grade Material

- Preliminary Economic Assessment (PEA) Of a Heap Leach Operation Will Be Completed by the End of 2010

BRISBANE, AUSTRALIA--(Marketwire - Aug. 27, 2010) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) (the "Company") advises that preliminary column leach results indicate excellent gold recoveries can be expected from the gold-silver oxide deposit at Tujuh Bukit (see Intrepid news release dated 15 December 2009.)

Preliminary column leach testwork is being performed at Kappes Cassiday in Reno, Nevada. Testwork is being performed at crush sizes of minus 25mm and minus 9.5mm on three composited samples from the completely oxidised zone and one sample from the transition zone.

Preliminary Column Leach Testwork Results

Results to day 29 for gold indicate a recovery range of 67% to 85% for the completely oxidised zone and 60% to 66% in the transition zone, which has been identified above the deeper zone of copper-gold porphyry mineralisation (see news release dated 25 May 2010.) Silver recoveries range from 17% to 52%.

These results remain preliminary until residue grades are assayed at completion, expected to be day 60. However, these initial results are very encouraging and suggest that a heap leach processing scenario may present an attractive development option. The implications for cut-off grade, tonnage throughput, capital costs and associated issues are currently under review as part of the Preliminary Economic Assessment ("PEA").

These results can be compared to the grinding circuit results (see news release dated 16 December 2009) where base line cyanidation tests completed over 24 hours at P80 75µm under non-CIL conditions ranged from 84% to 90% recovery for gold (average being approximately 87%) and 67% to 85% for silver (average being approximately 80%). The recovery range in the transition zones was 51% to 89% for gold and 15% to 81% for silver.

Brad Gordon, the Company's CEO, commented: "With the heap leach testwork results to date, the Oxide Zone could shape up to be a significant producer in its own right, quite separate from the huge potential of the underlying porphyry system."

Current Inferred Resource G-T Curve

The grade-tonnage curve below is the current resource as estimated by Independent Consultants Hellman and Schofield Pty Ltd and reported in accordance with the JORC Code and National Instrument 43-101. It includes Zones A, B and C in a single estimate, up to and including Hole GTD-135 (which was completed in January 2010). A further 25 holes have been drilled into the oxide targets since this estimate was compiled.

Based on 100% gold recovery, at a gold-equivalent (see below) cut-off of 0.5 grams per tonne, the Inferred Resource is 95.3 Mt at 0.66 g/t gold and 25.9 g/t silver for contained ounces of 2.0 MOz gold and 79.4 MOz silver. Future metal equivalents will be based upon recoveries once metallurgical characteristics have been more accurately determined.

A new resource estimate will be compiled by the end of 2010, in which an updated metal equivalence formula will likely be used to take into account the enhanced metal recovery for gold over silver using heap leach.

Cut-Off Tonnes Grade (g/t) Contained Oz (MOz)
(AuEq) Mt Au Ag AuEq Au Ag AuEq
0.3 170.7 0.46 19.3 0.76 2.5 105.9 4.2
0.4 124.0 0.56 23.0 0.91 2.2 91.7 3.6
0.5 95.3 0.66 25.9 1.06 2.0 79.4 3.2
0.6 73.3 0.76 28.9 1.21 1.8 68.1 2.8
0.7 57.9 0.87 31.9 1.36 1.6 59.4 2.5
0.8 46.4 0.97 34.6 1.51 1.5 51.6 2.2
0.9 38.4 1.07 37.1 1.65 1.3 45.8 2.0
1.0 31.9 1.17 40.0 1.79 1.2 41.0 1.8
1.1 27.3 1.26 42.6 1.91 1.1 37.3 1.7
1.2 24.1 1.32 45.0 2.01 1.0 34.9 1.6
1.3 21.0 1.39 47.4 2.12 0.9 32.0 1.4
1.4 18.5 1.47 49.4 2.23 0.9 29.3 1.3
1.5 16.4 1.54 51.5 2.33 0.8 27.2 1.2
(Significant figures used are to minimize round-off errors and do not imply precision)

Forward-looking statements

This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. . The information in this announcement relates to recoveries which are indicated in the event that the Tujuh Bukit project proceeds to production, although production is dependent on and subject to various risks and uncertainties, as set out herein.

Statements relating to gold resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate.

Forestry Activities

The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The Zone A, Zone B and Zone C resources fall within a protected forest area. Intrepid's Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. While similar reviews have led to the granting of reclassifications, there is no assurance that the forestry reclassification will take place in this instance.

Qualified Person

The information in this announcement that relates to mineral resources is based on information compiled by or under the supervision of Dr. Phillip Hellman, who is an independent consultant to Intrepid Mines Limited. Dr Hellman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an Independent Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and an Independent Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Dr Hellman consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Dr Hellman has undertaken independent verification sampling and assaying of drill core with a close agreement of results with those previously reported. A 40 x 40 x 6 metre block model was used for the quoted estimates.

The information in this announcement that relates to exploration results is based on information compiled by or under the supervision of Malcolm Norris, who is a full-time employee of Intrepid Mines Limited. Mr. Norris has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Sample Analysis

Intrepid exercises a strict chain of sample custody in its drilling program at Tujuh Bukit. Joint Venture personnel remove core from the drill rig and deliver it to a project geologist who logs the core and marks the core into two metre sample intervals. Intrepid and Joint Venture personnel supervise the immediate splitting, sawing and bagging of samples, and packaging of groups of samples for dispatch to the laboratory. The remainder of the split core remains on site.

Samples are securely packaged, batched, and then transported under supervision to Intertek's laboratory facility in Jakarta. At the laboratory, the samples are prepared by crushing and pulverizing and a 30 gram charge is assayed for gold by conventional fire assay and/or atomic absorption methods. Multi-element ICP analysis is carried out using a multi-acid digestion process. All samples that contain silver and/or copper, lead, and zinc values that exceed the upper detection limits for ICP are re-analysed by conventional atomic absorption methods to determine the absolute values of these metals.

Gold Equivalence Statement

Gold equivalence ("AuEq") has been calculated based on a US$650/oz gold price and US$11/oz silver price. Metallurgical testing results achieved recoveries of approximately 87% for Au and 80% for Ag where a grinding circuit processing route is used. This is expected to change if a heap leach scenario improves the project economics. It is the Company's opinion that the gold and silver included in the metal equivalent calculation have a reasonable potential to be recovered.

ABN: 11 060 156 452

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