Intrepid Mines Limited

Intrepid Mines Limited

April 29, 2008 16:15 ET

Intrepid Reports Operating Activities for the Quarter Ended March 31, 2008

Paulsens delivers second consecutive quarter exceeding 20,000 fine ounces

TORONTO, ONTARIO--(Marketwire - April 29, 2008) - Intrepid Mines Limited (TSX:IAU)(TSX:IXN)(ASX:IAU), an international precious metals production, development and exploration company, reports operating activities for the quarter ended March 31, 2008. All dollar figures are in United States dollars unless otherwise indicated. Intrepid today filed its Activities Report for the quarter ended March 31, 2008 which is available on the Intrepid website and at A summary of that report is provided below.



- The merger with Emperor Mines Limited completed on 11 March 2008 delivering a dynamic and well funded international gold producer, developer and explorer to the market, listed on the TSX and ASX.

- Subsequent to the quarter end, Brendan Gill, Chief Financial Officer submitted his resignation to pursue another business opportunity. A search for a new Chief Financial Officer has already commenced.


- Another above-budget quarter from Paulsens with gold production of 20,369 fine ounces, down 5 percent (prior quarter 21,426 ounces). The second consecutive quarter exceeding 20,000 fine ounces.

- Site cash costs increased to $432 per ounce, up 21 percent (prior quarter $357 per ounce) primarily due to a short term reduction in capitalised development, increased production from development drives and the fixed cost impact of the 5 percent volume variance.


- Casposo project - updated feasibility study on schedule for completion June 2008.

- Selection process for a Casposo EPCM contractor initiated.


- Paulsens Stage 1 drilling completed - successful program points to mine life extension. Previously unreported final hole, PDU381, reporting a cut grade of 33.8 grams per tonne gold over a true width of 1.8 metres. Stage 2 program underway.

- Taviche (Mexico) drilling Phase 1 program complete and results published. Drilling resumes in mid- 2008. A program of 4,000 metres is planned.

- Subsequent to the quarter end, the Company amended its Alliance agreement in respect of the Tujuh Bukit project to earn a further 10 percent interest, up to 80 percent, in the gold-silver-copper project in eastern Java through funding exploration activity.


- Gold revenue was $13.8 million up 10 percent (prior quarter $12.5 million).

- Record spot price achieved during the quarter of A$1,075 per ounce.

- Cash of $58.7 million (incl $11.9 million held on behalf of DRD Gold), Westpac finance facility $9.2 million.

- Hedge position 33,310 ounces (prior quarter 43,971 ounces)


3 months to 3 months to 3 months to 3 months to
March 31, December September June 30,
2008 31, 2007 30, 2007 2007
Site Production
Cash Cost $432/oz $357/oz $426/oz $467/oz
Total Cash Cost $456/oz $378/oz $442/oz $485/oz
Gold produced 20,369oz 21,426oz 16,690oz 15,854oz

In the March 31, 2008 quarter, Intrepid produced 20,369 fine ounces of gold at a total site production cash cost of $432 per ounce. Total revenue for the quarter was $13.8 million. Cash balance at the period end was $58.7 million. In the quarter, 10,661 ounces were delivered into scheduled hedges leaving, 33,310 ounces remaining hedged (as per the original schedule) at an average price of A$627 per ounce. The Westpac project finance facility balance at March 31, 2008 was $9.2 million.

Paulsens produced another solid quarter with gold production in excess of 20,000 fine ounces. Average quarterly mill head grade was essentially unchanged at 8.48 grams per tonne compared to the previous quarter's 8.60 grams per tonne, maintaining the significant step change (in excess of 20 percent increase) compared to the first nine months of 2007, and confirming the turnaround.

Stope production decreased in the current quarter compared to the record levels of the December 2007 quarter, but was complemented by the strong development production described above. Stope production constituted 76 percent of total ore produced over the quarter, more in line with the long-term mine average than the 86 percent reported last quarter. The reconciled average stoping grade for the quarter was 8.71 grams per tonne, similar to the previous quarter's 8.78 grams per tonne. Stoping ounces, whilst lower than the previous quarter in light of the tonnage reduction, were higher than any other quarter in the 2007 calendar year.

Development yielded 18,426 tonnes of ore at an average reconciled grade of 7.55 grams per tonne (11,875 tonnes at 7.68 grams per tonne in the prior quarter). Development tonnage rose substantially as the ratio of ore to waste development improved, whilst the overall advance was similar to the last nine months of operations. The grade of the development ore was essentially on track with the levels seen over the previous two quarters. This consistently high development grade bodes well for future stope production.


In mid March, an estimated four (4) month process to update the original March 2007 AMEC Feasibility Study was commissioned with AMEC. The purpose is to reflect the Resource update from November 2007, to generate a corresponding Reserve considering various pit optimisations and throughput rates, to capture the latest cost escalations in combination with recent commodity price increases, to allow for the switch from diesel generated power to National Grid power and to encapsulate the recently agreed Infrastructure Trust in the project economics.

The selection process for a suitable Engineering, Procurement and Construction Management contractor to work with Intrepid in building Casposo was initiated after discussions with a wide range of possible companies. A shortlist of preferred companies was generated and more detailed review will follow leading to a tender and certified bid process.

Intrepid continued to work on preparation for obtaining the required sectoral permits needed for the mining operation and to formally establish all protocols and reporting standards described in the Company's Environmental Impact Declaration DIA. This process is expected to accelerate once the EPCM company is selected and basic engineering requirements are identified.


Australia: Paulsens

At the Paulsens Mine, five underground holes were drilled during Stage 1 of a program designed to grow resources and reserves. The program has returned four excellent intercept results. These intercepts are comparable to the best previous intersection in this area of the mine, which is below the current 300 metre depth mine planning floor. One other intercept is interpreted as being truncated by a late intrusive dyke. Intervals below are reported by core intersection and estimated true width and with true and cut assay intervals (100 grams per tonne top cut off).

The results confirm the concept of a structural repeat or offset to Paulsens' main producing area, the Upper Zone. The current target area, half the size of Upper Zone, was previously tested by only six surface holes - the best intersection being PLRCD 0411 (12.8 metres at 8.5 grams per tonne gold). The new zone is 40 metres vertically below the current decline access and can be integrated into existing mine design and infrastructure at minimum cost.

Paulsens Stage 1 Resource Extension Program - Drill Hole Results
Drill hole Intersection True Assay g/t Assay g/t gram.metres
width metres width (uncut) (100g/t cut) (grams per
metres tonne (cut)
X true width)
PDU381 2.5 1.8 73.31 33.78 60.8
PDU382 10.4 8.9 10.2 9.2 81.9
PDU383(1) 3.2 2.5 6.7 6.7 16.8
PDU384 7.7 3.5 117.3 14.9 52.1
PDU385 4.5 3.3 16.3 16.3 53.8
Note 1 PDU383 intersection was truncated by a dyke

The Stage 1 underground holes were drilled from near the base of the current mine ramp and were guided by the re-interpretation and extension of a significant fault exposed by development work in a separate area of the mine. The re-interpretation postulated that several previous drill intersections of suspected Upper Zone mineralisation that were spatially incongruous with the extension of the existing ore body may represent a faulted offset of the mineralisation. The Upper Zone currently hosts the majority of Paulsens production and its extension is key to increased mine life.

Geological confirmation of the fault offset was provided when all the drill holes intersected their target; a zone of sulphide enriched quartz vein of similar dimensions and orientation to the existing Upper Zone. The mineralisation was present in the areas predicted by the mine team.

The four holes cutting the entire mineralised zone returned assays with grades consistent with ore currently being mined in the Upper Zone, which has been the basis for the excellent mine performance of the past six months. Four of the intersections rival the best results seen to date in drilling in this area of the deposit. These latest drill results confirm the existence of the new zone and can be used to build new resource and reserve estimates for the mine. A second stage drill campaign is underway and will continue well into 2008 with the goal to double the mine's current operating life. If the Company's expectations can be met, this possible increase in resource will realise substantial additional value at Paulsens.

Minimal surface exploration work was performed on the Paulsens regional (Ashburton) property package as a whole during the quarter. Renewed exploration will focus on near-mine targets such as Paulsens East and West zones (similar in concept to the Apollo Zone). In addition, the company will continue to explore for other gold occurrences within trucking distance of the Paulsens mill and will proceed with an evaluation of the existence of potential iron ore on the regional property, primarily in outcrop area on the southern limb of the tenement package in the Ashburton range.

Argentina - Casposo Continuing Exploration

Exploration at the Casposo Project continued during the period as Argentine staff completed mapping in areas located south of the main Kamila and Kamila Southeast Extension zones. In addition to mapping, the Company has designed a drill program to be executed in the second quarter of 2008. Planned drilling will include continued resource drilling at Kamila and resource development drilling at the Kamila SEXT, Mercado and Cerro Norte.

Argentina Regional Exploration

The Cordillera west of the Uspallata graben in San Juan Province is characterized by a number of historic gold silver districts extending over an area of approximately 1,500km2. These districts comprise both low- and high-sulphidation precious mineral systems and have been actively, if intermittently, explored over the past twenty years. Intrepid has 19 applications and mineral exploration concessions within this very prospective belt. During the period Intrepid geologists completed a property wide prospecting and mapping program in the Sarah Concessions in the historic Chita mineral area 25 kilometres north of the Casposo property. The area is seen as having potential for porphyry-related gold systems. Analytical results of the evaluation are pending.

Indonesia - Tujuh Bukit

In April 2008, the Company entered into arrangements to amend its Alliance in respect of the Tujuh Bukit project in Indonesia. The revised Alliance Agreement sets out the framework for the Company to enter into a joint venture directly with PT Indo Multi Niaga (PT IMN), excluding former additional investors, at a cost of A$2.5 million, to earn up to 80 percent (previously 70 percent) in the gold-silver-copper project in eastern Java through funding exploration activity.

Exploration at the Tujuh Bukit Project has been ongoing and has included grid extensions, soil geochemistry, and further diamond drilling at Tumpangpitu Prospect, and mapping, grid establishment and the commencement of soil sampling at Salakan Prospect. Ten diamond drill holes were completed during the quarter from Zone C of the Tumpangpitu Prospect. Results are consistent with results previously reported for holes GT-07-15 to GT-07-20 and at this stage include preliminary results from several of the holes. Drilling is being undertaken on an approximately 80 metre grid. Detailed geological logs are being compiled, and consideration is being given to undertaking some preliminary metallurgical testing of the material drilled to date.

A second drilling rig was deployed to site in February. This rig has a greater depth capacity than the first rig and is being used to test both the oxide gold-silver zone identified in holes 15 - 20, and to test deeper interpreted porphyry copper-gold targets.

As the Indonesian Forestry Law restricts non-forestry activities within protected forest areas, Intrepid's alliance partner, PT IMN, is working with relevant Indonesian authorities to review forest land status and, where relevant, is working through a prescribed process for potential reclassification of land from protected forest to a status that could allow open pit mining if the exploration activities supported such decision.

A baseline flora and fauna survey has been completed with the report expected to be completed during May 2008. A brief scoping study for a proposed demographic baseline study was also completed.

Mexico - Taviche

Intrepid optioned the Taviche property located in Oaxaca State, Mexico in 2006 from Plata Panamericana S.A. de C.V. The Taviche Property comprises two concessions totaling 13,724 hectares. Subsequently in 2007, Intrepid entered into an agreement with Aura Silver Resources Inc. whereby the companies will jointly earn a 70 percent interest in the concessions. Aura Silver completed funding of the first year agreement commitments with Plata Panamericana, and all future expenses are jointly funded. Intrepid acts as operator and began field activities in January 2007.

The Phase 1 drilling at West Taviche was terminated in late January and all results have been included in a recently filed NI43-101 document. All drill sites have been reclaimed and await final inspection from the Mexican government. The drill results suggest that the Noria prospect warrants additional exploration but at greater depths and that the Portillo area needs to be more carefully evaluated. New areas, including the Rosario vein, South San Carlos vein and the Higo Blanco vein/jasperoid complex all located in the East Taviche Concession, are being considered as drill targets and proposals for this work are being developed. Also in the period, the Taviche JV began reconnaissance evaluation of the Alma Delia Concession. Alma Delia is contiguous to, and south of, the Taviche property.

Table 1. Portillo Prospect - Selected Assay Intervals - 2008 Phase I Drilling Program

Hole No. Interval Assay
From (m) To (m) Length (m) Gold (g/t) Silver (g/t)
FA/AA Grav.
EP01-08 70.75 92.8 22.05 2.12 17
including 70.75 72.95 2.2 5.69 9
and 74.1 76.65 2.55 4.89 4
and 87.6 92.8 5.2 2.8 41
EP03-08 52.7 56.2 3.5 6.98 22
Including 52.7 53.55 0.85 23.6 22
EP06-08 166.65 168.25 1.6 2.68 less than 3
and 176 177.65 1.65 0.825 234

Holes EP02-08, EP04-08 and EP05-08 produced no significant results

A Quality Control sampling program of blanks and duplicates has been instituted to monitor the integrity of all assay results. All core samples are split at the Oaxaca core facility and shipped to SGS Minerals in Durango, Mexico, where they are dried, crushed, split and 50 gram pulp samples are prepared for analysis. Gold and silver are determined by fire assay with an atomic absorption (AA) finish and ICP for copper, lead and zinc.

El Salvador - San Cristobal Property

In 2007, the San Cristobal Property comprised three exploration licenses totaling approximately 90km2. The licenses are wholly owned by Intrepid and are situated in eastern El Salvador at the northwestern end of the Nicaragua depression. This geological feature contains the largest volcanic-hosted epithermal breccia-vein complex in El Salvador. The graben contains several caldera complexes which are the setting for numerous historic gold-silver mines and mining camps. The former Montecristo mine lies within the San Pedro property.

In 2007 exploration continued to be delayed at the Rio Seco prospect drill program due to permitting and follow-up of 2006 results at the Minitas and San Jacinto prospects was deferred due to budget considerations. In 2008, the company hopes to receive its environmental permit to pursue its drilling program at Rio Seco.


- The merger with Emperor Mines Limited was completed on 11 March 2008 delivering a dynamic and well funded international gold producer, developer and explorer to the market, listed on both the TSX and ASX.

As at 31 March 2008, issued securities consisted of:

- issued capital of 427,902,350 shares comprising 413,033,497 ordinary shares of Intrepid Mines Limited and 14,868,853 exchangeable shares of Intrepid NuStar Exchange Corporation

- 9,224,535 unlisted options to acquire ordinary shares

- 7,728,000 unlisted warrants to acquire ordinary shares

The exchangeable shares are held by Canadian former shareholders of Intrepid Minerals Corporation who elected to defer capital gains tax consequences of the July 2006 merger. All remaining exchangeable shares will compulsorily convert into ordinary shares by no later than July 2009.


As is customary, the company will host a conference call today at 6:00 pm eastern time (8:00am - April 30 - Brisbane time) to discuss the results. Brad Gordon, CEO of Intrepid Mines, will chair the call. To participate in the conference call, please call five minutes prior to the scheduled start time. In North America the toll free dial-in number is: 1.888.300.0053, the International dial-in number is: 1.647.427.3420, and in Australia the toll free dial-in number is: 1.800.287.011 (The Conference ID #44898753).

For those unable to participate in the conference call at the scheduled time, an audio replay of the call will be available from April 29, 2008 until May 6, 2008. Replay access number is: 1.800.695.3685 or 1.402.220.1757 (Conference ID #44898753).

A recorded MP3 version of the call will also be available at for 90 days.

On behalf of the Board of Directors of Intrepid Mines,

Brad Gordon, Chief Executive Officer

Qualified Person:

The information in this report that relates to Exploration Results in Australia and the Americas is based on information compiled by or under the supervision of William McGuinty, who is a member of Association of Professional Geoscientists of Ontario, Canada. William McGuinty is a full-time employee of Intrepid Mines Limited. William McGuinty 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". William McGuinty consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results in Indonesia is based on information compiled by or under the supervision of Malcolm Norris, who is a member of The Australasian Institute of Mining and Metallurgy. Malcolm Norris is a full-time employee of Intrepid Mines Limited. Malcolm 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". Malcolm Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Intrepid Mines:

Intrepid Mines Limited is an international gold and silver production, development and exploration company. The Company's producing property is the Paulsens Gold Mine, located in northwestern Australia. The Company's advanced development property is the Casposo Project located in San Juan Province, Argentina. The Company's exploration properties are located in Argentina, Australia, Canada, El Salvador, Indonesia and Mexico. The issued capital is 427,902,350 shares comprised of 413,061,497 ordinary shares of Intrepid Mines Limited on the TSX (TSX:IAU) and ASX (ASX:IAU) and 14,840,853 Exchangeable Shares of Intrepid NuStar Exchange Corporation quoted on the TSX (TSX:IXN).


This release contains certain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. The TSX and ASX has neither approved nor disapproved the information contained in this press release. Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes "forward-looking statements". Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other ecological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors.

Statements relating to gold reserve and 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. The drille programme at Paulsens is insufficiently advanced to define a revised reserve and resource estimate for Paulsens and it is uncertain if further drilling will result in the determination of a revised reserve and resource statement at Paulsens, and therefore an extension of the mine life. The drill programmes at Tujuh Bukit, Kamila/Mercado and Taviche are insufficiently advanced to define a reserve and resource estimate for these properties and it is uncertain if further drilling will result in the determination of a reserve and resource statement at these properties.

Circumstances or management's estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.

ABN: 11 060 156 452

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