Mustang Minerals Corp.

Mustang Minerals Corp.

February 17, 2010 08:30 ET

Mustang Minerals Corp. Makwa Nickel Project Update

TORONTO, ONTARIO--(Marketwire - Feb. 17, 2010) - The Board of Directors of Mustang Minerals Corp. (TSX VENTURE:MUM)(FRANKFURT:NJF) is pleased to announce the results of an updated Mineral Reserve estimate for the Makwa Nickel Project located in southeast Manitoba. The reserve update was completed by Micon International Limited (Micon). Highlights of the updated Mineral Reserve include increased project tonnage and contained metal. An updated project economics model estimates Nickel cash costs at US$3.91 per pound and US$2.70 including by-product credits. Mustang also is reviewing the potential to significantly increase metal production from the Makwa Project by including feed from its Mayville Cu-Ni Resource.

The updated reserve is based on the October 14, 2009 resource model and estimate completed by Micon and announced in the press release of October 26, 2009. Recently completed geotechnical studies provided optimum pit slope design and an open pit mine design with production schedule was completed by Micon as an update to the mine design contained in the 2008 Prefeasibility Study ( see Mustang Press Release dated May 8, 2008). Whittle software was used to develop the economic open pit outline, based on cost and economic parameters developed in the Prefeasibility Study and metal prices stated below.

The Updated Mineral Reserve Estimate as of February 05, 2010 is as follows:

Reserve Tonnes Nickel Copper Platinum Palladium Contained Contained
category (000) % % g/t g/t Nickel oz Platinum
(tonnes) + Palladium
Proven - - - - - - -
Probable 9,855 0.541 0.113 0.094 0.339 53,276 137,194
Total 9,855 0.541 0.113 0.094 0.339 53,276 137,194
g/t equals gram/tonne

1. Metal prices ($US) used for the mine design were- Nickel $8.00/lb, Copper $2.20/lb, Cobalt $20.00/lb, Platinum $1500.00/oz and Palladium $350.00/oz, and a $CAD:$US exchange rate of 0.90.

2. Unit operating costs were as developed in the Prefeasibility Study.

3. Metal recoveries to concentrate and concentrate grade values were updated from the values used in the Prefeasibility Study as a result of 2009 metallurgical testing.

4. The average Net Smelter Return value of the reserve material is calculated as CAD$60.21 of which nickel contributes 87%, copper 7%, cobalt 2%, platinum 1% and palladium 3%.

5. The reserve estimated above includes allowances for dilution and mining losses.

Economic viability of the mineralization was demonstrated by a discounted cash flow model, developed by Micon for the project, with a production rate of 1 million tonnes per year, a project operating life of 9.8 years and with preproduction capital costs and operating costs as developed in the Prefeasibility Study. Metal prices and exchange rate were as noted above in point 1 above except for copper for which a price of $US 3.00/lb was used. Sustaining capital costs were adjusted from the Prefeasibility Study values to account for the longer projected mine life. The cash flow model indicates a positive net present value after tax at a discount rate of 7% and Micon concluded that this demonstrates the reserve designation of the mineralization.

Increased Metal and PGM from Previous Mineral Reserve

Compared with the 2008 Reserve estimate, this December 31, 2009 estimate represents an increase in contained metals of over 17Mlb (17%) nickel, 4Mlb (21%) copper and 29,000 oz (28%) of platinum plus palladium. The approximate equivalent percentage increases are shown in parentheses.
From the cash flow model, the life-of-mine cash cost of nickel production is $US 3.81 and with by-product credits is $US 2.70.

Project Upside with Mayville Resource

The Company sees significant upside to the Makwa project through the addition of additional resource to further amortize capital costs associated with the project. Mustang is currently evaluating the potential of sourcing additional mill feed from Mustang's Mayville Cu-Ni Property which is located approximately 35 km by road from Makwa. The Company is evaluating the potential for a higher grade core to the current estimated resource at Mayville (stated below) which would positively impact and provide significant upside to the overall project economics.

Mayville Property M2 Zone Mineral Resource Estimate- January 2007-
Scott Wilson RPA
Category Tonnage Nickel Copper Nickel Copper
Tonnes % % pounds pounds
Indicated 21,947,000 0.20 0.48 94,261,000 232,023,000
Inferred 1,851,000 0.20 0.43 8,109,000 17,584,000
Resources that are not reserves do not have demonstrated economic
For details see press release dated Feb.19, 2007.

Exploration Commences

Mustang has commenced drilling on exploration and project related targets at the Makwa Property area. An update will be released under separate cover.

Ian Ward P.Eng, Senior Vice President of the Company, is the Qualified Person for the Makwa project information and this press release.

To find out more about Mustang Minerals Corp. (TSX VENTURE:MUM) visit our website at

We seek safe harbour.

This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (together, "forward-looking statements"). Such forward-looking statements may include the Company's plans for its mineral projects in Manitoba, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risk, uncertainty of production and capital costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of nickel and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Management Discussion and Analysis for the most recent financial period and Material Change Reports filed with the Canadian Securities Administrators and available at

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