True North Gems Inc.
TSX VENTURE : TGX
December 09, 2008 12:50 ET
True North Gems Prepares Greenland Ruby Project for Mine Permitting
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 9, 2008) - True North Gems (TSX VENTURE:TGX) is pleased to provide shareholders with an update of corporate developments and plans for advancing the Company's 100% owned Aappaluttoq (a-pa-loo-tock) Ruby Project toward commercial production. The results of our exploration over the past two seasons have confirmed our expectations that Aappaluttoq holds a source of high-quality rubies. We are now beginning the transition from an exploration to a development company, and are working with mining engineers in Canada and Denmark, with environmental engineers and with the Greenland government to confirm project economics and develop a comprehensive mine plan which will be submitted to obtain our exploitation permit.
During the past months we have faced challenging capital markets as the global economic crisis has had an amplified effect in the junior resource companies. Nevertheless, we remain confident that the Aappaluttoq Ruby Project possesses many characteristics that will allow for the successful development of a unique and historic mining operation. Primary among these is the high unit value of the ruby and pink sapphire mineralization, as demonstrated through bulk sampling over the past four years, which in turn can support an operation defined by a small environmental footprint, low capital costs and high operating margins and a short pay-back period. These characteristics, combined with a 100% ownership interest, provide the project with the ability to attract alternative forms of financing.
- 2008 exploration objectives met
- Mine permitting process initiated
- Application for first sales of Greenland ruby submitted to Greenland government
- Preliminary economic assessment in progress by Wardrop Engineering
- Rationalization of the company's operations and overhead in progress
The 2008 Exploration Program
The C$4.5M 2008 exploration program was successful in meeting the primary objectives required to position the project to enter the mine permitting process. Field work consisting of diamond drilling, bulk sampling and geological surveying was complete in late September. The results of the 2008 exploration program are currently being evaluated and will be released shortly.
Engineering and Permitting
We are committed to accelerating the advancement of the Aappaluttoq Ruby Project toward mine development. To that end, we have begun formal meetings and dialogue with the Greenland Home Rule Bureau of Mines and Petroleum (BMP) and other agencies responsible for managing the mine permit application process. As part of this process, the company is working with Wardrop Engineering to continue the development of the preliminary economic assessment and has recently engaged MT Hojgaard Engineering (MTH) to assist in the development of a preliminary mine plan for internal planning purposes. MTH is Denmark's leading engineering and construction contracting company and has successfully permitted, developed and operated the most recent open pit mine in Greenland. MTH's experience and network in Greenland will be an important asset for True North in the permitting and mining license application process.
An internal preliminary scoping study and conceptual mine plan has been completed and have served as the basis for discussion on key project requirements with the BMP and the National Environmental Research Institute (NERI) in recent meetings. The BMP and NERI confirmed that our environmental baseline work to date meets the standards required in order to begin an environmental impact and socio-economic assessment, which is the first step in obtaining a mining license.
With our successful exploration through 2008, we believe that the mining license application documents can be developed based on existing information.
The global economic crisis has created particularly challenging financial markets at a time when the True North treasury is depleted at the end of an intensive field season. In this environment it is even more critical that we approach capital markets with a view to obtaining the financing required to advance toward the company's key objectives in 2009 while balancing our objectives against shareholder dilution. To date, True North has been successful in financing in these challenging markets and maintaining the support of existing shareholders. As we continue to chart a course through these difficult markets, we will consider all the strategic alternatives to ensure the company is adequately financed for 2009.
In addition to accessing capital, the company has joined its peers in the responsible reduction of operating expenses by prioritizing programs, reducing overheads, cutting budgets and initiating measures aimed at capital preservation. To the company's benefit is that fact that field activities are complete for the year and the company is entering an annual period during which capital expenditures can be maintained at a minimum.
Gemstone Inventory and test sales
We believe that the value of the Aappaluttoq Ruby Project is optimized by processing the mined ruby ore into polished ruby gemstones. In an effort to demonstrate this value, we continue to conduct manufacturing and yield studies with the rubies and pink sapphires recovered from the Aappaluttoq bulk sampling.
As we progress with the processing the polished stone inventory continues to build. Currently we have on-hand finished gemstones resulting from approximately 50% of the concentrate material recovered from the 2006 30 tonne bulk sample. Polishing of the remainder of the 2006 material is nearing completion, and will be returned to our head office in Vancouver in due course.
The initial material polished from the 2006 bulk sample has formed the basis of an application for approval of the first sales of Greenland rubies as part of a program of test marketing that will provide confirmation of the project economics based on our value-added business plan. This sales application has been submitted to the BMP for review and will be considered for approval by the Greenland/Demark bi-lateral Joint Committee on Resources in the first six months of 2009.
Processing of the 2007 bulk sample was substantially completed in 2008 using two Canadian laboratories, Saskatchewan Research Council and SGS Lakefield, as well as our in house gemologists. Results are nearing completion, and will be reported shortly.
In advancing toward commercial production at Aappaluttoq we will continue to act responsibly and in the best interests of the company's shareholders. Accessing capital will continue to be a challenge and will require corporate agility to balance the company's financial requirements while maintaining a healthy capital structure. True North is fortunate to own 100% of the project and hence have options that will allow the company to pursue alternative, and potentially less dilutive forms of financing if appropriate.
Our primary focus in 2009 will be advancing the Aappaluttoq Project toward commercial production by diligently advancing studies that will expedite the mine permitting process. The permitting process can be completed on the basis of information already in place and at a modest cost relative to the value added to the project. On-site activities in 2009 will be dedicated to supporting the related engineering studies.
We will continue to assess and improve our capacity to process rough ruby ore into gemstones through our Bangkok office, with the 2009 objective of processing remaining inventories of clean rough gem material from the 2006 and 2007 bulk sample and prepare for the processing of the 2008 bulk sample.
True North's management and Board of Directors remain committed to building shareholder value through the advancement of the unique and robust ruby project. Our goal is to create a company that will not only mine for ruby ore, but create polished ruby gemstones to sell to the world market. More than ever, we are confident the Aappaluttoq Ruby Project has the potential to support a unique and historic mining operation that will benefit the Company, its shareholders and the people of Greenland.
The Company relies on litigation protection for "forward-looking" statements. Certain technical information contained within this press release is 43-101 non-compliant by virtue of the fact that National Instrument 43-101which governs public disclosure of technical information for mineral exploration properties in Canada is silent with respect to the exploration and technical disclosure of gemstone properties. The company employs high standards for the collection of geological information and exploration data, employs industry recognized professionals as qualified persons to provide oversight and management of the exploration programs and is committed to the implementation of QA/QC protocols to monitor the integrity of the technical information.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.