Alexis Minerals Corporation
TSX : AMC

Alexis Minerals Corporation

February 20, 2008 08:30 ET

Alexis Announces Production Decision at Lac Herbin Deposit, Val d'Or, Quebec

- Revised feasibility study gives IRR of 238% - Production in 2008 estimated at 27,300 ounces Gold - Commercial production commencing in Q2-2008 - Annual production of over 40,000 ounces Gold per year - Significant upside potential for higher operating grades - Gold zones remain wide open for resource addition

TORONTO, ONTARIO--(Marketwire - Feb. 20, 2008) - Alexis Minerals Corporation (TSX:AMC) announces that the Board of Directors has approved a production decision for the Lac Herbin Gold Deposit in Val d'Or, Quebec. Their decision was based upon an update to the August 2007 Feasibility Study reflecting revised metal price forecasts, exchange rates, and long term mine planning and scheduling. The feasibility and long term mine models are supported by reconciled results from the Q4-2007 bulk sample and milling program (see Press Release: January 29, 2008) and a new Resource estimate for the deposit (see Press Release: January 30, 2008).

"Alexis management is thrilled to be able to bring our first new deposit into commercial production in 2008. Our work at Lac Herbin has demonstrated the economic viability and robust nature of this deposit. The long term exploration potential is excellent and we expect the deposit to be typical of the larger and longer term operations that characterize the Val d'Or Gold Camp." stated David Rigg, President and CEO of Alexis Minerals. "We are executing our strategy as expected, moving into the ranks of a producer with expected production this year of over 27,000 ounces gold from Lac Herbin and over 40,000 ounces per year thereafter. Mine production provides Alexis with long term cash flow and supports an aggressive approach to exploration and growth in the region."

Highlights of the Revised Feasibility Study are:

- NPV (7%) of $14.1 million with pre-production capital expenditures of $6.7 million and IRR of 238% compared to previous feasibility results of NPV (7%) of $4.5 million with capital expenditures of $6.5 million and IRR of 48%, Table 1

- 43-101 Proven and Probable Reserves increase 52% to 363,665 tonnes grading 7.33 g/t for 83,594 ounces recovered, Table 2, An additional, large Resource base with good exploration potential will support further increases in Reserves as development and exploration of the deposit advances.

- Production plan supports annualized production of over 40,000 ounces per year at a cash cost of $472/oz.Au (Foreign Exchange rate (Fx) of 1.0 USD/CAD)

- A revised Long Term Plan indicates NPV (7%) equals $25.9 million and IRR of 164% with pre-production capital expenditures of $7.1 million and sustaining capital expenditures totalling $13.4 million. Cash costs in this plan decrease to $460/oz.Au and total costs are low compared with other deposits in the region, at $596/oz.Au. The total costs of production benefit from low capital cost depreciation and minimal interest charges against the project.

- Gold price assumption per ounce of gold are $850 in 2008, $850 in 2009 and $750 long term, using a Canadian to US dollar exchange rate of 1.00

Gold metal price sensitivity has the largest single impact on project economics. Selected gold prices used in the study are slightly lower than an average of the ten Canadian Mining Analyst current price projections for the next 5 years. A price increase of $100 per ounce, from $850 to $950 per ounce gold, increases the NPV (7%) from $14.1 million to $47.0 million.

Revised Feasibility Study and Revised Long Term Plan

The study was supervised and undertaken by Mr. Patrick Sevigny, P.Eng. and Qualified Person under NI 43-101. The study is based on recently published measured and indicated resources of 894,552 tonnes at 6.98 gAu/t equating to 200,611 ounces (see Press Release: January 30, 2008). The primary mining method will be longhole mining which was successfully applied during the bulk sample program in Q4-2007. In the study, mining dilution applied to the zones averages 17% with total mining recovery of 86.7%, in keeping with results from the recent bulk sample and test-stoping program. Results from the study are shown in Table 1.



Table 1: Comparison of Results from the Revised Feasibility Study
and Revised Long Term Plan with 2007 Feasibility Study and
2007 4-year Model, Lac Herbin Project,
Alexis Minerals Corporation, Val d'Or , Quebec.

---------------------------------------------------------------------------
Revised 2008 2007 Revised 2008 2007
Feasibility Feasibility Long Term 4-year
Study Study Plan Model
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Tonnes 363,665 239,861 724,711 660,000
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Grade (g.Au/t) 7.33 7.30 7.21 7.43
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Recovery 97.5% 98% 97.5% 98%
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Ounces Produced 83,594 55,170 163,867 154,453
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Gold Price ($US/oz) 850/850/750 625 850/850/750 625
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Fx CAD/USD 1.0 1.1 1.0 1.1
---------------------------------------------------------------------------
Capital Costs ($M) 6.7 5.6 7.1 5.6
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Cash Cost ($US/oz) 472 389 460 394
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Net Cash Flow 17.1 9.3 33.6 21.1
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IRR 238% 48% 164% 78%
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NPV(7%) ($M) 14.1 4.5 25.9 15.6
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Production 3 years 18 months 5 years 4 years
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Reserves from the feasibility study with additional project Resources, not incorporated into the current study, are presented in Table 2. Remaining mineral resources represent the continuities of ore zones used for reserve calculations and mine planning. Mineral Resources remain open for expansion to depth, to the west and in some areas to the east of the deposit (see Press Release: January 30, 2008).

The bulk sample program during Q4-2007 included test stoping in two areas of the deposit and milling of this mined ore. The conclusions of the program identified a potentially significant increase (69% and 350%) in recovered ounces of gold at the mill as compared with estimates of Indicated Resources (see Press Release: January 29, 2008) for the same mined areas. The under-representation of contained ounces of gold in Indicated Resources using a 1.0 oz.Au/t (34.29 gAu/T) cut-off, was addressed by using a potential higher cut-off grade of 2.0 oz.Au/t (68.58 gAu/T). The Revised Feasibility study, along with the 2007 Feasibility Study and 2007 4-year Model, employ a cut off grade of 1.0 oz.Au/t (34.29 gAu/T) for all Resource estimates. The Revised 2008 Long Term Plan incorporates a nominal 24% increase in contained ounces within Indicated Resources used in the Plan. This increase incorporated in the Plan is considered very conservative. Long term operating experience of the deposit will confirm the use of a higher cut-off grade for Indicated Resources or higher increase in contained gold ounces that can be expected with Indicated Resource areas.



Table 2: Stated Reserves and remaining Resources at Lac Herbin Mine,
Val d'Or, Quebec.

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Mine Reserves(i) Tonnes Grade (g.Au/t) Contained Ounces
Gold
---------------------------------------------------------------------
Proven & Probable 363,665 7.33 85,738
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(i) NOTE: All high grade assays are cut to 1.0 oz.Au/t (34.29 gAu/T)


---------------------------------------------------------------------
Additional Mineral Tonnes Grade (g.Au/t) Contained Ounces
Resources(i) Gold
---------------------------------------------------------------------
Measured & Indicated 526,411 6.72 113,711
---------------------------------------------------------------------

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Inferred Resources 422,864 5.85 79,482
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(i) NOTE: All high grade assays are cut to 1.0 oz.Au/t (34.29 gAu/T)


43-101 Mineral Resource Statement: Mineral Resources that are not mineral reserves do not have demonstrated economic viability (NI 43-101/3.4(e)). The revised Long Term Plan and the 2007 4-year Model include a portion of mineralized material (Inferred Resources) in order to demonstrate the potential of the Lac Herbin deposit to support ongoing long-term production. This material is considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the Revised Long Term Plan or 4-year production model assessment will be realized (NI-43-101/2.3 (3bi)).

Current Mine Activity:

Alexis Minerals is currently advancing Lac Herbin towards commercial production. Alexis has developed an experienced exploration and mining team of over 86 hourly and staff employees. Mobile mining equipment to facilitate operations has been acquired. Mine development is currently focused on the main ventilation raise to surface which will be fully commissioned in April and provide mine ventilation and secondary mine access. Other development work is being accomplished while the raise is being constructed.

Four underground diamond drills are in operation focused on delineating inferred resource areas required for the Long Term Plan. A fifth diamond drill is scheduled to enter the mine in Q2-2008 with the commencement of exploration for strike extensions of the deposit and to commence the evaluation of the deeper, and open, ore potential beneath current Resources. 40,000 to 50,000 metres of underground drilling is planned during 2008.

All permitting is in place for current activity. A commercial production permit is in application and expected shortly.

Errata: Press Release January 29, 2008

The reconciled results from the Q4-2007 bulk sample and milling program (see Press Release: January 29, 2008) confirm an increase in the contained gold content in the areas of the S1 and HW zones selected for test-stoping during the Q4-2007 bulk sample program. In the mined areas, the contained gold recovered in the milling campaign increased by 69% and 350% respectively over and above the gold content that would be estimated by the Indicated Resource method.

About Alexis Minerals

Alexis Minerals Corporation is a Canadian exploration and development company listed on the Toronto Stock Exchange. Alexis holds an outstanding portfolio of properties covering the Val-d'Or and Rouyn-Noranda Mining Camps in Quebec. Alexis owns the 1400 tonne per day Aurbel gold mill and holds a 100%-interest in the Aurbel property. Alexis will vest into a 100% ownership of all remaining interests of Aur Resources on approximately 212 square kilometres of the Val-d'Or Mining Camp in early 2008. Alexis also has the right to earn-in into a 100% interest in the Lac Pelletier gold property in Rouyn-Noranda. The Company has earned a 50% interest in approximately 786 square kilometres of the Rouyn-Noranda Mining Camp and has entered into a joint venture with Xstrata Copper. Alexis is following strategic exploration approaches across these properties for both gold and base metals, with a focus on the potential for gold production from the 100%-owned Lac Herbin and Lac Pelletier deposits during 2008. Currently there are four underground drills active at Lac Herbin, one surface drill active in Val-d'Or and one surface drill active in Rouyn-Noranda.

Forward-looking information. This document may contain or refer to forward looking information based on current expectations, including, but not limited to, mineralization projections, estimates regarding the timing and costs of production, mineral prices, feasibility of projects, and future mining plans. Forward-looking statements are subject to significant risks and uncertainties, including those risks identified in the annual information form of the Company, which is available under the profile of the Company on SEDAR,,and other factors that could cause actual results to differ materially from expected results. These forward-looking statements are made as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances.

Contact Information

  • Alexis Minerals Corporation
    David Rigg
    President and CEO
    (416) 861-5889
    (416) 861-8165 (FAX)
    or
    Alexis Minerals Corporation
    Bruce Barch
    Manager Investor Relations
    (416) 861-5905
    or
    Alexis Minerals Corporation
    Louis Baribeau
    Relationiste, Quebec
    (514) 667-2304
    Email: info@alexisminerals.com
    Website: www.alexisminerals.com