Alexis Minerals Corporation
TSX : AMC

Alexis Minerals Corporation

August 14, 2009 08:30 ET

Alexis Minerals Announces Second Quarter 2009 Results

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) - ALEXIS MINERALS CORPORATION (TSX:AMC) has reported its second quarter 2009 Financial Statements and Management's Discussion and Analysis for the three month period ended June 30, 2009 on SEDAR (www.sedar.com). These documents can also be reviewed in full on the Company's website at www.alexisminerals.com.

The Company maintained its gold production at its Lac Herbin mine on schedule. It continued to expand its resource base in support of extending the life of mine plan for Lac Herbin. The Company is successfully continuing with its other key strategic priorities, being growth in production and exploring for significant gold and base metal deposits.

(Note: All figures are reported in Canadian dollars, unless otherwise noted).

Q2 2009 Highlights:

- The Company reported revenue of CAD $6,536,445.

- Lac Herbin, in Val d'Or, Quebec, continued operating at full production on schedule to meet production objectives of 36,000 - 40,000 oz. of gold in 2009.

- Sold 6,375 ounces of gold at a realized average price of CAD $1,075/oz. (USD $935/oz.).

- Mined 8,372 ounces of gold in the second quarter. A total of approximately 1,700 ounces remained to be sold subsequent to the custom milling campaign that occurred during the quarter.

- Confirmed the strong potential for increasing resources and extending the mine life of Lac Herbin.

- Confirmed potential for further new mine discoveries on the wholly owned Aurbel property.

- Completed a pre-feasibility study for the Lac Pelletier gold project which projects profitability and potential for commercial production in mid-2010.

- Had an independent evaluation completed of reserves at Lac Herbin resulting in a 156% increase over the last independent assessment in 2007. Total Proven and Probable Reserves have been evaluated at 617,374 tonnes @ 7.36 g/t of gold (Au) for a total of 146,007 oz. Au.

- Completed 16,779 metres of drilling, all in the Val d'Or area.

- Closed a financing for aggregate gross proceeds of CAD $10,000,000.

The Company's growth strategy is expected to enable Alexis to increase gold production. We maintain projected Lac Herbin production at 36,000 - 40,000 ounces of gold in 2009. This is due to achieving budgeted production rates in the first two quarters and confidence in improving grades in the later quarters as the mining focuses on higher graded ore.

At Lac Herbin, an average of 468 tonnes per day were mined in the second quarter. Total ore mined during Q2-2009 was 42,600 tonnes grading 6.1 g Au/t. Underground drilling continues to focus on replacing and increasing reserves at the mine. A second milling campaign was completed during Q2-2009 which produced 7,600 ounces of gold to be sold. The Q2-2009 cost of sales per ounce sold was CAD $598 per ounce (see Non GAAP Measures), reduced from CAD $676 in Q1-2009. The former is a slightly higher cost, relative to budget, as a result of production in the first two quarters being less than the projected average of 10,000 oz/qtr. The first stopes being mined are at the margins of the orebody and therefore lower grade. The subsequent stopes to be mined will be in the heart of the orebody and therefore are expected to be higher grade. The operating cost for the second quarter was reduced to CDN $147/t (from $156/t in first quarter), being essentially on budget. Operating costs are expected to be lower in the latter part of the year because operating development is expected to be reduced, milling costs are expected to decline as per our custom milling contract structure, and benefits of the improved maintenance program are realized.

A pre-feasibility study was initiated in 2008 to assess the potential of the Lac Pelletier project and in order to review the proposed mining approach. With recent and forecasted gold prices being sufficient to make this project economic, management has elected to proceed with refurbishment of the underground workings and completion of a 40,000 tonne bulk sample in 2009, with an anticipated recovery of approximately 9,400 oz. Au, after which a production decision will be made in Q1-2010. Given a positive production decision the deposit is expected to reach commercial production by mid 2010. Lac Pelletier is projected to produce between 35,000 and 45,000 ounces of gold per year. Adding this output to projected production at the Lac Herbin mine, the Company anticipates total annual gold production to increase to between 75,000 - 85,000 oz.Au per year commencing in 2010.

Alexis engaged an engineering contractor in Q2-2009 to outline the requirements to refurbish the Aurbel Mill in order to commission it into operation by the end of 2009. Alexis intends to reactivate the 1,400 tonnes per day capacity mill to accommodate the Lac Herbin ore. This development will reduce operating costs by approximately $12.00 per tonne, or approximately 10% of the cash cost of the mine. The application for a certificate of authorization for the Aurbel Mill has been submitted. Subsequent to this application a revised Mill and Tailings Closure Plan will be submitted.

The Company sold 6,375 ounces of gold and generated $6.54 million in revenue from mining operations during the quarter under review. Mine operating expenses were $3.81 million and the Company recorded amortization and depletion of operating costs of $2.5 million. The Company adjusted the basis for amortizing the deferred costs related to the Lac Herbin mine during the quarter, amortizing over the current net reserves at Lac Herbin of approximately 147,007 ounces. This resulted in higher amortization for the quarter. The gross profit was $0.22 million. Revenue from mining operations includes $6.85 million from gold sales reduced by $0.32 million in refining and royalty charges. The Company is subject to an NSR of 4.5% on Lac Herbin gold sales.

Alexis recorded a net loss for the quarter ended June 30, 2009 of $0.60 million compared to a net loss of $0.37 million for the quarter ended June 30, 2008. The Company incurred general and administrative expenses of $1.13 million during the quarter (Q2-2008: $0.81 million). As well, the Company recorded a future income tax recovery of $0.32 million for the three months ended June 30, 2009 (Q2-2008: a recovery of $0.44 million). Alexis averaged a sale price of $1,075 per ounce during Q2-2009.



Q2 2009 Financial Results Three Months Six Months
ended 30-Jun-09 ended 30-Jun-09

Tonnes of ore mined 42,600 76,596

Grade per tonne 6.11 g/t 6.56 g/t

Total gold ounces mined 8,372 16,155

Average recovery rate 97.95% 97.74%

Gold ounces sold 6,375 12,750

Average realized gold price (per oz CAD) $1,075 $1,102

Revenue from mining operations
(net of Royalties and refining charges
CAD 000's) $6,536 $13,356

Mine operating expenses
(excludes depletion and amortization -
CAD 000's) $3,813 $8,121

Amortization and depletion (CAD 000's) $2,503 $3,914

Gross profit (CAD 000's) $220 $1,321

Net earnings (loss) (CAD 000's) ($597) ($495)

Basic and diluted earnings (loss) per
share (CAD) ($0.00) ($0.00)

Cash flow from operating activities
(CAD 000's) $1,151 $4,435

Cash cost of sales per ounces sold
(CAD)(i) $598 $637

(i) See Non-GAAP Measures


Non-GAAP Measures

The Company has included certain Non-GAAP performance measures, namely cash costs per gold ounce sold and working capital, throughout this document. In the gold mining industry, these are common performance measures but do not have any standardized meaning, and are Non-GAAP measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, we and certain investors use this information to evaluate the Company's performance and ability to generate cash, profits and meet financial commitments. These Non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The tables included in the Q2-2009 MD&A provide a reconciliation of cash costs per gold ounce sold for the three and six months ended June 30, 2009 and 2008, and a reconciliation of working capital to the financial statements for the six months ended June 30, 2009 and the year ended December 31, 2008.

Quality Control

The technical and scientific content of this press release has been reviewed by Keith Boyle, P.Eng., Chief Operating Officer, Alexis Minerals and Qualified Person as defined under NI 43-101 guidelines.

About Alexis Minerals

Alexis Minerals Corporation is a Canadian mining company listed on the Toronto Stock Exchange (symbol "AMC"). The Company owns one producing gold mine in Val d'Or and the right to earn a 100% interest in the Lac Pelletier gold property in Rouyn-Noranda. Alexis undertakes exploration in the mineral rich Val d'Or (100% ownership of 212 sq. km.) and Rouyn-Noranda Mining Camps (50% ownership of 785 sq.km and in joint venture with Xstrata Copper). There are currently two drills active underground at Lac Herbin and two surface drills active in surface exploration in Val d'Or. Further information about Alexis Minerals can be found at its website: www.alexisminerals.com

Forward looking information.

This document may contain or refer to forward looking information within the meaning of applicable securities laws, based on current expectations, including, but not limited to, mineralization projections, future exploration priorities, estimates and costs, projected capital and operating expenditures, future exploration plans and techniques, estimates regarding the timing and costs of exploration, mineral prices, 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. Estimates and assumptions underlying the mineralization projections are based upon extensive technical and scientific analysis conducted by the management of the Company, the results from drill programs and other exploration, the analysis of external consultants and information obtained by the Company from third parties. Readers should not place undue reliance on forward-looking information. Forward looking information is provided as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances.

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