Arehada Mining Limited

Arehada Mining Limited

November 14, 2007 14:48 ET

Arehada Mining Limited Announces Third Quarter 2007 Results

TORONTO, ONTARIO--(Marketwire - Nov. 14, 2007) - Arehada Mining Limited (TSX:AHD) (the "Company") today announced financial results and operational highlights for the third quarter and nine months ending September 30, 2007.

Total revenue for the first nine months was $13,442,086 from the mining of 326,396 tonnes of ore resulting in earnings after tax of $3,896,822 or $0.024 per share including a non cash charge of $1,471,900 for stock based compensation in the second quarter. Excluding those charges the earnings would have been $5,368,700 or $0.033 per share.

Cash flow for the first nine months was $6,706,147 or $0.04 per share.

In the nine months of 2007, Arehada has been conducting mining operations at 1,484 tonnes per day and operated 220 days during the period which is slightly below expectations for the period based on a projected 300 day per annum operation.

In the third quarter, head grades of approximately 1.31% zinc and 1.04% lead resulted in an average combined recovery rate of 84%. Silver head grades of 40 grammes per tonne met a 71% recovery factor into the lead concentrate.

These grades show continued improvement but are still substantially below the overall head grades for the resource cited in the RPA report.

These partially reflect the mining of above normal amounts of waste rock and lower grade material at the commencement of mining operations but during the quarter a number of changes were made to the mining plan including the introduction of a new general manager at the mine site.

Operating costs have increased to US$16.30 per tonne largely reflecting an anticipated increase in labour rates. It is expected that these costs will level out from here as the mining operations progress and remain below the RPA forecast.

For the past fifteen months subsequent to receipt of our 43-101 report we have been conducting an extensive development drilling programme utilizing six drills to outline further mineral resources. We have engaged RPA to update our 43-101 report by the end of 2007 and they have now completed their site visit.

The mineral resources are being developed with a view to support an expansion of our underground mining capacity to 3,000 tonnes per day with a concurrent doubling of capacity of our milling capacity.

The Company is financing this development drilling from internal cash flow and can fund a gradual expansion of our underground capacity in the same manner. However, our primary focus at present is to bring the current operations to a more productive level.

As previously reported, construction of the first phase of our 50,000 tonnes per annum plant to produce zinc oxide and sulphuric acid from concentrate has now been completed.

Barring adverse weather in the region, we expect it to commence operations by the end of 2007 at which time this plant, which is the only one in the region, will process ore from our Arehada mine and other zinc mines in the area.

We would like to thank shareholders for their patience during this time.

About Arehada Mining

Arehada Mining Limited is engaged in the exploration, development, extraction and production of zinc, lead and silver in Dongwuzhumuqinqi, located in Inner Mongolia, China. Arehada produces zinc and lead concentrates, which are then sold to smelters in China.

Arehada is currently constructing its own zinc plant with a designed processing capacity of 100,000 tons per annum. The recently completed first phase, with a rated capacity of 50,000 tons per annum, will produce zinc oxide and sulphuric acid.

Forward Looking Statements

The above contains forward looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, extent of resources actually contained in mineral deposits, actual recoveries achieved in processing ore, technological change, change to regulations affecting the mining industry, risks associated with mining operation in China, environmental and safety regulations risks, and risk associated with failure to obtain required regulatory or third party consent. Forward-looking statements in this release include statements regarding future programs, review completion dates and opportunities. Although we believe the expectations reflected in our forward looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements.

Contact Information

  • Arehada Mining Limited
    Christopher Harrop
    (416) 362-5466
    Arehada Mining Limited
    Graham Warren
    Chief Financial Officer
    (416) 362-5466