Astur Gold Corporation

December 15, 2010 08:01 ET

Astur Gold Corporation: CEO's Year End 2010 Letter to Shareholders

OVIEDO, SPAIN--(Marketwire - Dec. 15, 2010) - Astur Gold Corporation (TSX VENTURE:AST)(FRANKFURT:CDC) ("Astur Gold" or the "Company") today issued an end of year shareholder letter advising of its progress on the Salave gold project in Spain. The report from CEO Cary Pinkowski follows in its complete form:

Dear Shareholder,

I am pleased to provide an end of year report for Astur Gold Corporation. Firstly, I'd like to express my gratitude to you, the shareholders, for your continued support of the company. The year 2010 was a transformational year, with Astur Gold acquiring full ownership of the Salave gold project in Spain. Salave is one of the highest grade and largest undeveloped gold deposits in Europe. Excellent progress is being achieved in the surrounding communities of Tapia de Casariego and in Asturias with our social license programs as we advance toward production. All of the necessary elements are in place for the company to experience an upward adjustment in our valuation for 2011. We are considered a value company at approximately $22 per ounce relative to our comparable peers at $139 per ounce.

Our achievements in 2010 started with our partnership with Lundin Mining, in which we acquired the Salave gold project and Lundin became our largest shareholder. It was a tremendous success to recruit the top Spanish mine builder Emilo Hormaeche as President. Emilio resides only 90 km from the deposit and calls the region home. His success building the Tasiast gold mine (Kinross/Redback Mining) and Aguablanca enabled him to add key Spanish mine builders to our engineering and technical teams. Our NI 43-101 resource estimate was updated in April confirming 17.9M tonnes at 2.9 g/t Au for 1,683,000oz in Measured & Indicated and 3.8M tonnes at 3.1 g/t Au for 338,000oz in Inferred. The summer began with Haywood Securities closing a $5M round of funding in June, and finished with Sean Roosen, CEO of Osisko, joining our board in August. Sean's work rallying community support for the Malartic project (now Canada's largest developing gold mine) has been an excellent model for us in our social licensing efforts. We have been deliberate in recruiting the highest caliber community leaders in Asturias. Our PR team has done an exceptional job securing regular coverage in regional and national media. While most media entities have maintained neutrality regarding our progress, we can share encouraging news regarding the opinion of the community. I address the issue further in this letter in the section regarding permitting status. We anticipate the announcement of the completion of our scoping study on Salave with Golder Associates in the coming weeks. 

Some comments on our outlook of the headlines:


The Spanish economy has dominated headlines around the world in recent months. The country has earned its fair portion of the European sovereign debt contagion plaguing Europe. The Spanish government is working feverishly to assure current and potential Spanish debt holders that the government's austerity measures will help turn the country around. Astur Gold's progress is largely unaffected by this issue, and as a result we are working hard to contribute to the solution. Our Salave project is anticipated to directly create 250 jobs, as well as indirectly contribute to creating an additional 250 jobs in an economy suffering over 20% unemployment. We expect to invest over €120 million into the Salave project once we receive the required approvals. 


Our core focus has been on community relations. We are making excellent progress earning a social license for the project and garnering public support. We have done numerous one-on-one and large group meetings of over 50 people in the town and villages. We are very pleased with the results of the first of three independent surveys done in the local community. An independent research firm surveyed 10% of the population in the area and found that the majority of people are in favour of the mine. In the village of Tapia de Casariego directly, support for the mine is over 66% with an additional 5% accepting that it will open. One statistic of note revealed through these surveys is that 92% of the population is worried about youth emigration due to a lack of employment opportunities (youth unemployment is over 35%). As a testament to the demand for employment opportunities in Tapia de Casariego, we have received over 1,000 CVs to date in a town of only 3,900 people. As a result, we are encouraging each applicant to contact the mayor, mining minister and member of regional government to express their support for the project in order to generate additional jobs and stimulate the local economy.

Our team in Tapia is comprised of senior community leaders who are working directly with project stakeholders who will be impacted by our project, both positively and negatively. Our first newsletter was mailed out to over 4,000 residences in the region in September. Our December issue was sent out this week, with many more editions planned to follow-up on project advancements at Salave. The response to date has been positive as we have been successful in alleviating most concerns of local residents. Astur has created a social fund to spend on community programs or public works, to be released as certain milestones are achieved. The social fund is directed by the people of Tapia, for the people of Tapia without government influence on how the money is allocated. More details will follow in the New Year. Our mine engineering office is based locally in Oviedo and our head office has now moved to Tapia de Casariego.


Our mining and engineering teams have methodically reviewed all of the available options, and concluded that a combined mining method is most suitable for Salave due to a number of environmental, economic and social factors. The smaller open pit would be 350m wide, versus the 650m width of the proposed pit in the 2004 application. Our team feels that with the hardness of the granodirite rock we could still go down 150m in depth. This approach optimizes the percentage of extractable ore, while maintaining sensitivity to those concerned about a pure open pit option. We will be applying for a 2.7km long underground drift in 2011 for exploration purposes that can easily be expanded into an operational mining drift with conveyor belts. Full and final feasibility will commence early in 2011. Grades discovered in the most recent drill hole of 34 g/t Au over 40m certainly support an underground operation. The deposit remains open at depth and to the North West. Our team is already installing weather stations for the environmental impact study.


We remain optimistic on our outlook for Gold, and are in full agreement with the almost unanimous bullish sentiments of metals analysts. Gold is now breaking out in Euro terms, which will positively impact our economics in the future. The gold price will remain strong in the coming years while the sovereign debt crisis spreads from country to country. Countries must first run surpluses before they can even think of paying down their debt.

Upcoming Milestones 2011

Moving Forward

Our engineers are working hard to reduce the time to production once permits are granted. It is anticipated to take 18-24 months to develop Salave, however, we are aiming to reduce this timeline upon final approval. 

We will continue to work closely with the Government of Asturias and the people of Tapia to expeditiously move Salave into production for the benefit of all stakeholders and shareholders. We are very confident and excited to be working in Spain. In this climate where governments all over the world continue to devalue their currencies and seek bailouts, the outlook is very bright for the gold mining industry. 

We intend to grow our asset base and are evaluating gold prospects in Western Europe and West Africa. We look forward to putting Salave into production as soon as possible, and will continue to return exceptional value to our shareholders.

Please stay in touch with us by visiting, emailing us at or calling us at +1-604-694-1600. We encourage shareholders and stakeholders to visit us in Tapia de Casariego, Spain.

Yours sincerely,

Cary Pinkowski


Astur Gold Corporation

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