SOURCE: Avanti Mining Inc.

Avanti Mining Inc.

March 24, 2011 13:55 ET

Avanti Reports Results for the Year Ended December 31, 2010

VANCOUVER, BC--(Marketwire - March 24, 2011) - Avanti Mining Inc. (TSX-V: AVT) ("Avanti" or the "Company") reported a net loss of $4.9 million ($0.01 per share) for the year ended December 31, 2010 compared to a net loss of $6.2 million ($0.04 per share) for the comparable period in 2009. In addition the Company deferred $13.0 million (2009 - $5.7 million) relating to the development costs of the Kitsault property. The Company had a cash balance of $18.0 million on hand as at December 31, 2010.

HIGHLIGHTS:

  • Increased landholdings by 300% through purchase of mineral tenures contiguous to the Kitsault project.
  • Closed public offering for $17 million in February 2010 to fund 2010 activities.
  • Entered into a debt advisory and arrangement agreement with West LB to arrange the debt portion of the project financing necessary to construct the Kitsault Project.
  • Enhanced project development team by hiring Ken Collison, formerly COO of Thompson Creek Metals, and Bob Jacko, P. Eng, formerly with Teck-Cominco.
  • Prevailed in a court case against Kitsault Resorts Ltd regarding confirmation of Avanti's Statutory Right of Way through the town of Kitsault to Alice Arm, an inlet of the Pacific Ocean.
  • Signed a life-of-mine (LOM) tolling agreement with Molymet to process concentrate that will allow delivery of molybdenum oxide to Avanti customers that would meet London Metal Exchange specifications.
  • Entered into letter of intent (LOI) with a large Asian steel producer for selling up to 10% interest in the Kitsault project plus an off-take sales agreement for up to 20% of total Kitsault's production for the first four years of production.
  • Entered into strategic alliance with SeAH Holdings Corp (SeAH), the largest specialty steel maker in Korea that commenced with a private placement of $11 million that occurred on December 30, 2010, and entered a LOI for the sale of up to 30% interest in the Kitsault project. However, Avanti does not intend to sell more than a total of 30% of the Kitsault project to funds its development.
  • Closed a $4 million flow-through share issuance on Dec 30, 2010 to fund exploration drilling in 2011.
  • Final Feasibility completed by AMEC Americas shows increase of US$247 million in the after tax NPV(8%) to US$794 million, using CPM Group's price forecast ranging from US$13.75 to 18.25/lb over the mine life of 16 years. Total cash operating costs average US$5.47/lb molybdenum over LOM but lower in first five years due to higher grades. Strip ratio is 0.77 to1 and initial capital expenditure is estimated at US$795 million. LOM annual production averages 23.4 million lbs of molybdenum but averages above 29 million lbs during the first five years.
  • Initiated the environmental assessment process with the British Columbia Environmental Assessment office (BCEAO) and the Canadian Environmental Assessment Agency (CEAA) working in cooperation with the Nisga'a Lisims Government. The first public meeting on the draft Application Information Requirement (AIR) was held on March 15, 2011. When the public comment period ends on April 7th 2011 and the AIR is finalized and accepted, Avanti will be in a position to file the formal Environmental Assessment (EA) Application.

OUTLOOK AND PROPOSED ACTIVITIES FOR 2011

  • Avanti hopes to complete the financing needed to develop Kitsault by finalizing the strategic partnership agreements for the sale of up to 30% of the asset to obtain its share of equity financing and arranging the requisite loans through West LB.
  • Engage the EPCM contractor to complete basic and detailed engineering design as well as construction bid packages through to award and procurement of major equipment items.
  • Submit the Environmental Assessment Application and conclude the mandatory six month review and public comment period resulting in the granting of an Environmental Certificate.
  • Begin the "One Project - One Process" BC Permitting policy that allows for synchronous permit application while the Environmental Application is being reviewed. Hopefully, this will allow the approval of permits to commence construction in early 2012.
  • Complete a 15,000 meter exploration drilling program at Kitsault with a goal of converting approximately 34 million tonnes of Inferred Resource currently treated as waste in the mine plan into Probable reserves. This will lower the stripping ratio and the mining cost and may allow for an increased production rate to 50,000 tpd.
  • Complete the metallurgical test work and mineral processing design for recovery of by-product silver. Initial results obtained in the Feasibility metallurgical program suggest that recoveries between 35 and 50% of silver could reduce the US$5.47/lb Mo cash costs by $0.50 to $0.75/lb depending on the silver recovery, processing and transportation cost and silver price received.
  • Complete a conceptual study on increasing the mill processing rate from 40,000 tpd to 50,000 tpd and make the decision to increase the annual throughput based upon the planned exploration drilling program.
  • Complete a 5,000 meter exploration drilling program at the high-grade Sunshine zone of the Roundy Creek prospect with a goal of producing a NI 43-101 compliant resource statement by the end of 2011 on this very exciting prospect.
  • Complete an initial NI 43-101 compliant resource statement at the Bell Moly prospect from the 20% re-sampling of core completed in 2010.
  • Further enhance the operating and administration team of Avanti through the recruitment of key personal in anticipation of the 2012 construction program.

Avanti is focused on the development of the past producing Kitsault molybdenum mine located north of Prince Rupert in British Columbia. Kitsault has Proven and Probable reserves of 232.5 million tonnes grading 0.081% Mo and containing 415.8 million pounds of molybdenum as outlined in the Technical Report with an effective date of December 15, 2010 which is available on the Company's website as well as at www.sedar.com. Mr. Kenneth Collison, Senior Vice President of Project Development for the Company and a Qualified Person as defined in NI 43-101, has reviewed and approved the scientific or technical information in this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements: This news release contains certain forward-looking information concerning the business of Avanti Mining Inc. (the "Corporation"). All statements, other than statements of historical fact, included herein including, without limitation; statements about the recoverability of molybdenum at the Kitsault property and other matters related to the development of the Kitsault molybdenum mine, are forward-looking statements. These forward-looking statements are based on the opinions of management at the date the statements are made and are based on assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events to differ materially from those projected in forward-looking statements. Important factors that could cause actual results to differ materially from the Corporation's expectations include fluctuations in commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for cooperation of government agencies and native groups in the exploration and development of properties and the issuance of required permits; the need to obtain additional financing to develop properties and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals; and other risks and uncertainties disclosed in the Corporation's Annual Information Form for the year ended December 31, 2009, which are available at www. Sedar.com. The Corporation is under no obligation to update forward-looking statements if circumstances or management's opinions should change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact Information

  • For further information, please visit www.avantimining.com, or contact:
    Craig J. Nelsen
    Chief Executive Officer
    303-565-5491, extension 4471

    A.J. Ali
    Chief Financial Officer
    303-565-5491, extension 4472