Central Sun Mining Inc.
TSX : CSM
TSX : CSM.WT
AMEX : SMC

Central Sun Mining Inc.

October 20, 2008 12:44 ET

Central Sun Corporate Strategy Update

TORONTO, ONTARIO--(Marketwire - Oct. 20, 2008) - Central Sun Mining Inc. ("Central Sun" or the "Company") (TSX:CSM)(TSX:CSM.WT)(NYSE-A:SMC) is pleased to provide the following update with respect to the corporate strategy and vision for the Company.

Central Sun is a producing gold mining company which currently operates the cash flow positive Limon Mine in Nicaragua. The Company also owns the Orosi Mine which is in the final stages of construction which was expected to be completed and operating at the end of the first quarter of 2009. To date the Company has spent approximately US$31million of the required US$47 million to complete the project.

Central Sun had previously entered into a non-binding term sheet with an international bank with respect to a US$22.5 million debt financing to complete the Orosi Mine Expansion Project. Due to the current global financial situation, the banking institution was unable to proceed with the debt financing.

In order to react expeditiously to this unexpected situation, the Company will be implementing the following strategy:

- The company is continuing active discussions with various other financial institutions with respect to debt financing for the project including ongoing discussions with our current bridge loan lenders.

- The Orosi Mine Expansion Project will be temporarily suspended in order to facilitate a quick reactivation once the required funding is secured.

- The Company will continue to operate the cash flow positive Limon Mine in an efficient manner.

- The Company will implement various cost cutting reductions throughout its activities, where necessary.

Peter Tagliamonte, President and CEO commented, "Central Sun has unfortunately been negatively impacted by the current financial situation. We are fortunate to have a cash flow positive Limon mine that will support the company's normal activities as we temporarily cease capital expenditures on the Orosi Mine project. We continue to work diligently to secure the required funding to restart and complete the Orosi Mine Expansion Project. We are confident that we will be successful, as the Orosi Mine Project is very advanced with approximately 6 to 7 months remaining to bring the mine back into operation at a production rate of 80,000 ounces per year. Central Sun has had excellent exploration success this year at both the Limon and Orosi mines and we will be providing a year end exploration update in the upcoming weeks. The necessity to suspend the Orosi Project is a disappointing decision that had to be made but we have a strong and dedicated team that will manage Central Sun through this challenging period."

About Central Sun Mining Inc.

The Company is a growing gold producer with mining and exploration activities focused in Nicaragua. The Company operates the Limon Mine in Nicaragua and is converting the Orosi Mine in Nicaragua to conventional milling to increase the annual gold output. It also holds an option to acquire a 100% interest in the Mestiza gold property which is located 70 kilometres by road east of the Limon Mine. The Company is focused on efficient and productive mining practices to establish high quality and cost effective operations. Central Sun Mining Inc. is committed to growth by optimizing current operations, expanding mineral reserves and resources at existing mines, exploring its extensive land holdings and seeking strategic mergers or acquisitions in the Americas.

Cautionary Note Regarding Forward-Looking Statements: This news release contains certain "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995, and "forward-looking information" under similar Canadian legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking statements and risk factors include, but are not limited to, statements with respect to the implementation of the Company's strategic plan; the future financial or operating performance of the Company, its subsidiaries and its projects; the future price of gold; expectation that the Orosi Mill feasibility study will be positive; capital requirements for completion of the Orosi Mill project; successful implementation of the Orosi Mill project; the estimated Orosi Mill recovery rates; the estimation of mineral reserves and resources, the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; operating and exploration expenditures; mining or processing issues; costs and timing of the development of new deposits; costs, timing and success of future exploration; government regulation of mining operations; permitting time lines and permitting; labour disruptions; environmental risks; unanticipated reclamation expenses; title disputes or claims; limitations on insurance coverage; and the timing and possible outcome of pending litigation and regulatory matters. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "anticipates" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements are based on the opinions and estimates of the Company as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, insurrection or war; delays in obtaining governmental approvals or required financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "General Development of the Business - Risks of the Business" in the Company's annual information form for the year ended December 31, 2007 on file with the securities regulatory authorities in Canada and the Company's Form 40-F on file with the Securities and Exchange Commission in Washington, D.C.. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

Contact Information

  • Central Sun Mining Inc.
    Peter W. Tagliamonte
    President and CEO
    (416) 860-0919
    or
    Central Sun Mining Inc.
    Denis C. Arsenault
    CFO
    (416) 860-0919
    (416) 367-0182 (FAX)
    Email: ir@centralsun.ca