March 17, 2009 17:48 ET

CORRECTION: AXMIN Improves the Passendro Gold Project


TORONTO, ONTARIO--(Marketwire - March 17, 2009) - A correction is being issued with respect to the release sent out this morning at 9:37AM ET. AXMIN retracts the press release issued this morning due to the incorrect use of the word Scoping Study. The corrected version of the release follows.

AXMIN Inc. (TSX VENTURE:AXM) is pleased to report on the positive results of a Study to review the April 2008 Bankable Feasibility Study ("BFS") at Passendro Gold Project in the Central African Republic ("CAR"), which considers a reduction in the initial size of the project in light of the current project finance and economic climate. By reducing the project throughput to an average of about 1.3 million tonnes per annum ("tpa") (average 100,000 oz per annum) the initial capital cost (excluding working capital of US$2.1 million) is reduced by some 35% to US$127 million, project payback remains at just over two years and the life of the project nearly doubles to 11.5 years. Meanwhile the total cash operating cost increases by approximately 14% to US$431/oz whilst Net Present Value ("NPV", 5% discount rate) and Internal Rate of Return ("IRR") at a US$750/oz gold price remain very attractive at US$135 million and 27% respectively. At US$900/oz the NPV and IRR increase to US$244 million and 41% respectively.

President and Chief Executive Officer Mario Caron comments "We considered it prudent to evaluate the Passendro Gold Project at a reduced scale given the inherent status of project finance in the current economic climate. We are very pleased to be able to demonstrate that the project remains robust at this scale still with a short payback period. There is also the added benefit of an overall attractive risk profile as mine life is increased and the construction period timeline reduced. Higher grade feed in the first four years allows for production levels averaging some 125,000 oz per annum with the option to subsequently expand the plant to handle lower grade ore and any additional resources that may be added through exploration across this very productive Gold Belt.

The Study has concluded that the re-configured project forms an attractive option to that described in the BFS and as such AXMIN will consider accordingly. Meanwhile we continue to progress discussions with the CAR Government regarding the Mining License application."

The Study was undertaken by independent engineering company SENET (Pty) Ltd of South Africa ("SENET"), and incorporating a section on mining completed by SRK Consulting (UK) Ltd. ("SRK") and as with the BFS utilises the mineral resource that was previously reported (press release March 27, 2008) in accordance with National Instrument 43-101 Standards for Disclosure for Mineral Projects.

The analysis has been undertaken to a +/- 25 to 30% level of accuracy using costs and exchange rates applicable to end of the fourth quarter 2008 and using a US$750/oz gold price. Heavy fuel oil ("HFO") and diesel was priced at the equivalent of US$80/bbl oil.

BFS & March 2009 Study Highlights April 2008 (BFS) March 2009 (Study)
Mine Throughput 3 mtpa 1.3 mtpa
Mine Life 5.9 years 11.5 years
Development & Construction 24 months approx.12 months
Strip Ratio 8.4:1 7.5:1
Average Annual Gold Production
(life of mine) 203,000 ounces 100,000 ounces
Base Case Economics (US$750/oz Au)
Total Capital Cost (excluding
working capital) US$196 million US$127 million
Cash Operating Costs
(including royalties) US$379/oz Au US$431/oz Au
IRR 29.4% 26.6%
NPV (after tax, 5% discount) US$164 million US$135 million
Payback Period 2.2 years 2.3 years
Note: All financial analysis is based on 100% ownership


Block models incorporating the measured and indicated resources totaling 23.2 million tonnes grading 2.4 g/t Au (1.79 million ounces) that were used in the BFS mineral resource were taken as the starting point for the mining review. SRK used Whittle 4X optimisation modelling at a US$750/oz gold price with generalised adaptations to simulate the conversion to a designed pit outline. A dilution of 5% was added to the mineralisation, combined with a mining recovery of 95%. The mineable reserve established for the Study is 15.6 million tonnes with a grade of 2.42 g/t Au (1.2 million oz) to give an 11.5 year mine life.

These revised volumes form the basis of the mine plan using the geotechnical data; pit slope angles, mine layout and waste dump areas as described in the BFS. Similarly working times and patterns, drill and blast variables, and working practices remain unchanged. The cut off grade used in the Study are variable dependent on ore type (oxide, transition or sulphide) and source area and range from 0.5-1.2 g/t Au, which is similar to those of the BFS.

Conventional open pit mining techniques using shovel-truck methods are proposed to provide plant feed at a rate of between 1.5 million (oxides) or 1.0 million (sulphides) tonnes per year, with a life of mine strip ratio of about 7.5:1. It is envisaged in this Study that the mining function will be carried by the mine operator although in practice there may be improved opportunities to utilise a mining contractor.

Processing & Infrastructure

The BFS metallurgical testwork classified the Passendro orebodies into soft, medium and hard ore, all of which is amenable to treatment through a gravity and leach-CIP (carbon in pulp) process plant, with anticipated average gold recovery of 94%.

The process route remains similar to that described in the BFS, albeit at a reduced scale. The reduced throughput allows for modifications to the crushing circuit with attendant significant reductions in civil engineering, and to the milling-gravity circuit where the SAG-Ball Mill combination has been reduced to a Crush-Ball configuration, with modifications to the gravity section to enhance recovery of free gold.

Infrastructure remains essentially unchanged compared to the BFS, other than a reduction in water storage and start-up scale of the tailings dam, as well as simplification of mine site buildings and decrease in installed power to around 7.5 MW.

Assuming a "soft start" approach which would include some pre-engineering, followed by early ordering of major equipment and site preparation, it is possible that the construction time for the re-configured project could be significantly reduced from the near 24 month term of the BFS to about 12 months.

Capital Costs

The total capital cost estimate for 11.5 year project life is US$127.2, which excludes both the working capital of US$2.1 million and sustaining capital of US$19.8 million, this relates to a reduction of 35% from the BFS capital cost of US$201.5 million (3.0 million tpa) 6 year mine life project.

Description April 2008 (BFS) March 2009 (Study)
(US$ Million) (US$ Million)
Mining capital cost 24.9 23.2
Pre-strip costs 11.3 3.9
Pit dewatering 4.2 1.9
Tailings 2.7 2.7
Process plant direct costs 58.9 43.8
Infrastructure costs 31.9 20.0
Owners' pre-production costs 7.4 3.1
Off-site infrastructure 4.1 3.3
Other 2.3 1.1
EPCM 29.8 12.5
Contingency 18.5 11.7
Sub-Total $196.0 127.2
Working capital $5.5 2.1
Total $201.5 129.3

Operating Cost

The life of mine total cash operating cost, to include royalty and refining charges is estimated to be about US$431/oz, with the potential for the first four years of production to have average costs of US$348/oz. This contrasts with the BFS figure for the larger project of a life of mine total cash operating cost of US$379/ounce. The Total Project Cost, including construction capital, life of mine operating costs and sustaining capital is US$561/ounce which compares well with that of the BFS cost of US$562/ounce.


The company intends to complete a National Instrument 43-101 mineral resource update at the Passendro Gold Project during the second quarter. This update will integrate the drilling completed subsequent to the mineral resource estimate that was used in the BFS, and includes some 16,500 metres of core, of which nearly 14,000 metres was completed along the 4.5 km long Main Zone structure. The results and interpretation from the drilling suggests that the indicated resources could increase and may importantly simplify subsequent pit designs.

An increase in Indicated Resource could lead to better economics, giving potential for an increase in mine life, or production, or profile and as such an addendum to the BFS incorporating the resource update and the reduced throughput scenario would be undertaken as soon as the Mining Licence is awarded.

Qualified Persons

This press release has been reviewed by in-house qualified persons, Dr. Jonathan Forster, Fellow of the Institute of Materials, Minerals and Mining in the United Kingdom and Richard Quarmby, Pr Eng, MBA, MSAIChE. Independent consultants include:

Sean Cremin, Bsc Mining Eng (Hons), MIMM, Principal Mining Engineer is a Qualified Person under the National Instrument 43-101, and is the SRK person responsible for the Passendro Gold Project mineral reserve calculation.

Neil Senior, (Joint Managing Director, SENET), Pr.Eng, MSc, Fellow Member of the Southern African Institute of Mining & Metallurgy, is the SENET person responsible for the Passendro Gold Project Study.


AXMIN is a Canadian exploration and development company with a strong focus on central and west Africa. AXMIN's goal is to move its Passendro Gold Project in the Central African Republic towards production. AXMIN is positioned to grow in value as it develops its project pipeline in parallel pursuing new opportunities to increase its asset base. For more information regarding AXMIN visit our website at

This press release includes certain "Forward-Looking Statements." All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of AXMIN, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from AXMIN's expectations are disclosed under the heading "Risk Factors" and elsewhere in AXMIN documents filed from time-to-time with the TSX Venture and other regulatory authorities. AXMIN disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • AXMIN Inc.
    Mario Caron
    President & CEO
    (416) 368-0993 ext 223
    AXMIN Inc.
    Judy Webster
    Manager Investor Relations
    (416) 368-0993 ext 221