AXMIN Inc.
TSX VENTURE : AXM

AXMIN Inc.

March 12, 2009 12:29 ET

CORRECTION FROM SOURCE: AXMIN Announces Komahun Gold Project Scoping Study; New Gold Annomaly West and Parallel to Main Structure

TORONTO, ONTARIO--(Marketwire - March 12, 2009) - AXMIN Inc. (TSX VENTURE:AXM) -

A correction from source is being issued with respect to the release sent out this morning at 9:21AM ET. AXMIN retracts the press release issued this morning due to the incorrect use of the word reserve in lieu of the word resource. The corrected version of the release follows.

Toronto, Ontario - March 12, 2009 AXMIN Inc. (TSX VENTURE:AXM) is pleased to announce the results of a Preliminary Economic Assessment or Scoping Study (the "Scoping Study") for its Komahun Gold Project, Nimini Hills Joint Venture located in east-central Sierra Leone. The report has demonstrated that the Komahun Gold Project has potential for development as an underground gold mine with target production levels of about 50,000 ounces per annum. In addition, economics for the project could be substantially enhanced by future exploration success that is targeting the immediate vertical extensions to the orebody which remain open beyond the currently known depth of 350 metres beneath surface. Previous drilling highlight the exploration upside at depth as announced in press release on August 6, 2008 where intercepts include 24 metres grading 5.6 g/t Au (NWKD 161) and 7.2 metres grading 6.4 g/t Au (NWKD 162) at vertical depths between 250-350 metres.

President and Chief Executive Officer, Mario Caron comments, "Management is very encouraged by the positive Scoping Study results, which is a conservative baseline starting point to evaluate and improve the economics of the Komahun Project. The study indicates that at a gold price of US$750/oz, the project has a Net Present Value ("NPV") at a 5% discount rate of US$11 million and at US$900/oz gold the NPV figure increases substantially to US$48 million. This does not take into consideration the positive impact on NPV that resource increases will have on the project. The Scoping Study (+/-25 to 30% contingency) has provided guidance for planned exploration that justifies expansion of drill testing to depths of approximately 500 metres beneath surface with the objective of increasing resources by 100,000-200,000 ounces and in turn adding several years to the mine life."

The Study has been undertaken by SENET (PTY) Ltd ("SENET") of South Africa with the underground mining component provided by SRK Consulting (UK) Ltd ("SRK") and utilises both indicated and inferred mineral resources that were previously reported (press release September 18, 2008) in accordance with National Instrument 43-101 Standards for Disclosure for Mineral Projects. The inferred resources are moderately well constrained within the pre-existing drill fences which are spaced about 40 metres apart. The Scoping Study will be filed on SEDAR shortly.

Scoping Study Highlights

The Scoping Study used a base case of a 6 year, 350,000 tonne per annum ("tpa") throughput, with a gold price of US$750/oz, and utilising the existing indicated mineral resource of 110,000 oz (0.37 Mt grading 9.1 g/t Au) and an inferred mineral resource of 435,000 oz (3.10 Mt grading 4.7 g/t Au). The Scoping Study's main objective was to facilitate exploration planning, whilst project sensitivities were completed to provide guidance on the upside potential in the event of resource expansion from exploration below the current resource level. Further upside may also be obtained should a hydro electric scheme currently being considered at the national level be implemented to serve the region of Komahun.

The Scoping Study considered an industry standard process plant encompassing gravity and leach-CIP (carbon-in-pulp) circuits and generates on average 49,700 ounces per annum at a cash operating cost of US$459/oz. The base case capital cost has been estimated at US$69 million, which includes US$14 million for underground mining and US$5.3 million for life of mine sustaining capital. At a 5% discount rate, the net present value ("NPV") is US$11 million and the Internal Rate of Return ("IRR") 10%. At a gold price of US$900 /oz, the NPV increases to US$48 million and the IRR to 25%. An expansion of resources from exploration success could have a significant positive impact on the economic model.

Power is from stand alone Heavy Fuel Oil generators at an oil price of US$ 80/bbl. The underground mining cut off grade was taken at 3.5 g/t Au, assuming a US$750/oz gold price, a mineable tonnage of 1.77 million tonnes and head grade of 5.2 g/t Au. Metallurgical recovery was assumed to be 92% as determined by preliminary testwork (press release August 27, 2007), Recent metallurgical testwork conducted by SGS South Africa (Pty) Ltd on 28 samples (total 105 kg) collected from the various mineralised types at Komahun, including arsenopyrite bearing samples, confirms that a recovery of 92% or more in sulphides can be anticipated, and that the assumptions regarding ore hardness and reagent (in particular cyanide) consumption used in the Scoping Study may prove to be conservative. Gravity recovery of free gold is anticipated at around 25%.

The Main Zone orebody outcrops close to the summit of a steep ridge which lies about 120 metres above the surrounding valley, facilitating underground development. SRK recommends a shrinkage stoping method with decline access to provide the most cost effective solution to mining. The mining method provides good orebody recovery with minimised ore dilution and lower mine capital expenditure compared to alternative methods.

Geology and Mineral Resources

The Komahun project occurs within an Archaean Greenstone Belt in eastern Sierra Leone, within a sequence of steep to vertically dipping ultramafic and mafic units, with thin intercalations of banded ironstones. Although comprised of several centres of gold mineralisation within a 3 km radius within the Nimini Permit, it is only the Main Zone of the Komahun Project that has been incorporated into the Scoping Study. With time it is expected that additional zones of mineralisation may add further to the potential of the project.

In the Main Zone the mineralisation occurs within three sub-vertical structures with modelled widths ranging from 1.5 to 12 metres, but typically within the range of 2.5 to 7 metres and is open at depth. Gold is associated with quartz-sulphide veins and disseminated sulphides within a 50 metre wide, northeast-southwest trending shear zone located predominantly in amphibolites, banded ironstones and talc schists. Correlation of the sub-vertical lithologies is facilitated by the thin banded ironstone units that form well defined markers. Mineralisation is sub-parallel to lithology and consists of predominantly unweathered sulphide material.

The in situ mineral resource estimate at a plus 1.8 g/t Au cut off was undertaken by independent consultant, SRK and reported in a press release dated September 18, 2008. The cut off grade reflects modelling parameters suitable for underground mining. The estimates have been prepared under the guidelines of National Instrument 43-101 and accompanying documents 43-101.F1 and 43-101.CP.



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Category Tonnes Grade Contained Gold
(million) (g/t Au) (oz)
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Indicated Mineral Resource 0.37 9.1 110,000
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Inferred Mineral Resource 3.10 4.3 435,000
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Recent Exploration

Ongoing surface exploration completed in late 2008 on the northwest flank of the main Komahun structure has recently identified a new soil anomaly (greater than 100ppb Au), with a very similar northeast orientation, and located about 400 metres in the hanging wall of the Main Zone. Fragments of banded ironstone float have yielded visible gold.

Nimini Hills Joint Venture

The Komahun Gold Project lies within the Nimini Hills licences which are held under a joint venture agreement with AFCAN Barbados Limited, a subsidiary of Eldorado Gold Corporation (ELD-TSX; EGO-ASX). Under the terms of the joint venture, Eldorado has elected not to participate in ongoing exploration expenditures. As a consequence AXMIN may increase its level of ownership in the project from 60% to 80% by completing a bankable feasibility study.

Qualified Persons

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Scoping Study is a preliminary assessment that includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

This press release has been reviewed by an in-house qualified person, Dr. Jonathan Forster, Fellow of the Institute of Materials, Minerals and Mining in the United Kingdom and independent consultants include:

Mr. Martin Pittuck, MSc, C Eng, MIMMM, Principal Resource Geologist, with over 10 years experience of estimating gold project resources, he is a Qualified Person under National Instrument 43-101 and is the SRK person responsible for the Komahun Gold Project Mineral Resource estimation.

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 Komahun Gold Project Scoping Study.

Tim McGurk, (Principal Mining Engineer, SRK Consulting (UK) Ltd), Chartered Engineer and Member of the Institute of Materials, Minerals and Mining in the United Kingdom has 20 years experience in the mining industry.

About AXMIN

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 www.axmininc.com.

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
    or
    AXMIN Inc.
    Judy Webster
    Manager Investor Relations
    (416) 368-0993 ext 221
    Email: ir@axmininc.com
    Website: www.axmininc.com