Cross Lake Minerals Ltd.
TSX : CRN

Cross Lake Minerals Ltd.

March 20, 2006 17:38 ET

Cross Lake Minerals Ltd.: Positive QR Mine Independent Feasibility Study Completed

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 20, 2006) - Cross Lake Minerals Ltd. (TSX:CRN) (the "Company" or "Cross Lake") is pleased to announce that it has completed the Independent Feasibility Study for restarting the QR Mine. The completion of the QR Mine Technical Report by Wardrop Engineering Inc. and Cross Lake's Engineering Consultants is an important step for the Company as it moves toward the recommencement of operations at the QR Mine. Initial capital required for the project is $4.5 million comprising $3.5 million for infrastructure and development as well as $1.0 million for working capital. The following table summarizes the Projected Cash Flow of the QR Mine in the first two years of operations:



Cash Flow Summary ($Can)
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In-Situ Gold (Oz): 78,323 78,323
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Recovery (%): 93.00 93.00
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Recoverable Gold (Oz): 72,840 72,840
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Au Price ($/oz): 550.00 600.00
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Net Revenue: 39,661,504 43,267,095
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Operating Costs $/t $ $
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Mining 36.94 17,223,565
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Processing 13.76 6,416,503
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Plant (Power) 3.77 1,758,010
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Admin/Tech Services 6.95 3,240,893
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Subtotal Operating: 61.42 28,638,971 28,638,971
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Operating Profit: 11,022,533 14,628,124
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Cash Cost ($/oz Au): 393.18 393.18
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Total Cost ($/oz Au): 462.44 462.44
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Operating Margin ($/oz Au): 156.82 206.82
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IRR (%): 109 204
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When the Company's engineering team reviewed the options for development of the existing resource on the QR Property several choices were considered and subjected to analysis. As a result of this process, it was concluded that the most efficient and therefore economic development plan was to develop only the easily accessible underground resource within the Midwest Zone, develop the defined Northwest Zone by open pit and the West Zone by a combination of open pit and underground mining. This plan generates a highly profitable economic model with a minimum of capital and an excellent cash flow over the first two years of mine operations. In addition to the resource included in the development plan, there is the potential for additional tonnage at depth below the Midwest Zone, further potential within the West Zone and the large undeveloped resource indicated within the North Zone.

The Company is negotiating the necessary financing to provide the capital cost for the Project. The Company is also finalizing the negotiations related to the construction of a power line into the Property to provide hydro power instead of the diesel generated power used during the previous operation. This will result in a significant reduction in operating costs from the previous operation and as a result an improvement in the economics of the operation.

The proposed restart and development of the QR Mine is an excellent project with a high rate of return on capital and a low cost of production per ounce of gold recovered. The project is also attractive because production can be achieved within three months of starting field work at a very modest capital cost. As the proposed operations were previously permitted for production the time to reactivate the operating permits is significantly less than a "new" project and the Company expects them to be completed by early summer. This can be done as the Company is preparing to start field operations.

Cross Lake is committed to the development and ongoing operations of the QR Project. The Qualified Person who reviewed the studies and manages the exploration work is the Company's Qualified Person and Vice President, Exploration Jim Miller-Tait, P.Geo. The Company will also continue to explore to outline additional resources on the QR Property and to advance its other Projects through ongoing exploration and development.

12(g) No. 82-2636


Contact Information

  • Cross Lake Minerals Ltd.
    Gordon A. Keevil
    President
    (604) 687-2038
    (604) 687-3141 (FAX)
    www.crosslakeminerals.com
    or
    Tangent Management Corp.
    Investor Relations
    (604) 642-0115