Desert Sun Mining Corp.
TSX : DSM
AMEX : DEZ

Desert Sun Mining Corp.

July 14, 2005 05:00 ET

Desert Sun Declares Commerical Production at the Jacobina Mine

TORONTO, ONTARIO--(CCNMatthews - July 14, 2005) -

Update included on Jacobina Mine production and Morro do Vento development project

DESERT SUN MINING CORP. (TSX:DSM)(AMEX:DEZ) has declared commercial production effective July 1, 2005 at the Jacobina Mine in Bahia, Brazil. Mining, milling and gold recovery levels have exceeded production thresholds generally accepted by the mining industry as defining "commercial" production. Desert Sun will report sales and operating costs for the Jacobina Mine using this as a start date.

The Jacobina Mine produced a total of 11,935 ounces from the first gold pour at the end of March 2005 to June 30, 2005. Of this total, 9,889 ounces have been sold at an average net sale price of US$427 per ounce. Revenue of US$4.2 million will be set off against development costs, with total development costs to reactivate the Jacobina Mine capitalized to June 30, 2005 expected to be approximately US$36 million. As at June 30, 2005 Desert Sun had cash and short term investments with a market value of US$13 million.

During the second quarter of 2005, the mill processed 210,400 tonnes with an average grade of 2.16g Au/t resulting in the production of 11,873 ounces of gold. For the month of June, the mill processed 80,600 tonnes with an average grade of 2.30g Au/t and produced 5,805 ounces of gold. The metallurgical recovery rate for June was 95.2%.

"We are very pleased to announce commercial production effective July 1, 2005 and attain another significant milestone for the Jacobina Mine," commented Bruce Humphrey, P.Eng., President and CEO of Desert Sun Mining. "During the month of June, we produced over 5,800 ounces of gold, representing approximately 70% of our production capacity and believe we are on track to average 80% of our production capacity in the third quarter of 2005. We are confident that we can achieve our target production rate of 100,000 ounces per year throughout the fourth quarter of this year."

Morro do Vento Development Project

The pre-feasibility study for Morro do Vento, located 0.5 km from the processing plant, is nearing completion. Micon International Limited of Toronto has completed the geological review; AMEC Americas Limited of Vancouver has completed their report on the mill expansion and Devpro Mining Inc. of Sudbury, in conjunction with Desert Sun Mining staff, has completed the mine plan and mineral reserve estimate. The final pre-feasibility report is being compiled by Devpro and is expected to be finalized by the end of July.

All environmental reports that are required to initiate work at Morro do Vento have been submitted to the Brazilian environmental review agency, Centro de Recursos Ambientais (CRA).

Desert Sun has completed work on the underground access collar and is currently constructing a power line directly to the Morro do Vento site. Negotiations with equipment suppliers are near completion and Desert Sun expects that equipment orders will be placed shortly.

Mr. Tagliamonte, P.Eng is the Qualified Person, as defined by National Instrument 43-101, for all mining engineering work at the Jacobina Mine.

Desert Sun Mining is a Canadian gold mining company listed on the Toronto Stock Exchange and the American Stock Exchange with 100% ownership of the Jacobina Mine and the 155 km long Bahia Gold Belt in the state of Bahia, in northeastern Brazil. Proven and Probable mineral reserves are 14,378,000 tonnes at 2.12 g Au/t containing 980,000 ounces of gold. As a result of Desert Sun's exploration programs to date, Measured and Indicated resources total 24,800,000 tonnes at 2.53 g Au/t containing 2,050,000 ounces of gold, and Inferred Resources total 22,200,000 tonnes at 2.61 g Au/t containing 1,900,000 ounces of gold. The mineral reserves are included within the Measured and Indicated mineral resources. For additional information, please see Desert Sun's website at www.desertsunmining.com, or contact Naomi Nemeth, Vice President, Investor Relations at 416-861-0341/1-866-477-0077.

Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements". This news release also uses the terms "measured resources", 'indicated resources' and 'inferred resources'. Desert Sun Mining Corp. advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

Contact Information

  • Desert Sun Mining Corp.
    Naomi Nemeth
    Vice President of Investor Relations
    (416) 861-5901 or 1 (866) 477-0077
    (416) 861-8165 (FAX)
    www.desertsunmining.com