Desert Sun Mining Corp.
TSX : DSM
AMEX : DEZ

Desert Sun Mining Corp.

May 26, 2005 05:00 ET

Desert Sun Updates Operational Progress At The Jacobina Mine And Exploration In The Bahia Gold Belt, Brazil

TORONTO, ONTARIO--(CCNMatthews - May 26, 2005) -

- First gold sale of 3,200 ounces at US$420 per ounce completed in mid-May 2005

DESERT SUN MINING CORP. (TSX:DSM)(AMEX:DEZ) and the Jacobina Mine continue to meet planned objectives with both the mine and the mill making steady progress toward reaching design capacity late in the third quarter of 2005. Initial gold production of 3,200 ounces from development ore was shipped from Jacobina and sold in mid-May at US$420 per ounce.

The plant continues to meet commissioning expectations. In April, the plant processed 60,000 tonnes at a grade of 2.04 g Au/ t and it is anticipated that the throughput will increase monthly until the full operating capacity of 4,200 tonnes per day is reached. The production schedule has been updated to include the implementation of a number of operational activities to mitigate the impact of the long hole drill delivery delay on 2005 production targets. Gold production for 2005 is projected to be between 55,000 and 58,000 ounces, a small reduction from the original target of 62,000 oz. established in the 2005 business plan.

Project costs estimated to the end of May 2005 are US$35 million. The original 2003 SNC Lavalin Feasibility Study projected costs to this point of US$34 million. The mining costs are on track. Lower development costs, as a result of greater efficiency, have been offset by later than expected revenue as a result of the delayed delivery of the long hole drills. At this point, all required equipment is on site with the exception of two remaining 35-tonne trucks scheduled for delivery in June, raising the fleet to its full complement of ten trucks. Pre-operational expenditure in June 2005 is expected to be offset by increasing levels of gold sales.

The new Morro do Vento underground project is moving forward with three independent consulting firms working on a pre-feasibility study. Desert Sun anticipates completion of the mining section of this study in the end of May 2005 and the milling section by the end of June of this year.

The project continues to maintain an excellent safety record and over 10,000 hours of safety training and 3,000 hours of operator training have been completed.

Exploration

Desert Sun has received results of further drilling and exploration work at the Morro do Vento Extension and Canavieiras Mine in the Jacobina Mine area and at Pindobacu in the northern portion of the Bahia Gold Belt in northeastern Brazil. Thus far in 2005, a total of 41diamond drill holes totaling 7,036 metres have been completed in the Jacobina mine area targets and nine diamond drill holes totaling 1573 metres at Pindobacu. New results from drilling for the Morro do Vento Extension, Canavieiras, and Pindobacu areas are shown in Tables 1, 2 and 3, respectively.

Morro do Vento Extension

The Morro do Vento Extension target is located immediately north of the processing plant at the Jacobina Mine area. Drilling is testing the down dip extension of mineral resources in the Basal Reef, which was previously mined at shallower levels, and the little-explored Main Reef, which is about 50 metres stratigraphically above the Basal Reef. As previously reported (see press release September 14, 2004) hole MCZ-83 intersected 4.94 g Au/t over a true width of 12.6m in the Main Reef in the Morro do Vento Extension. In 2005, nine holes totaling 3494 metres have been completed.

Holes MCZ-88 and MCZ-85 returned significant intersections in the Main Reef of 3.25 g Au/t over a true width of 17.8m and 3.71 g Au/t over 5.3m true width, respectively. The Basal Reef was intersected in only two of the five holes reported due to truncation and/or disruption by faulting. Two additional holes will be completed to test the southern extension of both reefs into the Morro do Vento area immediately to the south. Rehabilitation of the old access levels (690 and 630 levels) is well advanced and once complete will allow more efficient drilling from underground.

Canavieiras

Drilling at Canavieiras continues to focus on following up the potential high grade trend identified in Hole 79 which intersected 14.57 g Au/t (13.50 gAu/t cut) over a true width of 8.0m and 9.29 g Au/t (7.75 g Au/t cut) over a true width of 6.4m. The former Canavieiras Mine is located 3 km north of the processing plant and is situated in a 1.2 km long by 400 metre wide block bounded by faults. In 2005 to date, 18 holes totaling 2,694 metres have been completed to test reefs below the old workings and 14 holes totaling 529 metres have been completed to test extensions of previously mined reefs.

Hole CAN-72 drilled 35 metres north and 9 metres west of CAN-79 intersected 1.87 g Au/t over a true width of 23.6m including 2.40 g Au/t over a true width of 12.2m in the MU (Middle Unit) reef. The 80-metre long cross-cut to provide drill access from the southern end of the old workings is now completed and drilling has commenced to test the southern extension of reefs both above and below the old workings. A complete re-surveying of the old mine workings is also in progress.

Pindobacu

Results of four additional holes have been received for the Pindobacu area located 50 km north of the town of Jacobina. Thus far in 2005, nine diamond drill holes totaling 1,573 metres have been completed in the Pindobacu area with assay results received from all of these holes as shown in Table 3 and the previous press release of April 19, 2005. Hole EP-01, the first hole designed to test the new area of conglomerates previously announced (see press release April 19, 2005), is 429 metres deep, and has confirmed the presence of a thick package of interbedded quartzites and fuchsitic, oxidized and locally pyritic conglomerates. Assays for hole EP-01 are pending. In addition, Fugro-Lasa-Geomag has been contracted to complete additional induced polarization geophysical surveys in the Pindobacu and new conglomerate area. Detailed geological mapping and soil geochemical sampling continue to be carried out to better characterize the extensive mineralized system in the Pindobacu area.

At the Pindobacu target, holes PB-08 and PB-09 are on the same section as PB-01, which intersected 7.20 g Au/t over a true width of 2.0m. This section is approximately 120 metres north of PB-02 which intersected 5.46 g Au/t over a true width of 21.9m (see press release January 19, 2005). Hole PB-08, which is 47 metres above PB-01, returned 3.89 g Au/t over a true width of 9.0m includeing a higher grade portion of 7.13 g Au/t over a 4.8m true width. Hole PB-09, 53m below PB-01, intersected 4.08 g Au/t over a true width of 1.9m. Hole PB-10, collared midway between the two sections, did not intersect the high grade mineralization suggesting that the zones are probably plunging and, as a result, were not intersected in this hole.

"The altered and mineralized structure at Pindobacu is very extensive, however further work is needed to determine the geometry of the structural control on the gold mineralization," commented Dr. Bill Pearson, P.Geo., Vice President, Exploration. "Very shortly, we will begin an induced polarization geophysical survey to better trace the full extent of the mineralized zones. We have also retained a structural specialist to assist us. Drilling of the new area of conglomerates, which should be excellent host rocks for gold mineralization, is also in progress."

Assaying for the program was carried out by Lakefield Geosol, an ISO 9001, 2000 laboratory based in Brazil, using fire assay on 50 gram pulps. Check assaying is routinely carried out, by ALS Chemex in Vancouver, on 10% of sample pulps and 5% of sample rejects. Independent standard reference samples are also inserted at regular intervals into each batch of analyses. Security is maintained at the core logging and sampling facility. Dr. Bill Pearson, P.Geo. is the Qualified Person as defined under National Instrument 43-101 responsible for the scientific and technical work on the program.

Geological Society of Nevada Presentation on the Bahia Gold Belt

On Wednesday May 18, 2005, Dr. Bill Pearson presented a paper entitled "Geology and Gold Mineralization of the Jacobina Mine and Bahia Gold Belt, Bahia, Brazil" at the Geological Society of Nevada (GSN Symposium 2005 "Window to the World") in Reno, Nevada. This presentation features a comparison of the Jacobina deposits to the world class gold deposits in Tarkwa, Ghana and Witwatersrand, South Africa prepared by Dr. Paul Karpeta, a well-known expert on Precambrian quartz pebble conglomerate deposits in these three areas.

"There are strong similarities in the style of sedimentation and gold mineralization at Jacobina to those of the Tarkwa and Witwatersrand Belts", commented Dr. Karpeta. "The presence of extensive hydrothermal alteration is very encouraging and indicative of the possibility of more extensive gold mineralization elsewhere in the Belt in addition to the obvious potential for extending the known deposits in the Jacobina Mine area." Dr. Karpeta also noted that the amount of exploration done to date at Jacobina is still very limited in comparison to both Tarkwa and Witwatersrand and that exploration along much of the Bahia Gold Belt is just beginning.

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 http://www.desertsunmining.com.

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.




Table 1: Significant Drilling Results, Morro do Vento Extension
Depth Below
Hole True 630 Adit
No.(a) From (m) To (m) Gold Interval Width Reef Level(b)(m)
(g/t) (m) (m)

MCZ84 N 8755440 E334866 El 696
Dip
60 degrees/
az equals
270 Main
degrees 368.13 369.45 2.34 1.32 1.2 Reef 240
Main
Reef
398.50 402.10 2.26 3.60 3.3 (FW) 270
Basal Reef truncated by fault

MCZ85 N 8755380 E334870 El 687
Dip
-61 degrees/
az equals Main
271 Reef
degrees 414.85 420.98 3.71 6.13 5.3 (FW) 270
Basal
439.37 449.20 1.61 9.83 8.6 Reef 300
Basal
Incl. 439.37 442.22 3.18 2.85 2.5 Reef 300

MCZ86 N8755305 E334879 El 669
Dip -57
degrees/
az equals Main
271 Reef
degrees 426.04 428.80 1.25 2.76 2.6 (FW) 315
Basal
454.10 456.37 3.04 2.27 2.1 Reef 335

MCZ87 N8755305 E334879 El 669
Dip -67
degrees/
az equals
265
degrees Basal reef absent due to faulting

MCZ88 N8755260 E334873 El 661
Dip -53
degrees/
az equals Main
269 Reef
degrees 427.61 446.95 3.25 19.34 17.8 (FW) 310
Basal reef absent due to faulting

(a) all holes are NQ diamond drill core size
(b) depth calculated based on midpoint of intersection



Table 2: Significant Drilling Results, Canavieiras Mine

Exploration Drill Holes testing MU and LU reefs in southern part of
Canavieiras Mine
Depth Below
Hole True 570 Adit
No.(a) From (m) To (m) Gold Interval Width Reef Level(c)(m)
(g/t) (m) (m)


CAN72
(a) N8758148 E335052 El 596
Dip -67
degrees/
az equals
90
degrees 76.48 105.30 1.87 28.82 23.6 MU 60
Incl. 76.48 91.30 2.40 14.82 12.2 MU 50

CAN76
(a) N8758227 E335043 El 595
Dip -63
degrees/
az equals
92
degrees 93.92 97.78 2.31 3.86 3.1 MU 60

Definition Drill Holes testing Piritoso reef in northern end of
Canavieiras Mine

CAN68
(b) N8758586 E335041 El 548
Dip -41
degrees/
az equals
91
degrees 7.88 9.08 2.30 1.20 0.9 Liberino 15


CAN69
(b) N 8758361 E335111 El 548
Dip -62
degrees/
az equals
80
degrees Hole stopped due to stability issues. Target not reached.


(a) all holes are NQ diamond drill core size
(b) holes are LTK48 diamond drill core size
(c) depth calculated based on midpoint of intersection



Table 3: Significant Drilling Results, Pindobacu Area, Bahia
Gold Belt
Depth Below
Hole True 630 Adit
No.(a) From (m) To (m) Gold Interval Width Reef Level(b)(m)
(g/t) (m) (m)

Pindobacu

PB-06B N8811952 E348974 El 619
Dip 62
degrees/
az equals
270
degrees No significant values

PB-08 N8812050 E348928 El 611
Dip 50
degrees/
az equals
265
degrees 67.31 76.90 3.89 9.59 9.0 58
Incl. 67.31 72.37 7.13 5.06 4.8 56

PB-09 N8812051 E349034 El 577
Dip 50
degrees/
az equals
271
degrees 136.90 142.90 2.11 6.00 3.8 135
Incl. 139.90 142.90 4.08 3.00 1.9 136
154.90 156.23 0.66 1.33 0.9 149
210.9 211.83 2.61 0.93 0.6 197

PB-10 N8812001 E348952 El 613
Dip 51
degrees/
az equals
269
degree 110.68 113.94 0.65 3.26 3.1 100
112.80 113.94 1.13 1.14 1.1 100


(a) all holes are NQ diamond drill core size
(b) depth calculated based on midpoint of intersection


Contact Information

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