Dia Bras Exploration Inc.

Dia Bras Exploration Inc.

August 14, 2007 08:30 ET

Dia Bras' Bolivar Pilot-Mining Program Produces Concentrate Value of US$4.8 Million in the Second Quarter

MONTREAL, QUEBEC--(Marketwire - Aug. 14, 2007) - Dia Bras Exploration Inc. (TSX VENTURE:DIB) reports second quarter net estimated smelter production value from its Bolivar pilot-mining program of US$4.8 million for a cumulative amount of US$10.3 million for the first six months of 2007 compared with US$6.8 million and a cumulative amount of US$12.1 million for the same period in 2006.

During the quarter, the Company processed 28,240 DMT of material averaging grades of 5.27% Zn and 1.13% Cu (cumulative production of 58,254 DMT for the first six months of 2007 at 6.04% Zn and 1.24% Cu). In 2006, the Company had processed 22,584 DMT at grades of 11.17% Zn and 2.19% Cu (cumulative production of 45,045 DMT at grades averaging 12.39% Zn and 2.34% Cu for the first six months of 2006).

Processing of Bolivar material was mostly done at the new Triunfo circuit, where a recovery rate of 87.77% for zinc and 78.17% for copper was achieved during the period (91.87% for zinc and 80.60% for copper in 2006 at the Malpaso circuit). Decreases in recovery rates are due to a combination of lower-grade material being processed and operation of the new Triunfo circuit which remains in fine-tuning mode.

Overall, 2,255 DMT of zinc concentrate and 875 DMT of copper concentrate were produced during the quarter (cumulative production of 5,242 DMT and 2,047 DMT of zinc and copper concentrates) compared with 4,016 DMT of zinc concentrate and 1,413 DMT of copper concentrate in 2006 (cumulative production of 8,784 DMT and 2,834 DMT of zinc and copper concentrates for the first six months of 2006).

During the quarter, direct operating cash costs amounted to US$3.6 million (US$2.4 million for the same period in 2006). The increase in costs is mainly attributable to increased tonnage of material transported from the Bolivar site and processed at the Company's Malpaso milling facilities, higher transport costs due to the inconsistent availability of railroad services, increased labour costs and costs related to the start-up of the new circuit at the Malpaso mill. The operating cash flow was used for the Company's development and exploration activities.

Development efforts to access the Selena and Titanic zones, part of the Fernandez trend, resulted in additional lower grade development material being sent to and processed at the Malpaso milling facilities. "We are now processing material from the Selena zone with a marked increase in mill feed grade" says Dr. Thomas Robyn, the Company's Executive Chairman.

Bolivar Pilot-Mining Program - Q2-2007

Cumulative 6 months
Q2-2007 Q2-2006 2007 2006
Tonnes processed 28,240 22,584 58,254 45,045
Grade zinc 5.27% 11.17% 6.04% 12.39%
Grade copper 1.13% 2.19% 1.24% 2.34%
Average price zinc per pound $1.65 $1.65 $1.61 $1.17
Average price copper per pound $3.45 $3.45 $3.07 $2.69

Tonnes zinc concentrate produced 2,255 4,016 5,242 8,784
Tonnes copper concentrate produced 875 1,413 2,047 2,834
Total tonnage of concentrate in
the period 3,130 5,429 7,289 11,618

(in US$ millions)(1)
Estimated Net smelter production
value - zinc $3.1 $4.5 $6.7 $ 8.1
Estimated Net smelter production
value - copper 1.7 2.5 3.3 4.0
Total net smelter production value 4.8 7.0 10.0 12.1

Operating cash costs 3.6 2.4 7.2 4.7
Direct operating cash margin $1.2 $4.6 $2.8 $7.4

(in US$)(1)
Production value/DMT $169.97 $212.54 $172,31 $268.62
Operating cash costs/DMT 127.48 106.27 123.91 104.34
Direct operating cash margin/DMT $42.49 $106.27 $48.40 $164.28

(1) Non-GAAP measures: The Company reports production value, production
costs, net smelter revenue per tonne, direct operating cash costs per
tonne and gross margin before amortization per tonne even if it is a
non-GAAP measure to inform about the approximate value of the quarter
sales, isolate the measure of pilot-mining direct operation costs
activities less amortization and depreciation. The Company believes
this is useful supplemental information however it should not be
considered as a substitute for measure of performance prepared in
accordance with GAAP.

The Company's total production of concentrate is sold to MRI Trading AG (MRI), a Swiss-based, privately owned commodity trading company, pursuant to a standard concentrate purchase agreement that was renegotiated in May 2007. Total billings to MRI during the quarter amounted to US$4.1 million and include some final settlements from 2006.

The pilot-mining program provides essential data on costs, logistics, grade, recovery and metallurgy that will serve for a feasibility study on the Bolivar property. The objective of the program is to generate sufficient cash flow from zinc and copper concentrate production to help finance development and exploration at the Bolivar mine and elsewhere on the Bolivar project.

It is important to note that Bolivar is not at a commercial production stage. The completion of a feasibility study is required to confirm the economic viability of a property before it is brought into commercial production. The Company expects to complete its exploration program on the Bolivar property and extensions in order to start a feasibility study in 2007.

The Company also reports that, due to exploration focus being placed on the Bolivar and Cusi properties and to the refractory metallurgy of mineralization, the Company has decided to abandon the Promontorio project, located in the region of Ocampo, in the State of Chihuahua, where limited work was performed during the past year.

About Dia Bras

Dia Bras is a Canadian exploration mining company focused on precious and base metals in the State of Chihuahua, in northern Mexico. The Company is committed to developing and adding value to its assets - the Bolivar copper-zinc project and the Cusi silver mining camp. The Company trades on the TSX Venture Exchange, under the symbol "DIB".

Forward-looking statements: Except for statements of historical fact, all statements in this news release, without limitation, regarding new projects, acquisitions, future plans and objectives are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.

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

Contact Information

  • Dia Bras Exploration
    Thomas L. Robyn
    Executive Chairman
    514-393-8875, ext. 241
    Dia Bras Exploration
    Rejean Gosselin
    President & CEO
    514-393-8875, ext. 241
    Sun International Communications
    Nicole Blanchard
    Managing Partner