Intrepid Mines Limited
TSX : IAU
ASX : IAU

Intrepid Mines Limited

April 28, 2011 08:15 ET

Intrepid Mines Limited Releases Activities Report for the First Quarter

THREE MONTHS TO 31 MARCH 2011

TORONTO, ONTARIO--(Marketwire - April 28, 2011) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) (the "Company") is pleased to announce the release of its report for the quarter ended 31 March 2011 regarding mining production, development and exploration activities, as required under ASX listing Rule 5.1.1, as well as the Company's Management's Discussion and Analysis and Interim Financial Report for the quarter ended 31 March 2011.

The documents are available on the Company's website (www.intrepidmines.com), will be available shortly with Intrepid's filings on Sedar (www.sedar.com) and can be reviewed on the ASX website (www.asx.com.au).

All dollar values are United States Dollars unless otherwise stated.

OVERVIEW

Finance

  • Group loss after tax for the three months ended 31 March 2011 of $3 million (unaudited) - includes discontinued operations.

  • The sale of Paulsens to Northern Star, which completed in July 2010, was for a purchase consideration of up to A$40 million. The Group received the two top-up payments of A$2.5 million each during the quarter, bringing the total consideration up to the A$40 million maximum.

  • Interest income during the quarter was $1,547,000.

  • During the quarter 3,607,725 options to acquire shares in the Company were exercised.

  • Cash balance and term deposits at quarter end totalled $181.088 million.

Operations

  • At Tujuh Bukit the ongoing drilling results from the underlying porphyry copper-gold-molybdenum mineralisation are particularly encouraging and there is an emerging picture of a very large porphyry system with zones of particularly high grades and elevated gold-copper ratios.

Tujuh Bukit Oxide

  • On 2 February 2011, the Company announced that the technical report entitled "Tujuh Bukit Project Report on Mineral Resources" dated January 2011, has been filed on SEDAR (www.sedar.com) as well as with the ASX (www.asx.com) (see the Company's news release of 14 December 2010 for a summary of the oxide resource update). The report was prepared by independent consultants Hellman and Schofield Pty. Ltd. in accordance with the JORC Code and Canadian NI 43-101. It details an updated Inferred Resource estimate of 130 million tonnes at 0.55 g/t gold and 18 g/t silver above a 0.2 g/t gold cut-off, for 2.4 million ounces of contained gold and 80 million ounces of contained silver within the combined oxide zones of the Tumpangpitu area of the Tujuh Bukit Project in Indonesia.

  • On 20 April 2011, subsequent to the quarter end, the Company reported the results of a Preliminary Economic Assessment ("PEA"), independently prepared by Kappes Cassiday of Reno, Nevada, for a potential heap leach, open pit gold mine on the oxide resource of the Tumpangpitu area. Based on conservative assumptions, the PEA demonstrated a life of project annual average production of 143,000 recovered ounces of gold for 9 years at a cash cost of US$376 per ounce, net of silver credits at US$16.50 per ounce. The project delivers a post-tax cumulative cashflow of US$445 million, an NPV (at a 10% discount rate) of US$180 million and an IRR of 31%, at a gold price of US$1,050 per ounce. The Company's board has approved immediate progress towards commencement of a pre-feasibility study to be conducted in parallel with the advancement of the forestry approval process.

Tujuh Bukit Porphyry

  • On 31 January 2011, the Company announced that drilling results for the copper-gold porphyry had identified extensions to the known mineralisation.

  • On 3 March 2011, the Company reported that assay results received from five deep exploratory drill holes intercepted additional mineralisation adjacent to and south of the main Tumpangpitu porphyry Inferred Resource area. Together, diamond drill holes GTD 178, 181, 182, 183 and 184 confirm the clear potential for the expansion of the Tumpangpitu porphyry.

  • An updated porphyry resource estimate is due in May which will incorporate further deep drilling around the main Tumpangpitu copper-gold porphyry zone. The initial resource, published in September 2010, contained 500 million tonnes at 0.4% copper and 0.5g/t gold.

FORESTRY ACTIVITIES

The Indonesian Forestry Law restricts non forestry activities within protection forests and prohibits mining using an open pit method in protection forest areas. Accordingly, Intrepid's Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. While similar reviews have led to the granting of reclassifications, there is no assurance that the forestry reclassification will take place in this instance.

Qualified Person

The information in this report that relates to exploration results at Tujuh Bukit is based on information compiled by or under the supervision of Mr Norris, who is a member of The Australasian Institute of Mining and Metallurgy. Malcolm Norris is a full-time employee of Intrepid Mines Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Malcolm Norris consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to mineral resources at Tujuh Bukit is based on information compiled by or under the supervision of Dr Phillip Hellman, who is an independent consultant to Intrepid Mines Limited. Dr Hellman has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an Independent Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and an Independent Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Dr Hellman consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

The PEA was prepared by independent industry consultants, all qualified persons under Canadian National Instrument 43-101. The following consultants and qualified persons participated in the PEA:

  • Kappes Cassiday and Associate, under the direction of Daniel Kappes, PEng. Mr Kappes is the President of KCA. He supervised and reviewed the heap leach pad and solution ponds design, process design and infrastructure requirements, capital and operating cost estimate, and financial analysis of this project.
  • Australian Mine Design and Development Pty Ltd., under the direction of Peter Allen, MAusIMM. Mr. Allen is an open pit engineering and principal consultant at AMDAD Pty Ltd. He supervised and reviewed all the mining design aspects of this project.

An NI 43-101-compliant technical report will be filed on SEDAR within 45 days of the date of release of this announcement.

FORWARD-LOOKING STATEMENTS

This announcement contains certain forward-looking statements relating to, but not limited to, Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Statements relating to gold reserve and resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate. Information provided relating to projected costs, capital expenditure, production profiles and timelines are expressions of judgment only and no assurances can be given that actual costs, production profiles or timelines will not differ materially from the estimates contained in this announcement.

ABN: 11 060 156 452

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