Intrepid Mines Limited
TSX : IAU
ASX : IAU

Intrepid Mines Limited

February 28, 2011 08:00 ET

Intrepid Mines Limited Releases Financial Results for 2010

For the Three and Twelve Months to 31 December 2010

BRISBANE, AUSTRALIA--(Marketwire - Feb. 28, 2011) - Intrepid Mines Limited (TSX:IAU)(ASX:IAU) (the "Company") is pleased to announce the release of the Company's Audited Financial Results as well as its Management's Discussion and Analysis for the three and twelve month periods ended 31 December 2010.

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 through Marketwire (www.marketwire.com) or the ASX website (www.asx.com.au). Numbers in brackets generally describe performance for the period ended 31 December 2010.

All dollar values are United States Dollars unless otherwise stated.

OVERVIEW

Finance

  • Group loss after tax for the three months ended 31 December 2010 - $3.9 million (for the twelve months ended 31 December 2010 – a loss after tax of $4.9 million) - includes discontinued operations.
  • The sale of the Paulsens Mine to Northern Star Resources Limited, completed in July 2010, was for a purchase consideration of up to A$40 million, of which A$34.8 million has been received.
  • Gross proceeds of C$112.2 million received from a bought deal offering of 63,400,000 ordinary shares.
  • Gross proceeds of A$31.9 million received from subscriptions by existing shareholders under a share purchase plan. Ordinary shares issued totalled 17,921,420.
  • 2,239,059 options to acquire ordinary shares exercised.
  • On 19 November 2010, Troy Resources announced the first gold pour from the Casposo project. This triggered the obligation for payment of the final $2 million due under the sale agreement, and which is now payable in May 2011. The income is reflected in the latest quarter's financial statements.
  • Cash balance and short term deposits (no debt) at Quarter end was $182.1 million.

Tujuh Bukit

-- On 19 October 2010, the Company reported significant results from Hole GTD - 10- 162, which intersected 522 metres ("m") averaging 0.45 grams per tonne ("g/t") gold ("Au"), 0.48% copper ("Cu") and 127 parts per million ("ppm") molybdenum ("Mo").
 
-- On 8 November 2010, the Company reported results from three holes: GTD -10 - 165: 120 m at 0.89 g/t Au, 0.58% Cu and 127 ppm Mo; GTD - 10 - 166: 296 m at 0.67g/t Au and 0.56% Cu; and GTD -10 -167: 398 m at 0.77 g/t Au and 0.54% Cu.
 
-- On 19 November 2010, the Company announced that the technical report entitled "Tujuh Bukit Project Report on Mineral Resources," dated November 2010, had been filed on SEDAR (www.sedar.com) as well as with the ASX (see the Company's news release of 30 September 2010 for the initial detail of the Resource).
 
The report, prepared by independent consultants Hellman and Schofield Pty. Ltd. and reported in accordance with the JORC Code and Canadian NI 43-101, estimated an initial Inferred Resource of 500 million tonnes ("Mt") at 0.4% Cu and 0.5 g/t Au, at a cut-off grade of 0.2% Cu, for the known porphyry copper-gold zone within the Tumpangpitu area of the Tujuh Bukit Project.
 
-- On 14 December 2010, the Company reported the results of the column leach test program, conducted in preparation for the preliminary economic assessment of the near surface gold oxide deposit at Tumpangpitu. The report noted excellent gold recoveries and an updated oxide Inferred Resource estimate of 130 Mt at 0.55 g/t Au and 18 g/t Silver for 2.4 million ounces of contained gold and 80 million ounces of contained silver.

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 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.

Forestry Activities

The Indonesian Forestry Law restricts non forestry activities within protected forests and prohibits mining using an open pit method in protected forest areas. The area of the Porphyry copper-gold resource estimate, and the Zone A, Zone B and Zone C oxide resource estimate areas fall within a protected forest area. Intrepid's Alliance partner, PT IMN, is working with relevant Indonesian authorities regarding a potential review of forest land status. There is no assurance that the forestry reclassification will take place in this instance.

Qualified Person

The information in this announcement that relates to exploration results is based on information compiled by or under the supervision of Malcolm Norris, who is a full-time employee of Intrepid Mines Limited. Mr. Norris 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 a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. Norris consents to the inclusion in the report 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 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 the report of the matters based on his information in the form and context in which it appears. Dr Hellman has undertaken independent verification sampling and assaying of drill core with a close agreement of results with those previously reported. A 40 x 40 x 6 metre block model was used for the quoted estimates. If smaller selective mining units are considered it is estimated that an approximate 10 to 20% lift in grade may result. In future, increasing the drilling density in areas of higher gold grades is anticipated to achieve a higher grade outcome.

Resource Estimation Notes

Geological interpretations of the copper mineralisation provided by Intrepid were used to define a "top-of-porphyry" surface to restrict estimates to geologically reasonable limits. The block model was coded by oxidation zone and estimates were restricted to the sulphide or transitional zones as well as to the potential porphyry zone. 6m length- weighted composites from the transitional and sulphide zones were used to estimate, via Ordinary Kriging, Cu, Au, Mo, As, SG and Ag into a 40 x 40 x 15 metre block model. Silver values within the primary mineralisation are low (eg <5g/t) and their estimates are not reported.

Inferred Resources are defined on the basis of a 120m x 120m x 80m search ellipsoid using a maximum of 32 6m composites and a minimum of 12. Two more passes to 240m x 240m x 160m were used to generate "potential" blocks within the constraints of the porphyry model. In general, these potential blocks define extra similar tonnages at similar grades to the quoted estimates. These, however, do not constitute "resource estimates" and there is no guarantee that they will be upgraded to resources with further drilling. Drill spacing of the deeper holes is approximately 200m x 200m. However, there are a considerable number of shallower holes that intersected copper mineralisation in transitional and primary mineralisation. Approximately 5% of quoted resources are from transitional mineralisation. 5172 6m composites of Cu and Au are available for estimation together with 5072 Mo, 4955 As and 3446 SG values. Composites from the porphyry zone number 2408, 2408, 2379, 2402 and 1684 for Cu, Au, Mo, As & SG, respectively.

Two different software products were used to provide estimates as well as two different operators. Results closely agree within the meaning of "Inferred". Cross sections of the modelled results were plotted in juxtaposition with assay and geological data to check for geological plausibility. It is noted that there is considerable scope to add to the quoted resource with most sections having significant areas that are yet to be drill tested.

Due to the preliminary nature of the project pit optimisation has not yet been undertaken resulting in uncertainty as to how much of the resource may report to a conceptual pit. At a 0.2% Cu cut off grade the following tonnages occur at >0m elevation, 0 to - 200m, -200m to -400m and -400m to -600m: 58mt, 131mt, 196mt and 114mt respectively. Although these depths preclude open pit mining in the deeper portions of the resource, the possibility of bulk underground mining techniques (eg block caving) remains.

Sample Analysis

Intrepid exercises a strict chain of sample custody in its drilling program at Tujuh Bukit. Joint Venture personnel remove core from the drill rig and deliver it to a project geologist who logs the core and marks the core into two metre sample intervals. Intrepid and Joint Venture personnel supervise the immediate splitting, sawing and bagging of samples, and packaging of groups of samples for dispatch to the laboratory. The remainder of the split core remains on site.

Samples are securely packaged, batched, and then transported under supervision to Intertek's laboratory facility in Jakarta. At the laboratory, the samples are prepared by crushing and pulverizing and a 30 gram charge is assayed for gold by conventional fire assay and/or atomic absorption methods. Multi-element ICP analysis is carried out using a multi-acid digestion process. All samples that contain silver and/or copper, lead, and zinc values that exceed the upper detection limits for ICP are re-analysed by conventional atomic absorption methods to determine the absolute values of these metals.

ABN: 11 060 156 452

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