Lysander Minerals Corporation
TSX VENTURE : LYM

Lysander Minerals Corporation

October 16, 2008 13:28 ET

Lysander Minerals Corporation: Technical Report Filed on Verticalnaya Coal Mine, Ukraine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 16, 2008) - Lysander Minerals Corporation (TSX VENTURE:LYM) ("Lysander") is pleased to announce that a technical report, prepared in accordance with NI 43-101 by IMC Group Consulting Ltd of the United Kingdom, on the Verticalnaya coal mine in Ukraine has been received from Ukraine Coal Ltd. The report may be viewed on SEDAR (www.sedar.com) and Lysander's website (www.lysanderminerals.com).

As previously announced, Lysander has an option to acquire all of the shares of Ukraine Coal Ltd.'s Ukraine subsidiary which has a 51% shareholding in Skhidna Vugilna Kompania ("East Coal Company" or "ECC") and which has the right to acquire the remaining 49% interest of ECC (see news release dated June 26, 2008).

The Verticalnaya Mine is located in the prolific Donbass coal basin of the Lugansk region. The mine - which produced anthracite, a high quality, premium-priced coal - was placed on care and maintenance after a period of low production following the break-down of the Soviet Union.

Lysander plans to re-open the mine on a significantly expanded basis, developing mining operations in the virgin areas of H11, H11B and H8 coal seams.

The report states that reserves and resources, under JORC (2004) standards, are as follows:



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As at June 1, 2008
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Reserves Resources
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Proven Probable Measured Indicated Total
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H11 5,800,000 - 9,600,000 3,000,000 12,600,000
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H11B 10,400,000 - 32,000,000 - 32,000,000
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H8 - 11,000,000 15,700,000 15,900,000 31,600,000
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Total 16,200,000 11,000,000 57,300,000 15,900,000 76,200,000
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Reserves are quoted after allowing for all losses. Resources are quoted as in-situ totals, with no allowance for either mining or geological losses and are inclusive of reserves. The coal seams are contained in strong competent strata, predominantly siltstone and sandstone.

Inclined drifts are planned to be driven to access the production areas. The first longwall in the H11/H11B seam is anticipated to come into production during month 33 and the second during month 45. The report states that production from these two longwalls is anticipated at 1,300,000 tonnes per year. Thereafter, additional longwalls are intended to be phased into production, increasing the potential saleable tonnage to 1,800,000 tonnes per year. All longwalls would be fully mechanized using shearer or plough cutting and loading machines. Coal would be removed from the mine via conveyor belt.

Presently, the coal resources of H8 are in the flooded section of the mine. The report states it will take approximately six months, using the pumps readily available, to pump out the water and assess the developed section of the coal seam. When two longwalls are established in the H8 seam, the report states that they will provide a continuous Run-of-Mine output of 1,700,000 tonnes per year.

The report states that projected capital expenditure to develop the mine project in the initial years (2009-12) is US$237.8 million. This estimate includes $98.0 million in operating expenses incurred prior to commencement of commercial coal production which have been capitalized under the Company's business plan. Additional expenditure over the remaining life (2013-2022) to maintain production is estimated at US$208.3 million - for a total of US$446.1 million over the mine life.

It further states that cash operating costs over the 14 year mine life are expected to average US$31.19 per saleable tonne of production (excluding capitalized development costs incurred during the initial years).

The report also states that a net present value of US$352.1 million (discounted at 12%) has been calculated based upon cash flows from the Company's business plan. Under the business plan, the payback period is 7 years and the Internal Rate of Return (IRR) is 35.2%.

It is stated that the surface mine site covers approximately 10.4 hectares, including 3.0 hectares of approach roads. It is located in a rural area with electrical power supply, mains water, mains sewage, a railway line and good access roads already established. The main administration building is functional and capable of providing services required for management and workers.

Subject to fund-raising and exercise of its option to acquire the property interest, Lysander expects to be a leader in investment into the Ukraine mining sector, develop one of the first modern coal mines in Ukraine and potentially capitalize upon new opportunities within the Donbass coal region.

On behalf of the Board,

Bryce M.A. Porter, President and CEO

About Lysander

Lysander is re-organizing to take advantage of development opportunities, commencing with the Verticalnaya mine. In June 2008, Lysander has added to its Board of Directors Mr. Charles Pitcher, a director and former CEO of Western Canadian Coal Corp., who is a mining engineer and manager with vast experience, and Mr. John Conlon, whose directorships include Cambrian Mining PLC, Western Canadian Coal Corp. and Coal International PLC, who has extensive experience in underground mining operations and the management and financing of mines.

The Verticalnaya coal mine is situated in the Lugansk region of Ukraine. The mine produced anthracite, a high quality, premium priced coal. It is on care and maintenance after a period of low production following the break-down of the Soviet Union.

Please visit our website at www.lysanderminerals.com for further information.

This news release may contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the TSX Venture Exchange, the British Columbia Securities Commission and the US Securities and Exchange Commission.

The TSX - Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Lysander Minerals Corporation
    Bryce M.A. Porter
    President and CEO
    (604) 681-8069
    (604) 685-4675 (FAX)
    Website: www.lysanderminerals.com