MDN Inc.-Tulawaka 2012 Second Quarter Results

MONTREAL, QUEBEC--(Marketwire - July 23, 2012) - MDN Inc. ("MDN") (TSX:MDN) reports to its shareholders that African Barrick Gold plc (ABG), the project operator at the Tulawaka gold mine in Tanzania, in which MDN has a 30% participating interest, announced its second quarter and first half operational results.

Highlights

Tulawaka continued to perform in line with expectations during the reporting period, as it transitioned to a solely underground operation and the process plant began to operate under a batch processing method. This led to an expected reduction in production and associated higher cost. An increase in the grade profile is expected during the second half of the year, which should help increase production levels.

Tulawaka drilling continues to be successful and the operator has been able to replace reserves mined in the first half of the year, thereby extending the mine life into mid 2013.

Deeper drilling continues to encounter continuity of mineralisation at depth and ABG is targeting further extensions of the mine life. Further updates will be provided later this year as the development of the 2013 mining plan will be more advanced.

Key statistics

Tulawaka (reflected as 100%)			Three months ended 30 June					Six months ended 30 June
(Unaudited)			2012		2011			2012		2011
Underground ore tonnes hoisted	Kt		41		43			84		86
Open pit ore tonnes mined	Kt		-		-			61		-
Open pit waste tonnes mined	Kt		-		-			317		-
Ore milled	Kt		58		106			154		216
Head grade	g/t		5.9		6.7			5.6		6.3
Mill recovery		%	95.9	%	95.0	%		95.6	%	94.3	%
Ounces produced	Oz		10,537		21,517			26,500		41,131
Ounces sold	Oz		9,350		22,500			26,250		40,850
Cash cost per ounce sold	US$/oz		1,305		645			1,046		686
Cash cost per tonne milled	US$/t		211		138			178		130
Capital expenditure (100%)	US$(000	)	4,442		5,384			9,564		9,279

Operating performance

The operator is progressing with the exploration drilling programmes and has replaced reserves mined to date in 2012, allowing the mine life to be extended again, into the middle of 2013. Work is currently ongoing to construct a second underground portal, which will provide additional access for mining and future drill platforms.

During the second quarter of 2012, Tulawaka focused on process plant optimisation given ore stockpile levels. This resulted in the application of batch milling where the mill was being run at optimum throughput levels for shorter periods of time as opposed to low throughput levels on a consistent basis. This resulted in mill throughput decreasing by 39% in the second quarter of 2012, leading to production for the quarter of 10,537 ounces, 51% lower than 2011.

As a result of the above, Tulawaka's total gold production for the six months was 26,500 ounces, 36% lower than the 41,131 ounces produced in 2011. Gold ounces sold were in line with production and 36% lower than in 2011. Head grade was 11% lower than 2011 as a result of the blending of the last of the low grade stockpiles into the mill feed in the second quarter and should improve during the second half of the year.

Cash costs for the first half of the year were US$1,046 per ounce sold compared to US$686 in the prior year period. This cost increase was mainly due to the lower production base, an increase in mining activity (specifically relating to open pit mining during the first quarter) in combination with the costs incurred to service an ageing mining fleet and increased general administration cost.

Cash costs per tonne milled increased to US$178 in H1 2012 from US$130 in H1 2011, primarily as a result of the higher cost base as explained above and lower mill throughput due to the batch milling campaign.

Capital expenditure for the reporting period totalled US$9.6 million, 3% higher than the US$9.3 million in the prior year period. Key capital expenditure included:

1. Capitalised development: capitalised underground development of US $3.6 million which includes the investment in the Tulawaka underground Eastern portal extension.
2. Expansion capital: capitalised exploration drilling of US$1.9 million; and
3. Sustaining capital: US$4.1 million sustaining capital including a non-cash rehabilitation asset adjustment credit of US$0.6 million.

Exploration and Development Update

East Zone Underground Extensions

A total of 73 underground diamond core holes for 9,251 metres were drilled during H1 2012 from four drill platforms located at Levels 11E (Zone 550), 9E (Zone 250), 10 DD1 and 10 Access (Zone 150) to test the Tulawaka East Zone underground extensions between Level 11 and Level 20 (160m to 400m below the completed pit floor).

As a result it has been possible to fully replace reserves mined in the first half of 2012 and thereby been able to extend the life of the mine into 2013. Diamond drilling continues to test depth, plunge and strike extensions of the mineralised lodes between Levels 10 and 12, below current reserves in the East Zone and we remain confident in further extending the mine life.

The majority of the holes drilled during the period returned patchy grades which confirm the pinch and swell (boudinage) nature of the Tulawaka ore body. During the early part of the year, three of the holes drilled through Zone 550E returned promising high grades with visible gold in core between levels 11 and 12. This re-emphasises the potential of high grade mineralisation at depth, within the 550 Zone even though holes around them did not show the same concentration of mineralisation.

Significant intersections made during the period include the following;

• TUGD00427: 1.1m @ 9.8g/t Au.
• TUGD00430: 2.2m @ 13.7g/t Au.
• TUGD00437: 1.6m @ 120.0/t Au and 2m @ 34.8g/t Au.
• TUGD00443: 0.9m @ 680.0g/t Au.
• TUGD00470: 0.6m @ 11.5g/t Au.
• TUGD00474: 3.5m @ 13.5g/t Au.
• TUGD00511: 1.0m @ 12.0g/t Au.

Figure - Tulawaka long section showing reserve outline, planned drill programmes and recent assay results

Internet link: http://www.mdn-mines.com/pdf/cartes/Tulawaka_drill_update_07_2012.pdf

Though results received to date consist of narrow intercepts, they are significant in that they confirm the predicted continuity (at depth) of the orebody, within zones 150 and 250. The intersection of 1.0m @ 12.0g/t Au from TUGD00511 is around Level 19 (850m RL) in zone 150. This, and the fact that historically, closed spaced sampling has realised more ounces than the reserve estimates, provides a good indication of the resource potential at depth.

The samples were analyzed by fire assay at the Tulawaka Mine Laboratory and SGS Laboratory of Mwanza, Tanzania, which both are certified according to international standards. Supervision of the drill program and of the quality analysis verification program is done by ABG Tulawaka Mine Geologists. Marc Boisvert, geological engineer, MDN Vice President, Exploration, and a qualified person under National Instrument 43-101 has reviewed the technical and scientific information in this news release.

The Tulawaka project is a contractual joint-venture between MDN (30% participating interest) and Pangea Goldfields Inc. (70% participating interest), a wholly owned indirect subsidiary of African Barrick Gold plc and project operator and owner through its subsidiary Pangea Minerals Ltd. The information disclosed on the Tulawaka Gold Mine is based on information provided by the Operator.

About MDN

MDN Inc. (TSX:MDN) is a mining exploration and development company exploring and developing projects in Quebec and Tanzania. MDN is also active in the search for new business opportunities that can increase shareholder value. In addition to its 30% participating interest in the Tulawaka gold mine, MDN is the operator and owner of a majority interest in mineral licenses totalling 757 km² in the vicinity of the Tulawaka mine. MDN Inc. also owns a 72.5% interest in Crevier Minerals Inc., which owns an NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Quebec. MDN has an option to increase its equity participation in Crevier Minerals Inc. to a maximum of 87.5%. Additional information is available on MDN's website at www.mdn-mines.com.

Forward-Looking Statements

Other than statements of historical fact, all statements in this release that address events or developments that the Company expects to occur are forward-looking statements. Although the Company believes that the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements are discussed in greater detail in the Company's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. Investors and others who base themselves on the Company's forward-looking statements should carefully consider the factors mentioned in the Annual Information Form as well as the uncertainties they represent and the risk they entail. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct, and as such, the forward-looking statements in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

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