MDN Inc.
TSX : MDN

MDN Inc.

October 22, 2010 08:47 ET

MDN Inc.: Tulawaka Continues to Show Promising Drill Intercepts From Underground and Surface Drilling Programs

MONTRÉAL, QUÉBEC--(Marketwire - Oct. 22, 2010) - MDN Inc. ("MDN") (TSX:MDN) notifies its shareholders that African Barrick Gold plc (ABG), the project operator of the Tulawaka gold mine in Tanzania in which MDN has a 30% participating interest, announced third quarter and nine months operational results and positive exploration drilling results in the underground mine and at nearby West Zone and Mojamoja prospects.

Exploration and Corporate Development Update

At Tulawaka East Zone Underground, exploration drilling continued to extend the known high-grade mineralised shoots below the previously defined Level 7 resource, indicating potential to further extend the mine life beyond 2011. At the same time, updated resource modelling on the Main West Zone and Mojamoja prospects is being completed to assess the near surface and open pit potential of resources within trucking distance to the Tulawaka plant.

East Zone Underground Extensions

During Q3 2010 at the Tulawaka East Zone Underground 4,630m was achieved in 25 diamond drilled (DD) holes from the Level 7 Access drill drive. Drilling continued to focus on extensions to high grade shoots with Zones 250-500 below Levels 9 and 10. Quartz veining encountered in a number of the drill holes showed visible gold. Significant intersections included:

  • TUDG00236 cut 3m @ 62.2g/t Au and 5m @ 42.1g/t Au 
  • TUDG00245 cut 5.3m @ 69.7g/t Au
  • TUDG00246 cut 2m @ 15.7g/t Au and 3m @ 20.2g/t Au 

It is anticipated that there will be an increase in resources between 20250E and 20500E within Zone 250, Zone 400 and Zone 550. Diamond drilling continues to test depth, plunge and strike extensions to the mineralised lodes throughout the East Zone and is currently focused on increasing reserves and resources for the year-end update. The underground diamond drill programme is expected to continue throughout the rest of the year and into next year.

West Zone and Mojamoja prospects

West Zone extension and infill drilling was completed during Q3 2010, in which eight holes were drilled for 1,027m. Significant intercepts include :

  • 3m @ 19.59g/t Au from 134m,
  • 5m @ 1.93g/t Au from 68m and
  • 5m @ 1.84g/t Au from 130m

Open pit optimisation studies are underway on West Zone and Mojamoja resource areas to delineate potential mineable ore within trucking distance of the Tulawaka plant. 

Production summary

Total gold production at Tulawaka for the quarter was 15,642 ounces compared with the prior period of 29,489 ounces. For the nine-month period gold production was 43,156 ounces compared with 74,538 ounces in the prior year period. The lower gold production during the quarter compared to the prior year period was a result of mining very high grade ore in the 2009 quarter compared to the current quarter.

Cash costs for the quarter were $749 per ounce sold compared to $397 in the prior year period. For the nine month period they were $678 per ounce sold compared to $385 in 2009. During the quarter, the increase was mainly due to the lower production base compared to the corresponding quarter in 2009.

Gold ounces sold were in line with production for both the quarter as well as the nine-month period.

"A comparison between Q2 2010 and Q3 2010 shows that production indicators are improving. The underground mine had hoisted more tonnage, resulting in a general better processing grade and more ounces produced, indicating that the program put in place during the first half of 2010 by ABG is starting to give positive results", said Serge Bureau, President and CEO of MDN Inc.

Capital expenditure for the quarter totalled $5.3 million compared to $1.4 million in the prior year period. For the nine-month period the amount was $10.7 million compared to $2.8 million in the corresponding period of 2009. The increase of capital during the quarter was due to the Tulawaka mine life extension program. During the quarter, the mine crew at Tulawaka continued to focus on an aggressive exploration drilling programmes for both the underground and open pit resources in order to extend the mine life beyond 2011. This programme has been supported by the re-investment of additional mining equipment to increase exploration development and to support mine life extension.

The samples were analysed 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 are done by ABG Tulawaka Mine Geologists. Marc Boisvert, geological engineer, Vice President, Exploration, and a qualified person under National Instrument 43-101 has reviewed the technical and scientific information in this news release.

About MDN

MDN Inc.(TSX:MDN) is a mining exploration and development company with exploration and development projects in Québec and Tanzania. MDN also remains 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 703 km2 in the vicinity of the Tulawaka mine. MDN Inc. also owns a 67.5% interest in Crevier Minerals Inc. which in turn 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

All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward looking statements. Although the Company believes 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 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 such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

Contact Information

  • MDN Inc.
    Serge Bureau, P.Eng.
    President and CEO
    514-866-6500, ext. 221
    or
    MDN Inc.
    Marc Boisvert, P.Eng.
    Vice President, Exploration
    514-866-6500, ext. 227
    or
    Sun International Communications
    Nicole Blanchard, Investor Relations
    450-973-6600
    Nicole.blanchard@isuncomm.com