Mundoro Mining Inc.
TSX : MUN

Mundoro Mining Inc.

August 15, 2005 17:45 ET

Mundoro Announces Interim Results for Second Quarter, 2005

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 15, 2005) - Mundoro Mining Inc. (TSX:MUN) announces that the Company's interim financial and operating results for the quarter ended June 30, 2005 have been filed on the SEDAR system. The highlights provided in this release should be read in conjunction with the Company's unaudited interim financial statement and Management Discussion and Analysis for the second quarter, which is available on SEDAR at www.sedar.com. All dollar amounts are in Canadian dollars unless otherwise indicated.

Operations Update

On June 14, 2005, the Company reported on the results of a Pre-Feasibility Study conducted by AMEC Americas Ltd., demonstrating the economic viability of developing a large-scale open-pit mine at Maoling. Mining operations envisaged in the study are from an open-pit at an initial rate of 20,000 tonnes per day, expanding to 35,000 tonnes per day after the second year of production. Pre-production capital is expected to be approximately US$235 million, with an additional US$63 million required for plant expansion. Ore is to be processed by conventional crushing and grinding followed by leaching and carbon-in-pulp gold extraction. With a strip ratio of 1.36:1, gold production is expected to average 328,000 ounces per year with a cash operating cost of US$187 per ounce over the expected initial mine-life of approximately 8 years. The pre-feasibility study estimates an NPV (0% discount, pre-tax & ungeared) of US$244 million and an IRR of 18%, using a gold price of $400 per ounce.

The study only considered the project's existing Indicated Resources for development, resulting in a statement of Probable Reserves that is included in the table below, together with the project's remaining Indicated and Inferred Resources:



Tonnes Grade Contained Gold
(0.50 g/t cut off grade) (000's) (Au g/t) Ounces (000's)
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Probable Reserves
Zone 1 88,781 0.99 2,826
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Indicated Resources
Zone 1 31,419 0.98 961
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Inferred Resources
Zone 1 87,600 0.80 2,261
Zone 4 95,000 0.90 2,797
Total Inferred 182,600 0.86 5,059
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Infill and geological drilling resumed early in the second quarter at the south end of Zone 1 and continued through the quarter. This work is designed to improve the knowledge base on a number of post-mineral faults in the area thereby improving the integrity of the geological model. Together with drilling completed earlier, but subsequent to the last resource estimate, this in turn is expected to help upgrade the Inferred Resources of the area in the next resource estimate that will be completed later in the year, to be considered for development in the final feasibility study expected mid-2006.

Work is underway to advance Maoling through the next phase of project development and a number of milestones are expected to be reached in the third quarter, including the renewal of the Joint Venture's business license; the award of the contract for the Final Feasibility Study on Zone 1; the continuation of field work to support final feasibility studies together with exploration work focusing on upgrading and expanding the Zone 1 deposit.

Mundoro will continue to extend the Company's profile in North American and in European investment communities with the objective of sustaining a reasonable valuation in the markets for the Company and its shares. Ongoing communications activities are also being undertaken in China to assist in the advancement, approval and permitting of the Maoling project and the Company is once again a major sponsor of the highly successful China Mining 2005 convention in Q4, 2005.

Financial Highlights:

- The consolidated loss for the quarter under Canadian GAAP was $1,883,762 or $0.07 per share compared with a loss of $2,062,124 or $0.08 per share during the same quarter of 2004.

- Mineral exploration costs for the quarter were $1,301,985 compared with $1,320,850 during the same quarter of 2004. All of the exploration costs were expended on the Maoling Gold Project, China.

- During the quarter, the Company raised $1,919,995 from the exercise of warrants and $424,811 from the exercise of stock options, resulting in a total of 28,335,539 shares issued as at June 30, 2005. A total of 376,022 warrants and 3,453,500 options remain outstanding, representing potential additional cash resources of $5,352,178 if exercised.

- Income from interest in the quarter amounted to $42,215.

- The Company ended the quarter with $7,307,890 in working capital, compared with $9,739,447 at the end of the same quarter in 2004.

- The Company increased its investment in the Maoling property in the quarter by $452,000 through direct financing of additional field work and pre-feasibility report costs on Zone 1.

About Mundoro Mining Inc.

Mundoro Mining Inc. is a well-financed resource company focused on the exploration and development of the multi-million ounce, feasibility stage Maoling gold deposit in Liaoning Province, China. The Company has a 79% interest in the project through a Sino-Foreign co-operative joint venture with the corporate arm of the Liaoning provincial government, and has been aggressively exploring the 20 square kilometer exploration license area. Thus far, two deposits that outcrop at surface have been outlined at Maoling in which disseminated, free-milling gold mineralization occurs within a sequence of altered phyllitic metapelite to meta-siltstone with 3-5% disseminated sulphide mineralization. A pre-feasibility study completed in June of 2005 demonstrated the economic viability of developing a large-scale open-pit mine on the Zone 1 orebody to produce more than 350,000 ounces of gold per year over 8 years. Significant opportunity remains to both optimize the mine's design and to expand the overall resource-base for consideration in the final feasibility study through ongoing infill and expansionary drilling.

The statements herein that are not historical facts are forward-looking statements. These statements address future events and conditions and so involve inherent risks and uncertainties, as disclosed under the heading "Risk Factors" in the company's periodic filings with Canadian securities regulators. Actual results could differ from those currently projected. The Company does not assume the obligation to update any forward-looking statement.

The pre-feasibility study described herein was prepared to broadly quantify the Maoling Zone 1 deposit's capital and operating cost parameters, and to further the development of the project. It was not prepared for use as a valuation of the deposits, nor should it be considered to be a final feasibility study. The information contained in the Study reflects various technical and economic conditions at the time of writing that can change significantly over relatively short periods of time. There can be no assurance that the potential results contained in the Study will be realized.

Reserves described in this news release were prepared under the direction and oversight of Mr. Mark Pearson P.Eng. of Vancouver, BC, an 'Independent Qualified Person' as defined by National Instrument 43-101. Resource estimates included were also prepared by AMEC, under the direction and oversight of S. Lomas, P.Geo. of Vancouver, BC, also an 'Independent Qualified Person' as defined by National Instrument 43-101. Full technical reports outlining the basis for estimates of Reserves and Resources are available on the SEDAR system and can be viewed at www.sedar.com.

The TSX has neither approved nor disapproved of the information contained herein.

Contact Information

  • Mundoro Mining Inc.
    Colin H. McAleenan
    Chairman and CEO
    (604) 669-8055
    or
    Mundoro Mining Inc.
    Cyrus Ameli
    Vice President, Communications
    (604) 669-8055
    (604) 669-8056 (FAX)
    info@mundoro.com
    www.mundoro.com