Red Back Mining Inc.
TSX : RBI

Red Back Mining Inc.

May 06, 2008 16:15 ET

Red Back Announces First Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2008) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to report its financial results for the First Quarter ended March 31, 2008. The consolidated financial statements together with Management's Discussion and Analysis will be available on the Company's web site (www.redbackmining.com) and on SEDAR (www.sedar.com).

Highlights for the First Quarter

The results from operations during the First Quarter of 2008 reflect the significant steps taken in 2007 by the Company to achieve growth and profitability. The Company, debt free and un-hedged, generates revenues from two operating mines and has a strong working capital position to support the underground development of Akwaaba Deeps at Chirano and expansions of both the Chirano and Tasiast plants. The Company's highlights for the first quarter include:

- Commencement of commercial production at Tasiast

- Total gold production of 63,459 oz

- Average realized gold price of $935 per oz

- Net income of $19.9 million

- Average monthly cash flow from operations of $10.3 million

- Cash operating costs of $400 per oz

- Significant increases in Tasiast's measured and indicated resources (63% to 1.89 million oz) and proven and probable reserves (58% to 1.64 million oz) (News Releases: April 7, 2008 and February 25, 2008)

- New, higher reserve estimates at Chirano (1.91 million oz), inclusive of underground reserves at Akwaaba Deeps (0.77 million oz) (News Release: April 9, 2008)

Results of Operations

The table below summarizes the key operating statistics of the Company's for the quarter.



Three
months
ended
March 31,
Three months ended March 31, 2008 2007
Chirano Tasiast Total (note)
---------------------------------------------
Gold revenue ($'000) 31,722 22,692 54,414 16,214
Profit from operations ($'000) 13,720 4,950 18,670 1,015

Tonnes milled 544,301 324,122 868,423 509,629
Average grade (g/t) 2.09 3.08 2.46 2.08
Average recovery 91.0% 94.1% 92.45% 89.8%
Gold produced (oz) 33,931 29,528 63,459 32,609
Gold sold (oz) 34,011 24,177 58,188 31,205

Average revenue per oz $ 932 $ 939 $ 935 $ 520

Cash operating costs per oz $ 411 $ 386 $ 400 $ 396

Note: Chirano operations only. Tasiast, acquired on August 2, 2007,
achieved commercial production at the beginning of 2008.


Chirano Gold Project, Ghana

For the first quarter, Chirano produced 33,931 oz at a cash operating cost of $411 per ounce. This is in line with budget and Chirano remains forecasted to produce 135,000 oz at cash operating costs below $400 for 2008.

The expansion of the Chirano processing facility to a nominal throughput of 3.5 mtpa remains on schedule. In addition to increasing capacity, the expansion is addressing the rock hardness issue which affected operating costs in 2007. A new crushing facility is expected to be operational in October 2008 with commissioning of the full plant expansion occurring during the first quarter of 2009. Notably, the new ball mill (News Release: November 21, 2007) and related equipment is already on site. Upon completion of the plant expansion, annual gold production at Chirano is expected to increase to 250,000 oz.

The construction of the Akwaaba Deeps underground mine has commenced. First ore from Akwaaba Deeps is expected to be delivered to the mill in the fourth quarter of 2008. A further reserve update for Akwaaba Deeps will be released by the end of the Second Quarter of 2008.

Tasiast Gold Project, Mauritania

For the first quarter, Tasiast produced 29,528 oz at a cash operating cost of $386 per ounce. This is in line with budget and Tasiast remains forecasted to produce 110,000 oz at cash operating costs around $370 for 2008.

The new Heavy Fuel Oil ("HFO") power plant at Tasiast was commissioned in April and is now running at design capacity. With the HFO plant online, operating costs are expected to decrease significantly.

The expansion of the Tasiast processing facility to a nominal throughput of 2.5 mtpa is ongoing. Commissioning of this facility is expected in early 2009. With the completion of the expansion, gold production at Tasiast is expected to exceed 200,000 oz per annum.

The construction of the test dump leach pads (News Release: April 7, 2008) is now complete and irrigation of the pads will be commenced shortly. Bench scale testing to this point suggests that dump/heap leaching of the lower grade oxide material at Tasiast is achievable with significant benefit to the project. A development decision in this regard is scheduled for the Third Quarter of 2008.

About Red Back

Red Back Mining Inc. is an unhedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana (90% interest) and the Tasiast Gold Mine in Mauritania (100% owned). Major plant expansions at both Chirano and Tasiast have commenced. At Chirano, the Company is expanding its current operations through development of the Akwaaba Deeps underground mine. Red Back is continuing an aggressive exploration program to increase its resource and reserve base at both projects.

This News Release contains forward looking statements which are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements. The Company does not intend to update this information and disclaims any legal liability to the contrary.

On behalf of the Board of Directors:

Richard P. Clark, President

Contact Information

  • Red Back Mining Inc.
    Simon Jackson
    VP-Corporate Development
    (604) 806-3070
    (604) 689-5452 (FAX)
    or
    Red Back Mining Inc.
    Sophia Shane
    Investor Relations
    (604) 689-7842
    Website: redbackmining.com