Red Back Mining Inc.
TSX : RBI

Red Back Mining Inc.

November 21, 2007 08:00 ET

Red Back Announces New Intercepts at Akwaaba Deeps; Akwaaba Underground Development and Chirano Plant Expansion Approved

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 21, 2007) - Red Back Mining Inc. (TSX:RBI) (the "Company" or "Red Back") is pleased to announce that recent infill drilling at Akwaaba Deeps has returned the most significant drill intercept at Chirano to date. Hole CHRC1245D has intersected the "black breccia" unit first encountered early in the Akwaaba drill program (Hole CHRCD734D, April 2006, 13m at 64.95g/t Au), 50 metres south of hole CHRC734D. Results are as follows:



Summary

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Hole ID From To Length Grade g/t
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CHRC1245D(i) 437.20 474.65 37.45 18.89
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including 437.20 442.60 5.40 9.42
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and Black Breccia 442.60 455.00 12.40 32.30
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and 455.00 474.65 19.65 13.04
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(i) True width is approximately 75% of drilled width


Detail

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Hole ID From To Grade g/t
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CHRC1245D 437.20 438.20 17.50
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438.20 439.00 6.94
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439.00 440.00 4.15
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440.00 441.15 5.30
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441.15 442.00 15.15
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442.00 442.60 7.85
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Black Breccia 442.60 444.00 29.75
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444.00 445.00 30.20
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445.00 446.00 17.60
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446.00 447.00 18.50
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447.00 448.00 29.90
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448.00 449.00 21.10
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449.00 450.00 28.30
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450.00 451.00 36.45
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451.00 452.00 49.87
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452.00 453.00 49.50
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453.00 454.00 40.90
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454.00 455.00 36.55
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455.00 456.00 12.90
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456.00 457.00 8.94
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457.00 458.00 9.35
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458.00 459.00 35.40
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459.00 460.00 8.79
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460.00 461.00 12.55
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461.00 462.00 6.37
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462.00 463.00 27.50
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463.00 464.00 15.60
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464.00 465.00 8.15
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465.00 466.00 6.92
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466.00 467.00 6.93
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467.00 468.00 5.36
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468.00 468.50 4.46
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468.50 469.00 12.00
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469.00 470.00 12.55
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470.00 471.00 17.10
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471.00 472.00 11.60
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472.00 473.00 20.55
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473.00 474.00 16.60
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474.00 474.65 7.42
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Hole CHRC1245D provides an important second pierce point to the high grade black breccia and thereby a geological orientation to that unit. Of particular significance is the strong grade continuity in the unit as shown in the above table, its width and that this latest hole extends the zone 50m to the south.

Resource modeling of the black breccia should provide a material increase in ounces at Akwaaba Deeps. Future drilling will target this unit within the overall ore body.

Hole CHRC245D was drilled as part of a 12 hole, 6,400m programme of infill drilling aimed at converting the remaining inferred resources at Akwaaba. Three holes (1,500m) have been completed and two rigs are currently drilling at Akwaaba with scheduled completion of the programme in January 2008.

Board Approval

The Company is also pleased to report that, at a recent meeting, the Board of Directors of the Company approved the development of the Akwaaba Deeps underground mine. In conjunction with this decision, the Board also approved an expansion of the Chirano processing plant to a capacity 3.5 million tonnes per annum, a 94% increase in throughput.

Upon completion of the Chirano plant expansion and development of Akwaaba Deeps, forecast production at Chirano into 2010 will increase to approximately 250,000 ounces per annum.

Both the Akwaaba Deeps development and the Chirano Plant Expansion will be funded from cash flow from operations and from treasury.

Akwaaba Deeps Development

Based upon a scoping study prepared by AMC Consultants, Akwaaba Deeps will be mined using a Sub-level Caving ("SLC") mining method. The bulk tonnage mining study estimates that 8.0 million tonnes may be mineable at a grade of approximately 4g/t, containing a potential 1.0 million ounces.

The AMC study is an estimate based upon the indicated and inferred resource calculation released by the Company in July 2007 (News Release: July 12, 2007). An updated resource/reserve estimate for Akwaaba Deeps will be announced in the 1st Quarter of 2008 upon completion of the current infill drill program discussed above. Given drilling results to date a positive reconciliation is anticipated.

The Board of Directors is confident of the engineering and economic parameters to date for Akwaaba Deeps and accordingly has approved the development of the decline, which will commence in January 2008.

Total life of mine capital development costs for Akwaaba Deeps are estimated to be US$82.6 million over four years. Pre-production capital is approximately $25 million, which is expected to be incurred in 2008.

Project economics and physical parameters are discussed below in combination with the details of the Chirano plant expansion.

Chirano Processing Plant Expansion

To support the Akwaaba Deeps development, the Company will expand the Chirano processing facility to a nominal throughput of 3.5 mtpa. In addition to increasing capacity to handle both surface and Akwaaba Deeps ore, the expansion will address the rock hardness issue which has affected operating costs in 2007. A larger crushing facility will reduce ore size to 80% passing 12.5mm, maximizing milling efficiencies going forward. In addition, a second ball mill will be added to the plant configuration.



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Summary of Chirano Plant Expansion Capital Expenditure $US million
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Crushing plant & installation $ 6.9
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Ball Mill $ 6.0
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Pumps/cyclones $ 1.4
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Elution/gold room upgrades $ 0.7
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Construction $ 8.0
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EPCM $ 2.3
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Contingency $ 4.7
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Total Expansion $30.0
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To fast track expansion of the Chirano processing facilities, the Company has identified and acquired a suitable, brand new, mill. The purchase price of the mill was A$5.25 million. The mill and associated motors and equipment are presently in Australia and are being packaged for shipment to Ghana. Arrival in Ghana is expected in the first Quarter of 2008. This early acquisition of the mill allows the plant expansion schedule to be brought substantially forward, with mechanical completion now targeted for late in 2008.

New Chirano Project Economics

Summarized below are the Chirano Project economics, taking into account only the Chirano plant expansion and the development of Akwaaba Deeps. The analysis is limited to currently projected recoverable ounces and does not include any factors for increased resources/reserves at Akwaaba Deeps, ounces from high grade zones currently being drilled under other surface pits, and the discovery of new sub surface and surface deposits.



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Chirano Project 2008-2017 (100% basis) Units Chirano Project
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Mining
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Open Pit ore tonnes mined Mt 21.9
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Open pit grade g/t 1.57
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Strip ratio 2.5
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Underground ore tonnes mined Mt 8.0
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Underground grade g/t 3.96
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Processing
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Chirano Plant throughput Mtpa 3.5
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Total tonnes milled Mt 31.8
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Head grade g/t 2.15
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Recovery % 90.3
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Gold recovered Moz 2.0
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Unit Costs
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Mining cost per tonne milled $/t 9.9
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Milling cost per tonne milled $/t 6.5
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G&A cost per tonne milled $/t 2.2
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Total cost per tonne milled $/t 18.6
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Cash Operating cost per ounce $/oz 321
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Capital Costs
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Akwaaba Deeps M$ 82.6
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Chirano Plant Expansion M$ 30.0
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Sustaining capital M$ 34.0
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Financials
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Total Revenue(1) M$ 1,348.4
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Total Operating Costs M$ 638.5
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Total Capital Costs M$ 146.6
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Net pre-tax cashflow(1) M$ 563.3
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IRR(1) % 248%
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NPV @ 5% discount rate(1) M$ 423.1
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(1) - Assumed spot gold price 2008-2009 $750, 2010-2011 $700,
thereafter $650


Commenting on the Chirano Project, Rick Clark, President & CEO, said: "The decision to develop Akwaaba Deeps and expand the Chirano processing plant is a key turning point in the growth of Red Back. The discovery of Akwaaba Deeps has transformed the Company. What started as a modest operation with a limited life is developing into what may ultimately be recorded as a world class gold deposit. Now that the Company is unhedged and debt free, our shareholders are in a position to take full advantage of Red Back's new growth profile underpinned by a proven operation in one of the most stable mining addresses in the world.

In parallel with the development of Akwaaba Deeps and the Chirano plant expansion in 2008, will be an ongoing aggressive exploration program to identify additional new reserves. Our cost of adding reserves in 2007 has been $10 per ounce. With our most recent drilling results we have every reason to expect similar success in 2008."

Red Back Mining Inc. is an African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana and the Tasiast Gold Mine in Mauritania. At Chirano, the Company is expanding its current operations through development of newly discovered high grade underground resources. At Tasiast, gold production has commenced with commercial production anticipated by the first quarter of 2008. In addition, Red Back is continuing an aggressive exploration program to increase its resource and reserve base at both projects.

The technical contents of this release have been reviewed by Hugh Stuart, BSc., MSc, a Qualified Person pursuant to NI 43-101. Mr. Stuart is the VP - Exploration of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Samples are prepared and analyzed by fire assay using a 50 gram charge at the Analabs facility in Bibiani, Ghana in compliance with industry standards. Field duplicate samples are taken and blanks and standards are added to every batch submitted. Selected samples from this lab are check assayed each month at other Analabs laboratories worldwide.

The scoping study was undertaken under the supervision of Martin Staples (Member of the Australasian Institute of Mining and Metallurgy), Director of AMC Consultants Pty Ltd. For the purpose of reporting under National Instrument 43-101 Martin Staples is regarded as a Qualified Person.

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

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