Red Back Mining Inc.
TSX : RBI

Red Back Mining Inc.

September 07, 2010 09:00 ET

Red Back Mining Inc.: Tasiast M&I Resources Increase by 42% to 9.25 Moz

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 7, 2010) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to report continued Resource growth at its 100% owned Tasiast Gold Mine ("Tasiast") in Mauritania.

Since the previous December 2009 Mineral Resource estimation (February 1, 2010 release) the Measured and Indicated Resource at Tasiast has increased by 2.74Moz to 9.25Moz (a 42% increase) and the Inferred Resource has increased by 0.63Moz to 1.93Moz (a 48% increase) (at cut off grades of 0.2g/t for oxide and 0.5g/t for fresh material).

Tasiast Resources (August 2010)

Zone Cut- Off Measured Indicated Measured + Indicated Inferred
Mt Au g/t Moz Mt Au g/t Moz Mt Au g/t Moz Mt Au g/t Moz
Oxide 0.2 28.89 0.72 0.67 17.93 0.65 0.37 46.82 0.69 1.04 5.5 0.6 0.11
Fresh 0.5 68.99 1.64 3.63 79.44 1.79 4.57 148.43 1.72 8.20 35.6 1.6 1.82
Total   97.88 1.37 4.30 97.37 1.58 4.95 195.25 1.47 9.25 41.2 1.5 1.93
                           
All ore types 1.0 44.94 2.25 3.26 50.20 2.47 3.99 95.14 2.37 7.25 19.9 2.3 1.48
  • The Company reports resources on the basis of mining cut-off grades to be applied to the various ore types and, for comparison purposes, at a 1.0 g/t cut-off grade
  • Minerals Resources are reported below the July 31, 2010 mined surface.
  • Figures may not add correctly due to rounding.
  • Oxide is referred to as material amenable to Dump Leaching and CIL. Fresh is referred to as material amenable to Heap Leaching and CIL.
  • The resources are estimates of recoverable tonnes and grades using Multiple Indicator Kriging with block support correction into 15 metres (East) by 25 metre (North) by 5 metre (Elevation) model blocks and assuming smallest mining unit for ore selection in mine grade control of 3 metres (East) by 5 metres (North) by 2.5 metres (Elevation).
  • Measured resources lie in areas where drilling is available at a nominal 25 x 25 metre spacing, Indicated resources occur in areas drilled at approximately 25 x 50 metre spacing and Inferred resources exist in areas of broader spaced drilling.
  • Gold estimation and model blocks were constrained within geologically derived wireframes.

Approximately 90% of the Resource increase has been generated by ongoing drilling on the Greenschist Zone at the West Branch deposit, with the remainder added from recent drilling at Piment North Extended, a new discovery that extends the mineralization at Tasiast for 2.5km north of the previous resource estimate.

Since December 31, 2009 a further 236 holes for 71,880 metres have targeted the West Branch deposit generating this increase in Resources. This latest program at West Branch continues to demonstrate the consistently wide, high grade mineralisation across the strike of the Greenschist Zone. The table below sets out selected intercepts that form part of the current resource estimate:

Section Hole From To Metres Au g/t Including
70911 TA05304RD 573 629 56 2.30 11m at 4.84g/t
71061 TA07068RC 225 304 79 1.09  
71111 TA05007ARD 774 837 63 0.81 2nd Deep Hole
71136 TA05330RC 322 410 88 2.45  
71161 TA05323RC 313 386 73 3.09  
71186 TA05324RC 403 475 72 4.52 29m at 6.48 g/t
71186 TA05332RC 326 407 81 3.00 17m at 4.94g/t
71211 TA02371RC 338 420 82 2.85  
71236 TA05334RC 429 476 47 1.72  
71236 TA05333RC 334 416 82 2.87  
71261 TA05325RC 334 417 83 3.19 25m at 5.06g/t
71261 TA05326RC 352 453 101 3.21 33m at 6.66g/t
71286 TA02331RC 275 369 94 3.27 35m at 4.13g/t
71286 TA02382RC 404 493 89 2.88 30m at 5.18g/t
71311 TA02372RC 283 380 97 2.76 32m at 4.51g/t
71311 TA05327RC 313 421 108 2.63 31m at 5.04g/t
71361 TA02373RC 291 386 95 2.84 23m at 5.49g/t
71361 TA05331RC 327 426 99 2.85 36m at 4.66g/t
71386 TA07065RC 336 440 104 2.26  
71386 TA02381RC 429 506 77 3.17  
71411 TA06501RC 276 377 101 3.32 38m at 5.05 g/t
71411 TA02300RC 305 405 100 3.07 38m at 4.86g/t
71436 TA02380RC 394 488 94 2.72  
71436 TA06515RC 324 423 99 3.37 36m at 5.33g/t
71461 TA02298RC 302 404 102 2.73 37m at 3.71g/t
71461 TA02294RC 398 497 99 3.35 32m at 5.61g/t
71486 TA02378RC 303 404 101 2.02  
71486 TA02379RC 365 463 98 3.59 40m at 5.30g/t
71511 TA06514RC 331 422 91 2.46  
71511 TA06507ARC 407 516 109 2.91 49m at 4.91g/t
71536 TA06516RC 390 489 99 4.20 37m at 6.29g/t
71561 TA06502RC 361 463 102 3.32 37m at 5.37g/t
71561 TA02296RC 332 431 99 3.13 39m at 5.01g/t
71586 TA06513RC 336 421 85 3.17 24m at 4.31g/t
71586 TA06517RC 393 488 95 1.71  
71611 TA05316RC 357 469 112 3.52 47m at 6.53g/t
71611 TA05317RC 319 399 80 2.10  
71636 TA02266RC 255 353 98 2.54  
71636 TA08011RC 378 465 87 2.08  
71661 TA06510RC 300 396 96 2.32  
71661 TA06506RC 376 458 82 1.74  
71686 TA07067RC 262 362 100 2.02  
71686 TA08012RC 345 391 46 4.14  
71711 TA08008RC 244 341 97 2.29  
71711 TA07064RC 310 398 88 1.96  
71736 TA08007RC 254 340 86 2.61  
71736 TA05336RC 322 398 76 2.23  
71761 TA07059RC 259 347 88 2.74 26m at 6.44g/t
71761 TA07060RC 305 392 87 2.79  
71811 TA05322RC 267 324 57 3.09  
71811 TA07062RC 345 430 85 1.23  

Note: Intercepts are +95% of true width.

Selected Greenschist Intercepts included in August 2010 Resource Update

Note: To view "Long Section of Greenschist Zone looking West showing extent of Updated resource and intercepts of deepest hole on section", please click the following link: http://media3.marketwire.com/docs/rbi0907.pdf

Mineralisation remains open. Recent drilling has confirmed a shallow southerly plunge to the Greenschist Zone and current drilling is now targeting this plunge orientation. The long section above shows the distribution of current Resources and highlights the southerly plunge of the Zone. Intercepts shown are the deepest hole on section, demonstrating the potential for further significant resource growth at depth.

Higher grade zones have been identified sitting within the Greenschist mineralised envelope. These intercepts, some of which are shown in the table above, also seem to be controlled by the shallow, southerly plunge of the Zone. The plunge orientation has been confirmed by two deep holes, both approximately 350-400m down dip of the current Resource (650m below surface). Significantly, both holes intersected Greenschist mineralization (TA05005RD 50m at 0.75g/t and TA05007RD 63m grading 0.81g/t.) and establish a plunge control to the higher grade mineralization in the Zone. Ongoing drilling is focusing on this shallower plunge orientation.

There are currently eleven drill rigs on site at Tasiast. The intercepts shown on the long section represent the maximum capability of the reverse circulation rigs on site and so a further ten diamond core rigs are scheduled to arrive by year end to continue the resource expansion and infill program of the Greenschist resource. These additional rigs will also provide capacity for further exploration on strike to the north and south of the existing ore bodies at Tasiast. To date Red Back has only preliminarily tested 10 kilometres of the prolific greenstone belt that hosts the Tasiast mine and the Greenschist Zone.

Commenting on the continued rapid resource growth at Tasiast, Richard P. Clark, President and CEO stated "The Greenschist Zone continues to deliver beyond our original expectations. The recent confirmation of the southerly plunge component of the mineralization and the identification of higher grades within this plunge should allow us to add resource ounces at an even faster pace, particularly with the addition of ten new drill rigs over the coming months. We continue to update the market on a regular basis on the resource growth at Tasiast."

Arrangement with Kinross Gold Corporation

On August 2, 2010, the Company entered into an arrangement agreement with Kinross Gold Corporation ("Kinross"), pursuant to which Kinross has agreed to acquire all of the issued and outstanding common shares of Red Back in exchange for 1.778 Kinross common shares and 0.110 of a Kinross common share purchase warrant. Each warrant will be listed on the TSX and will be exercisable for a four year term at an exercise price of US$21.30 per Kinross common share. The acquisition is being carried out by way of plan of arrangement under the Canada Business Corporations Act. In connection with the arrangement, the Company will hold a meeting of shareholders on September 15, 2010 at 10:00 a.m. (Toronto time) at St. Andrews Hall, 27th Floor, St. Andrews Club & Conference Centre, 150 King Street West, Toronto, Ontario. Shareholders are asked to complete and return their proxies no later than 10:00 a.m. (Toronto time) on September 13, 2010 to Red Back's registrar and transfer agent, Computershare Investor Services Inc., Attention: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, Canada, M5J 2Y1.

After careful consideration, the Red Back Board unanimously determined that the consideration under the arrangement is fair to Red Back shareholders, other than Kinross, and that the arrangement is in the best interests of Red Back. Accordingly, the Red Back Board unanimously recommends that Red Back shareholders vote FOR the Arrangement Resolution. For more information, shareholders are urged to review the management information circular dated August 16, 2010.

About Red Back

Red Back is an un-hedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana and the Tasiast Gold Mine in Mauritania. Aggressive exploration programs aimed at increasing the Company's resource and reserve base at both Chirano and Tasiast are ongoing.

The independent Resource estimate reported herein was undertaken by Nic Johnson (Member of the Australian Institute of Geoscientists) of Hellman and Schofield Pty. Ltd with more than five years experience in the use of geostatistics for estimation of recoverable resources in gold deposits. For the purpose of reporting under National Instrument 43-101 Mr. Johnson is regarded as a Qualified Person.

The technical contents of this release have been reviewed by Hugh Stuart, BSc., MSc, a Qualified Person pursuant to NI-43101. 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 SGS facilities at the Tasiast mine site and at Kayes in Mali 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 SGS laboratories worldwide. 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

FORWARD-LOOKING INFORMATION

This press release contains "forward-looking information" that is based on Red Back's current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect to Red Back's plans, outlook and business strategy. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "plan", "forecast", "project", and "believe" or other similar words and phrases are intended to identify forward-looking information.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Red Back's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to drilling results; uncertainties attributable to the calculation of mineralization, resources and reserves; the ability to raise sufficient capital to fund exploration; changes in economic conditions or financial markets; changes in prices for Red Back's mineral products or increases in input costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labour relations matters. Readers should review the risk factors relating to our business set forth in our Annual Information Form dated March 30, 2010 and the Management Proxy Circular dated August 16, 2010 issued in respect of our meeting of shareholders scheduled for September 15, 2010, both of which are available on Sedar at www.sedar.com.

This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Red Back disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

On behalf of the Board of Directors,

Richard P. Clark, President

Contact Information

  • Red Back Mining Inc.
    Simon Jackson
    Vice President, Corporate Development
    604-689-7842
    or
    Red Back Mining Inc.
    Sophia Shane
    Investor Relations
    604-689-7842
    www.redbackmining.com