Red Back Mining Inc.
TSX : RBI

Red Back Mining Inc.

April 04, 2007 10:20 ET

Red Back Signs Option Agreement to Acquire Tasiast Gold Mine in Mauritania

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 4, 2007) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to announce that it has signed an Option agreement with Lundin Mining Corporation (TSX:LUN)(AMEX:LMC)(SSE:LUMI) ("Lundin Mining") to acquire a 100% interest in the Tasiast gold project in Mauritania, West Africa and significant exploration acreage in Mauritania, in consideration for US $225 million in cash and assumption of US $42.5 million in debt related to the Tasiast project.

The Option is subject to Lundin Mining acquiring 50.1% of the issued and outstanding shares of Rio Narcea Gold Mines, Ltd. (TSX:RNG) ("Rio Narcea") on a non-diluted basis and Red Back obtaining adequate financing to exercise the Option. Lundin Mining and Rio Narcea have announced that Lundin Mining had agreed to make a take-over bid to acquire all of the issued and outstanding shares of Rio Narcea.

Rio Narcea holds, among other assets, a 100% interest in the Tasiast gold project which includes the Tasiast gold deposit under development as an open pit mine and exploration licenses encompassing 13,178 square kilometres.

Construction of the Tasiast gold mine is at an advanced stage with production start-up scheduled for mid 2007 at an initial rate of 108,000 ounces per year at an average grade of 3.25 g/t.

Resources and Reserves at Tasiast are set out below:



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Tasiast Gold Project - Mineral Reserves and Resources
(0.8 g/t gold cutoff)
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Category Tonnes Grade Contained Gold
(000) (g/t) (ounces)
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Mineral Reserves
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Proven 761 3.24 80,000
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Probable 11,223 2.66 960,000
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Total Proven and Probable 11,984 2.70 1,040,000
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Mineral Resources
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Measured 860 3.17 88,000
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Indicated 13,693 2.59 1,142,000
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Total Measured and
Indicated Resources 14,553 2.63 1,230,000
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Inferred Resources 18,633 1.94 1,165,000
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Mineral resources include mineral reserves


These estimates were prepared under the supervision of David A. Orava, M. Eng., P. Eng., Associate Mining Engineer and Daniel C. Leroux, B. Sc., P. Geo., both of A.C.A. Howe International, who are Qualified Persons independent of Rio Narcea and the Company for the purposes of National Instrument 43-101.

The Tasiast deposit is within an extensive gold system that is largely under-explored. The deposit is open along strike and at depth. Tasiast will be the first mine in the highly prospective Archaen age Aoueouat greenstone belt, a 70 kilometre long by 15 kilometre wide north-south trending Archaen greenstone belt geologically similar to other Archaen greenstone belts in the world, which are known to host major gold deposits. The Tasiast property covers a 60 kilometre strike length of the Aoueouat greenstone belt, virtually encompassing an entire mining district in the country.

Rick Clark, President and CEO of Red Back, commented, "The Option to acquire Tasiast is the first step in our strategy to grow Red Back into an intermediate African gold producer. We are excited about expanding our operations into Mauritania and maximizing the potential of the Tasiast project. Our experience in developing and operating the Chirano Project in Ghana demonstrates our ability to operate and succeed in West Africa. The acquisition of Tasiast and the high grade development potential at Chirano support a compelling growth story for the Company, which we intend to develop fully."

Red Back currently operates the Chirano Gold Project in Ghana which has expected production in 2007 of 137,000 ounces at a cash operating cost of approximately US $320 per ounce. A scoping study on an underground development of the high grade Akwaaba deposit is expected to be completed in May, 2007.

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. 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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