Red Back Mining Inc.
TSX : RBI

Red Back Mining Inc.

August 06, 2009 06:00 ET

Red Back Strong Performance Continues in the Second Quarter

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 6, 2009) - Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to report quarterly net income of $25 million for the three months ended June 30, 2009 ($50 million for the six months ended June 30, 2009). The 2009 interim 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 Second Quarter

- Net income of $24.7 million (year-to-date: $50.0 million)

- Total gold production of 80,238 oz. (year-to-date: 150,645 oz.)

- Average realized gold price of $925 per oz. (year-to-date: $921 per oz.)

- Cash operating costs of $378 per oz. (year-to-date: $383 per oz.)

- Commissioning of sections of the Chirano and Tasiast plant expansions

- First production blast at Akwaaba Deeps

Results of Operations



The table below summarizes the key operating statistics for the quarter and
year-to-date.

---------------------------------------------------------------------------
Three months ended Three months ended
June 30, 2009 June 30, 2008
Chirano Tasiast Total Chirano Tasiast Total
-----------------------------------------------

Ore tonnes mined ('000t) 811 1,180 1,991 697 540 1,237

Ore tonnes milled ('000t) 583 294 877 595 374 969
Average grade (g/t) 2.5 3.3 2.8 1.7 3.0 2.3
Average recovery 90.5% 94.0% 91.7% 91.5% 93.0% 92.1%

Gold produced, CIL (oz) 43,264 33,399 76,663 29,764 34,955 64,719
Gold produced, dump leach
(oz) - 3,574 3,574 - - -
Gold sold (oz) (Note 2) 37,273 37,722 74,995 30,354 36,735 67,089

Cash operating costs per oz
(Note 3)
Operating $ 430 $ 327 $ 378 $ 431 $ 437 $ 434
Royalties $ 31 $ 28 $ 29 $ 38 $ 27 $ 32
Depreciation, amortization
and accretion per oz
(Note 3) $ 111 $ 201 $ 156 $ 103 $ 237 $ 183
-----------------------------------------------
Six months ended Six months ended
June 30, 2009 June 30, 2008
Chirano Tasiast Total Chirano Tasiast Total
-----------------------------------------------

Ore tonnes mined ('000t) 1,638 2,139 3,777 1,542 879 2,421

Ore tonnes milled ('000t) 1,196 645 1,841 1,140 698 1,838
Average grade (g/t) 2.2 3.4 2.6 1.9 3.0 2.4
Average recovery 90.8% 94.1% 91.9% 91.3% 94.0% 92.3%

Gold produced, CIL (oz) 77,522 69,549 147,071 63,695 64,483 128,178
Gold produced, dump leach
(oz) - 3,574 3,574 - - -
Gold sold (oz) (Note 2) 72,820 74,007 146,827 64,365 60,912 125,277

Cash operating costs per oz
(Note 3)
Operating $ 469 $ 299 $ 383 $ 420 $ 417 $ 418
Royalties $ 29 $ 28 $ 28 $ 31 $ 27 $ 29
Depreciation, amortization
and accretion per oz
(Note 3) $ 96 $ 200 $ 148 $ 97 $ 236 $ 165
---------------------------------------------------------------------------
Note 1: Production statistics may not calculate exactly due to rounding.
Note 2: 2009 gold sold at Chirano excludes 4,208 oz (year-to-date: 5,675 oz)
recovered from underground operations and capitalized during pre-
production development.
Note 3: This is a non-GAAP measure. It is calculated by dividing costs on
the statement of income and deficit by gold oz sold. For Tasiast,
approximately $80 per oz (year-to-date: $87 per oz) (2008, quarter
and year-to-date: $139 per oz) of depreciation and amortization are
due to the amortization of the fair value excess on purchase of the
Tasiast mineral properties in 2007.


Tasiast Gold Mine

For the second quarter, Tasiast produced 36,973 oz at a cash operating cost of $327 per oz, in line with expectations. Red Back continues to forecast 2009 production at Tasiast of 230,000 oz at a cash operating cost of $320 per oz. The Company's ability to reach its production target depends in part on the prompt receipt of final permits for the utilization of a new tailings dam and full irrigation of the dump leach operations at Tasiast. The formation of a new government following presidential elections, held on July 18, 2009, should facilitate and expedite the issuance of these operating permits.

Under the plant expansion project, commissioning of the enhanced crushing circuit and second ball mill was completed near the end of the second quarter. The other elements of the expanded plant are expected to be operational before the end of the third quarter of 2009.

Red Back has commenced an aggressive $13 million exploration program over the remainder of the year to (1) fully define additional resources in the area between the Piment and West Branch deposits where drilling has identified a strong mineralized structure over a strike length of 350 metres and to a vertical depth of up to 180 metres, (2) complete infill drilling over the known nine kilometre strike length of the Piment and West Branch structures in order to re-calculate the project reserves and (3) conduct reconnaissance drilling elsewhere on Tasiast's exploration license holding that covers a 60 kilometre strike length of the under-explored Aoueouat greenstone belt.

Chirano Gold Mine

For the second quarter, Chirano produced 43,264 oz at a cash operating cost of $430 per oz. These levels are in line with Company budgets and 2009 production forecasts remain unchanged at 170,000 oz. Chirano is now enjoying reduced power costs and is expected to continue to benefit from reductions in power costs during the second half of the year. This should favourably impact cash operating costs, which are currently forecast at $480 per oz.

Commissioning of the crushing circuit for the expanded plant has now been completed. Commissioning of the ball mill and new CIL tanks is scheduled to occur in the third quarter of 2009. First production blast at the Akwaaba Deeps underground development occurred near the end of the second quarter. Underground mining is expected to ramp up by the fourth quarter of 2009 and reach full scale mining in 2010.

Following the identification of a first underground inferred resource for the Paboase South and Suraw deposits in March 2009, Red Back has confirmed further strong intercepts at depth at Paboase South (News release of July 27, 2009) and is stepping up its drilling program with the objective of delineating the extent of this resource.

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 are well advanced with commissioning underway. Aggressive exploration programs aimed at increasing the Company's resource and reserve base at both Chirano and Tasiast is continuing.

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
    604-689-7842
    or
    Red Back Mining Inc.
    Sophia Shane
    Investor Relations
    604-689-7842
    www.redbackmining.com