Redcorp Ventures Ltd.
TSX : RDV

Redcorp Ventures Ltd.

February 17, 2009 17:05 ET

Redcorp Ventures Ltd.: Tulsequah Chief Mine Project Development Suspension Continues

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 17, 2009) - Redcorp Ventures Ltd. (TSX:RDV) ("Redcorp" or the "Company") and its wholly-owned subsidiary, Redfern Resources Ltd. ("Redfern"), today announce that construction activities at the Tulsequah Chief Mine will remain suspended until further notice because of uncertainty related to the costs required to complete the development of the project. On December 2, 2008, Redfern and Redcorp announced the appointment of Global Project Management Corporation ("GPMC") to head the Tulsequah Chief Mine project development. As part of its mandate GPMC initiated a Project Execution Plan to, among other things, review and update capital expenditure and schedule estimates. GPMC has concluded that the estimated costs to complete the construction of the Tulsequah Chief Mine are significantly higher and the construction period will be longer than estimated by Wardrop Engineering Inc. ("Wardrop") in 2008.

In June 2008, Wardrop prepared an updated pre-production capital cost estimate for the Tulsequah Chief Mine development of a total gross cost of $332.0 million (total net costs of $297.1 million after deducting anticipated capital leasing credits of $34.9 million). A contingency of $16.9 million was included as part of total costs.

GPMC's review of Wardrop's previous estimate has extended the completion date of the mine to August 2010 and forecasts that total gross capital costs could exceed $500 million. An independent third party review of GPMC's assessment indicates potential savings could reduce this amount to approximately $430 million (including anticipated capital leasing credits of $35 million) on the assumption certain efficiencies can be achieved. As of December 31, 2008 estimated expenditures of $170.8 have been recorded, before capitalized interest. These expenditures have been used to: establish a connected network of 15 kilometers of roads at the mine site; construct an airstrip and temporary camp infrastructure; and also to purchase key long lead-time equipment including diesel power generating plant, rod, regrind and ball mills, river tugs and tow vehicles.

The lengthening of the development schedule, increased capital costs, current commodity prices and the limitations on the Company's ability to access sources of additional funding raise serious concerns about the development of the Tulsequah Chief Mine by the Company without strategic partners. As a result, Redcorp is proposing to engage in discussions with its funding partners to evaluate strategic opportunities, including alternative development strategies.

Redcorp is a Vancouver based mineral exploration and development company with active projects in British Columbia, Canada and Portugal. Further information on Redcorp and the Tulsequah Project can be obtained on our website at www.redcorp-ventures.com and at Redfern's website at www.redfern.bc.ca or by calling toll-free to Troy Winsor, Manager of Investor Relations or Salina Landstad, Manager of Public Relations at the contact numbers listed below.

ON BEHALF OF THE BOARD OF DIRECTORS OF REDCORP VENTURES LTD.

Terence Chandler, President and CEO

Certain of the statements made and information contained herein may contain "forward-looking information" within the meaning of the British Columbia Securities Act, Alberta Securities Act and Ontario Securities Act or "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 of the United States, including, without limitation, statements concerning the Company's plans at its Tulsequah Project and other mineral properties and the Company's revised economic evaluation of the Tulsequah Project, which involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control which may cause the actual results, performance or achievements of the Company, or industry results and/or consensus metal prices, to be materially different from any future results, metal prices, performance or achievements expressed or implied by such forward-looking information or forward-looking statements.
Forward-looking information and forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information or forward-looking statements, including, without limitation, material factors and assumptions relating to, and risks and uncertainties associated with, risks relating to the availability of financing for activities when required and on acceptable terms, risks relating to the inability to achieve the conditions required to receive full funding contemplated by its gold sale agreement or the MRI contingency loan, risks related to the ability to secure capital leasing arrangements for the purchase of mining equipment on suitable terms, if at all, the ultimate recovery of the Company's investment in new long-term ABCP that were issued on January 21, 2009, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, metal price fluctuations, the achievement and maintenance of planned production rates, the accuracy of component costs of capital and operating cost estimates, current and future environmental and regulatory requirements, favourable governmental relations, the availability of permits and the timeliness of the permitting process, the availability of shipping services, the availability of specialized vehicles and similar equipment, costs of remediation and mitigation, maintenance of title to the Company's mineral properties, industrial accidents, equipment breakdowns, contractor's costs, remote site transportation costs, materials costs for remediation, labour disputes, the potential for delays in exploration or development activities, timely completion of future NI 43-101 compliant reports, timely completion of future feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, continuing global demand for base metals, the fact that the 2007 Feasibility Study is based upon probable mineral reserves and not proven mineral reserves, expectations and beliefs of management and other risks and uncertainties, including those described under "Risk Factors" in the Annual Information Form of the Company filed on SEDAR on March 31, 2008, and in each subsequent management's discussion and analysis.
Forward-looking information and forward-looking statements for time periods subsequent to 2008 involve longer term assumptions and estimates than forward-looking information and forward-looking statements for 2008 and are consequently subject to greater uncertainty. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information or forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information or forward-looking statements. When used herein, the words "anticipate", "believe", "estimate" and "expect" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking information or forward-looking statements relating to the business and affairs of the Company. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise.

News Release 09-03

Contact Information

  • Redcorp Ventures Ltd.
    Troy Winsor
    Manager, Investor Relations
    (604) 466-8934 / 1-888-225-9662
    or
    Redcorp Ventures Ltd.
    Salina Landstad
    Manager, Public Relations & Corporate Communications
    (604) 639-0135 / 1-888-669-4775 ext. 103
    Website: www.redcorp-ventures.com