Rio Narcea Gold Mines, Ltd.
TSX : RNG
AMEX : RNO

Rio Narcea Gold Mines, Ltd.

July 18, 2005 08:28 ET

Rio Narcea Reports Progress at Aguablanca and Details of Second Sale of Ni-Cu-PGM Concentrate

TORONTO, ONTARIO--(CCNMatthews - July 18, 2005) - Rio Narcea Gold Mines, Ltd. (TSX:RNG)(AMEX:RNO) ("Rio Narcea" or the "Company") is pleased to provide an update of activities at its wholly owned Aguablanca nickel mine in southern Spain.

The Company has made a second sale of nickel-copper-PGM concentrate from Aguablanca. Rio Narcea sold approximately 15,000 tonnes of concentrate averaging 5.92% nickel and 6.03% copper for net proceeds in excess of $9 million. Under the terms of the current off-take agreement, "provisional payment" of 90% of the estimated value of the concentrate has been collected.

The performance of the Aguablanca operation continued to improve during the quarter with a significant increase of metal production due to a combination of increases in tonnage treated and nickel recovery. A summary of the operating results of the quarter is shown below:



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Three Months Ended Three Months Ended
June 30, 2005 March 31, 2005

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Ore milled (tonnes) 285,224 179,445
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Nickel head grade (%) 0.64 0.69
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Copper head grade (%) 0.49 0.57
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Nickel recovery (%) 63.71 58.4
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Copper recovery (%) 92.30 82.1
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Nickel production (tonnes) 1,163 708
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Copper production (tonnes) 1,290 800
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In June, new discharge grates and liners were installed in the SAG mill under the supervision of Fluor Corporation and Outokumpu Oyj. The contractors believe these modifications will eliminate the design problems that were limiting plant throughput. It is too early to judge the final results of these modifications. Nickel recoveries to date in July are now in excess of 70% and copper recoveries continue to be within or in excess of design specifications and are approximately 88%. Fine tuning of the plant is continuing. Performance tests required for completion by Fluor of the turnkey contract have not yet commenced.

Underground ramp development and infill drilling under the planned open pit at Aguablanca are proceeding, achieving excellent progress. The first phase of this underground infill drilling to examine mineralization below the proposed limit of the open pit is expected to be completed before year-end.

Forward-looking Statements: Some statements in this press release contain forward-looking information. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected.

Contact Information

  • Rio Narcea Gold Mines, Ltd.
    John W. W. Hick
    Chief Executive Officer
    (416) 956-7470
    (416) 956-7471 (FAX)
    or
    Rio Narcea Gold Mines, Ltd.
    Steve Dawson
    Manager, Investor Relations
    (416) 956-7470
    (416) 956-7471 (FAX)
    info@rngm.com
    www.rionarcea.com