SOURCE: Romarco Minerals Inc.

February 03, 2009 13:22 ET

Romarco Announces Corrected NPV Numbers

SPARKS, NV--(Marketwire - February 3, 2009) - ROMARCO MINERALS INC. (TSX-V: R) (the "Company") announces revised NPV numbers at 0%. The NPV numbers at 5% are correct; however, it significantly understated the numbers at 0%. The Company apologizes for the error and emphasized that all other information released today is correct. See corrected table below.

Romarco Minerals is pleased to announce that a Bankable Feasibility Study on the Haile Gold Mine project in South Carolina has been completed. Gustavson Associates was the lead consultant engaged by Romarco for this independent study.

It is important to note that the feasibility study is based on drill result data as of October 2008 and capital equipment pricing as of August 2008. All drill results obtained and disclosed since October 2008 (visit website for drilling press releases at www.romarco.com) are not reflected in this study. A new resource update will be available in March 2009 as well as a re-pricing of capital costs given the recent decline in commodity prices and general economic conditions.

In response to the many requests that the Company has received for fundamental economic information and analysis on the Haile Gold Mine, the Company determined that it would be appropriate to release the Feasibility Study today based only on data as of October 2008, notwithstanding that the significant and more recent results and improvements cannot yet be incorporated. A revised feasibility / development plan encompassing this updated information with new economics is expected to be completed by April 2009.

Highlights of the Feasibility Study:

The key findings of the Feasibility Study include the following (all figures are in US Dollars):

--  Net Present Value ("NPV") of $250 million at a gold price of $750 per
    ounce, after tax.  Using a 5% discount rate, the NPV @ $750 gold is $161
    million.
--  Internal Rate of Return ("IRR") of 24%
--  Production of average 128,000 ounces of gold per annum
--  Production of 289,000 ounces of silver per annum
--  Cash operating costs of $262 per ounce
--  Total production costs of $450 per ounce (capital, bonding, taxes,
    DDA)
--  1.3 million ounces of gold in mineral reserves
--  Capital Costs of $153 million
--  The study proposes open pit mining of three pits using in-pit crushing
    / conveying.  The processing facility will be 7,000 tpd with crushing,
    grinding, flotation and conventional CIL (carbon-in-leach) milling and
    refining.
--  Gold recovery 80%
--  Silver recovery 90%
    

Please click on the link below for the table that provides project economics (NPV, IRR) at varying gold price assumptions. All figures are in millions of US Dollars:

http://www.usetdas.com/maps/romarco/romarcotablefeb309correction.pdf

Diane Garrett, President & CEO of Romarco, said, "We are very pleased with the robustness of the Bankable Feasibility Study and look forward to incorporating the recent drilling success into the model and mine plan. Haile continues to exhibit significant upside with the mineralized zone continuing to remain open in three directions (northeast, north, southwest). The capital cost estimate was based on pricing in August 2008 -- near the peak of commodity prices -- and does not reflect, in our opinion, the reductions that may be possible resulting from the recent economic downturn. We have secured additional land adjacent to Haile on which historic drilling demonstrates an extension of the mineralized zone that is currently being drilled.

The Haile Gold Mine has several unique features. First, it is located wholly on private land. Romarco owns the surface, mineral and water rights. Private land, and hence the Haile property, are not subject to the same restrictions as federal/public (BLM or USFS) lands that would be subject to projected modifications of the 1872 Mining Law and possible royalty(s). In addition, the State of South Carolina has primacy over the permits and Romarco has not seen any impediments to the permitting process. The community and local officials have been tremendously supportive of our work. They see considerable opportunity and recognize the substantial and much needed economic benefits that will be generated by the Haile Mine. Romarco currently holds thirteen (13) permits and is in the process of obtaining the remaining ten (10) permits."

The Feasibility Study comments on the permitting status: "On-going discussions with agency personnel over the past year have not revealed any impediments to obtaining the necessary permits to construct, operate and close a new operation at Haile. In addition, regulatory discussions did not reveal any new legislation or regulations that are being contemplated that could have an impact on mine permitting timeframes, schedules or costs."

The Company made application and received approval for a reduction in property tax from 10.4% to 4%. The net result of this tax reduction is a savings of approximately $2 million per year based on the current production scenario.

Garrett further commented, "Our Feasibility Study efforts and operations have been guided by Mr. Ken Brunk, COO of Romarco. Mr. Brunk is a leading metallurgical engineer and mining operator in the industry. Mr. Brunk has a long and distinguished career with Newmont Mining, Bateman and Harrison Western Engineering firms and has been responsible for the construction, operation and production efficiencies of numerous mines around the world. He and his Romarco team deserve considerable credit for having advanced the prospects of the Company in such a short period of time."

The Feasibility Study team also comprised a number of highly qualified, industry-recognized technical groups. Roberts and Schaefer was engaged to provide plant, infrastructure and engineering design while Gustavson Associates provided the mineral resource estimation, mine plan optimization, mining costs, and project economics. The reserve estimation was completed using NI 43-101 standards and operating cost calculations were based on the Gold Institute Standard. Gochnour and Associates is leading the permitting process. RDI provides the metallurgical testwork, Golder Associates provides the geotechnical work. Water Management has provided the hydrology work.

The Company will be filing an NI 43-101 technical report covering the Feasibility Study on SEDAR in the very near future. Please visit the Company's website for the latest powerpoint presentation.

This press release has been reviewed and approved for release by Donald E. Hulse, P.E. and Terre Lane (Member, AusIMM) of Gustavson Associates, Ken Brunk, P.E. (COO for Romarco), and Tom Kilbey, Professional Geologist (Sr. Geologist for Romarco) each being a designated "Qualified Person" under NI 43-101.

Romarco Minerals Inc. is a gold development company focused on production in the US and Mexico. The Company's flagship project is the Haile Gold Mine in South Carolina which is currently undergoing exploration drilling, bankable feasibility study and permitting. The Pinos Gold District in Mexico is a high grade epithermal vein district that is in the advanced exploration stage.

For further information, please contact Diane Garrett, President and C.E.O. at (830) 624-6249 or Shirene Urton, Executive Assistant at (775) 355-1900.

ON BEHALF OF ROMARCO MINERALS INC.

"Diane R. Garrett"
Diane R. Garrett,
President & CEO

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.

Contact Information

  • ROMARCO MINERALS INC.
    997 Greg Street
    Sparks, Nevada
    USA 89431
    Tel: (775) 355-1900
    Fax: (775) 355-1907
    Email Contact