Rusoro Mining Limited

Rusoro Mining Limited

August 25, 2009 08:01 ET

Rusoro Mining Reports Record Production of 48,523 Ounces of Gold for Q2 2009 at Record Low Cash Cost of US$322 Per Ounce

Updates Status of Core Projects

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 25, 2009) - Rusoro Mining Ltd. ("Rusoro" or the "Company"), (TSX VENTURE:RML) is pleased to report its financial results for the three- month period ended June 30, 2009 ("Q2 2009"). The Company's Q2 2009 consolidated financial statements and management's discussion and analysis (MD&A) have been filed on SEDAR (

All amounts set out in this news release are unaudited and in United States Dollars unless otherwise stated.

Q2 2009 Highlights

- Cash cost per ounce Au sold a record low of $322 per oz.

- Record production of 48,523 ounces of gold.

- Completed a positive Preliminary Assessment to evaluate the potential for gold production expansion of the Choco Mine operation to a production rate of over 500k oz Au/yr, which will source gold resources and reserves from the Choco Mine and the near-by Increible 6 gold deposit.

- Continued optimization of operations at the Choco Mill with installation of a new kiln and carbon recovery system which has enhanced gold recoveries.

- Drilling at Isidora continues to expand high grade gold zones for future development.

- Advanced construction of the Alvarez underground ramp which will provide access to the main mineralized areas in the contiguous San Rafael and El Placer concessions ("SREP"). Construction is on track towards the goal of intercepting the main mineralized zone in Q1 2010.

- Ended the quarter with $58.7 million in cash, cash equivalents and short-term investments.

Key Operating Statistics for Q2 2009 are as follows:

The data below is for 100% of the Choco Mine (open-pit mining operation) and 50% of the Isidora Mine (underground mining operation).

3 Months Ended June 30, 3 Months Ended June 30,
2009 2008
Choco Isidora Total Choco Isidora Total
Ore tonnes mined ('000 t) 623 8 631 611 n/a 611
Ore tonnes milled ('000 t) 548 11 559 628 n/a 628

Average grade (g/t) 2.38 21.56 2.76 1.39 n/a 1.39
Average recovery rate (%) 93% 90% 93% 87% n/a 87%

Gold produced (ounces) 40,739 7,784 48,523 25,062 n/a 25,062

Gold sold (ounces) 15,348 3,136 18,484 36,343 n/a 36,343

Total mining operating
expenses $(000) 4,468 1,099 5,567 23,848 n/a 23,848
- asset retirement
obligation accretion
$(000) (120) (70) (190) 138 n/a 138
- adjustment to foreign
currency conversion
rate $(000)(1) 451 127 578 - n/a -
Total cash costs $(000)(2) 4,799 1,156 5,955 23,710 n/a 23,710
Total cash costs per ounce
sold $(3) 313 369 322 652 n/a 652
Average spot gold price $ n/a n/a 922 n/a n/a 903
Average realized gold
price $(4) n/a n/a 605(1) n/a n/a 637
Discount to spot gold price n/a n/a 34%(1) n/a n/a 29%

Official exchange rate
(BsF to US Dollar) n/a n/a 2.15 n/a n/a 2.15
Average implicit exchange
rate (BsF to US Dollar) n/a n/a 6.65 n/a n/a 3.51


(1) As described in the Selected Quarterly Information section of the MD&A
revenue in Q2 was negatively impacted by $1.4 million and mining
operating expenses positively impacted by $0.6 million due to a change
in the computation of the foreign currency conversion rate applied to
revenue and mining operating expenses. Excluding the effect in revenue
of the change in method mentioned above, the average realized gold price
for the three months ended June 30, 2009 is $681 and the discount to
average spot gold price is 26%.
(2) Total cash costs used in the calculation of cash costs per ounce is
calculated as mining operating expenses from the consolidated statement
of operations excluding accretion expense related to the asset
retirement obligation and adjustment to foreign currency conversion
(3) Cash costs per ounce sold is a non-GAAP measure. Total cash costs per
ounce sold as shown above is calculated by dividing the total cash costs
by the gold ounces sold during the period. Cash costs per ounce sold
includes all expenditures incurred at the mine site such as mining,
processing, administration, royalties and production taxes but excludes
reclamation, capital and exploration expenditures and adjustment to
foreign currency conversion rate.
(4) Average realized gold price is impacted by a discount to spot price of
gold as indicated in the Venezuelan Exchange Controls and Revenue and by
the timing of gold sales.

Choco Mine Q2

During Q2 2009, the Company's 95%-owned Choco Mine produced 40,739 oz Au and had a cash cost per ounce sold of $313 as compared to 25,062 oz Au and a cash cost of $652 per ounce sold, reported in Q2, 2008. Cash costs were less than forecasted due mainly to lower overall costs and higher-grade (g/t) ore processed, as well as enhanced recoveries due to the installation of a new kiln and carbon recovery system. The Company's guidance for 2009 remains at 135,000 ounces of gold production at the Choco Mine operations, while the cash cost per ounce guidance for 2009 has been reduced to $375 per oz Au from the originally forecast $420 per oz Au due to the aforementioned increase in efficiencies at the mine and mill.

During Q2 2009 the Company completed a positive Preliminary Assessment (PA), completed by Micon International Limited, to evaluate the viability of a major expansion at the Choco Mine and Choco Mine Mill and which will incorporate the nearby Increible 6 gold deposit. The PA is detailed in a report dated June 2, 2009 and titled "Technical Report on the Preliminary Assessment of the Expansion of Production at Choco 10, Bolivar State, Venezuela". The PA outlined favourable economics for a significant expansion from 135,000 oz Au/yr (2009 guidance) to over 500,000 oz Au/yr at cash cost of US$331/oz Au over the life of mine (LOM). Micon International Limited will continue on as the Company's engineering consultants on the project and will be responsible for overseeing the feasibility study through to its completion. The scoping study results were reported in the news release dated May 19, 2009, which is available on SEDAR at

Isidora Mine Q2

During Q2 2009, the Company's 50% owned Isidora Mine produced 7,784 oz Au (net to the Company) and had a cash cost per ounce sold of $369. The Company continues to forecast 70,000 ounces of gold production at Isidora Mine for 2009 (35,000 net to the Company) with an adjusted cash cost guidance of $350 per oz Au, up from the originally forecast $290 per oz Au due to an increase in the payroll costs at the mine site as a result of a new union agreement and increases in social and community costs during the first half of the year.

Rusoro drilled 6,170m in 12 holes in Q1 2009 and the drilling was successful in confirming the continuity along strike and to depth as well as expanding the main structures of the Isidora gold deposit. Results received to date from the drilling completed in Q1/Q2 2009 are reported in the table below.

----------------------------------- -----------------------------------
Hole-ID From To (g/t) (m)(i) Hole-ID From To (g/t) (m)(i)
----------------------------------- -----------------------------------
HCH248 505.55 507.65 4.78 1.54 HCH259 427.76 429.00 1.32 0.99
HCH249 544.70 547.25 9.09 1.93 HCH260 633.00 634.69 3.28 1.39
HCH250 474.82 476.15 7.91 1.09 HCH260 635.38 637.28 3.15 1.57
HCH251 504.25 506.32 3.35 1.68 HCH261 431.56 433.00 5.13 1.27
HCH252 525.30 526.37 2.50 0.84 HCH262 396.97 398.93 11.92 1.01
HCH252 606.00 607.10 2.94 0.79 HCH263 360.64 361.53 17.32 0.71
HCH253 408.02 409.54 16.80 1.20 HCH264 200.58 201.79 16.41 0.86
HCH253 480.54 481.24 15.31 0.52 HCH265 459.00 461.23 1.20 1.21
HCH253 488.12 488.85 3.00 0.54 HCH266 356.84 357.52 10.59 0.49
HCH254 477.22 477.92 3.39 0.56 HCH267 412.77 414.48 10.09 1.37
HCH254 481.66 482.68 3.62 0.83 HCH268 515.95 516.45 1.44 0.39
HCH254 502.29 503.00 4.26 0.52 HCH268 636.21 636.61 4.37 0.31
HCH255A 489.27 490.51 14.40 0.89 HCH269
HCH256 555.00 556.45 6.80 1.16 HCH270 394.74 396.20 3.07 1.11
HCH257 562.99 563.76 55.84 0.62 HCH271 403.56 405.48 5.56 1.57
HCH258 598.39 599.81 4.58 1.18 HCH272 231.20 233.94 10.34 2.68
HCH258 635.60 636.15 3.05 0.47 HCH272 236.75 238.24 7.79 1.46
----------------------------------- -----------------------------------
Note: TW is True Width in metres.

The Company is on schedule with its exploration program at Isidora Mine designed to expand existing resources to support future gold production with 6,229 meters of drilling (12 holes) completed during Q2 2009, bringing the total in 2009 to over 12,000m.

Diamond drilling was conducted by Versacore and Perforaciones Tecnodrill of Puerto Ordaz, Venezuela. All drilling and drill sampling have been completed using industry standard practices. All drill core is described in detail and photographed and one-half of the core remains for inspection and reference.

Sample analyses have been conducted at SGS labs, Actlabs and Triad Labs located in El Dorado, Tumeremo and El Callao, Venezuela. All sample analyses were completed using industry standard fire assay practices. A detailed program of quality assurance / quality control (QA/QC) includes standard samples, blanks and duplicate check samples which are randomly inserted into the sample stream. Additionally check assays are completed on pulps and sample rejects at the primary lab as well as on duplicate pulps at a second lab. A review of the QA/QC results shows no significant bias and all results are considered highly reliable. Sample rejects for all drill samples are stored in Rusoro's secure facilities in Tumeremo, Venezuela, and will continue to be available for any further testing which may be required. All QA/QC is completed under the direction of G.F. Smith, P.Geo.

San Rafael/El Placer (SREP) Development Project Q2

During Q2 2009 great strides were made at the SREP with the initiation of a pre-feasibility study and in the advancement of the Alverez Ramp to within 700m of the main mineralized zones at the project. The Pre-feasibility study was awarded to Whillans Mine Studies Ltd. The engineering consulting firm has previously advised the company concerning the development of the Alvarez Ramp which is currently under construction to access the main mineralized zones at SREP. Based on the amount of data already compiled and the engineers intimate and ongoing knowledge of the project the Company expects that the study can be completed in early 2010. The SREP Project currently has National Instrument 43-101 ("NI 43-101") compliant resources of 399,000 oz Au indicated (639,000t @ 19.41g/t) and 523,500 oz Au Inferred (703,000t @ 23.16g/t) as detailed in a report titled "Technical Report on the San Rafael-El Placer and Days Vein Deposits, Bolivar State, Venezuela" dated October 2, 2008.

Qualified Person: Mr. Gregory Smith, P.Geo, the Vice-President, Exploration of the Company, is the Qualified Person as defined by National Instrument 43-101, and is responsible for the accuracy of the technical and scientific information within this news release.


George Salamis, President

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

"The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release."

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