Simberi Mining Corporation
TSX VENTURE : SAU

Simberi Mining Corporation

October 12, 2006 17:41 ET

Simberi Completes 43-101 Technical Report on Kakanda Project

TORONTO, ONTARIO--(CCNMatthews - Oct. 12, 2006) - Simberi Mining Corporation ("Simberi") (TSX VENTURE:SAU) is pleased to announce that an independent technical and preliminary economic analysis report dated September 15, 2006 and prepared in compliance with National Instrument 43-101 ("NI 43-101") has been completed by MPH Consulting Limited ("MPH") of Toronto, Ontario for Simberi's Kakanda Copper/Cobalt project (the "Kakanda Project") in the Democratic Republic of Congo ("DRC"). The resource estimate contained in the report for both the tailings and the open pit resources has been prepared in accordance with NI 43-101. The report incorporates and updates information presented in a full Feasibility Study completed by Bateman Minerals and Industrial Ltd. and associates ("BMI") in 1997.

Simberi is the operator and presently owns a 51% interest in the Kakanda Project and will receive 92.5% of the revenues from the project until its capital costs are recovered. Gecamines, the DRC State owned mining company, is Simberi's 49% joint venture partner in the Kakanda Project.

The report confirms an Indicated tailings resource of 18.4 million tonnes grading 1.22% copper and 0.15% cobalt. The tailings were sampled in 1997 in conjunction with the BMI study utilizing 106 auger bore holes, 7 test pits and 4 sand replacement bulk density tests. A total of 720 assays for total copper and total cobalt are included in the database. The Kakanda resource model was constructed using Ordinary Kriging methodology and GEMCOM software.

In addition the hard rock open pit resources previously classified by BMI as a Measured resource are now classified, as an Inferred resource of 11.3 million tonnes grading 3.25% copper and 0.20% cobalt. This estimation is based on a total 95 diamond drill holes completed by Gecamines prior to 1997. The grade estimation was completed from a block model and a Whittle open pit optimization program.



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Resources Contained Copper Contained Cobalt
(million lbs) (million lbs)
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Tailings (Indicated) 494.7 60.8
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Hard Rock (Inferred) 809.4 49.8
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Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council November, 2004.

The BMI 1997 feasibility study was completed to proper detailed engineering standards acceptable for financing purposes. The project proposed a solvent extraction electro-winning process plant designed for an annual production capacity of 3,500 tonnes cobalt cathode and 32,000 tonnes copper cathode. The study included production from the tailings and from the Kakanda south pit and included the capital that would be expended in years 5 and 6 to develop the open pit.

The financial projections in the BMI study were based on the capital and operating costs prevailing at the time and metal prices of U$ 1.00/lb copper and US$ 8.00/lb cobalt. MPH has reevaluated the project economics using operating costs at 2006 values and metal prices that reflect the current market at a scoping study level of confidence. In its projections MPH has excluded the open pit resources and has structured the project to process 2.8 million tonnes of tailings per year with a seven year operating life. All figures below are in US dollars.



Parameters for Financial Projections:

------------------------------------------------------------------------
Indicated Tailings Resources
(tonnes) 18.4 million tonnes
------------------------------------------------------------------------
Inferred Hard Rock Resources 11.3 million tonnes (not included
in the model)
------------------------------------------------------------------------
Tailings Grade 1.22% Cu. 0.15% Co
------------------------------------------------------------------------
Hard Rock Grade 3.25% Cu 0.20% Co
------------------------------------------------------------------------
Mine Life (tailings only) 7.25 years
------------------------------------------------------------------------
Copper Produced 32,000 t annually
------------------------------------------------------------------------
Cobalt Produced 3,500 t annually
------------------------------------------------------------------------
Design Capacity Tailings 8,500 tonnes per day (2,850,000 t/yr)
------------------------------------------------------------------------
Capital cost $348 million
------------------------------------------------------------------------
Cash Operating Cost (Tailings) $27.80/t
------------------------------------------------------------------------
Process Recovery 92% Cu 82% Co
------------------------------------------------------------------------
Copper Price $1.75/lb
------------------------------------------------------------------------
Cobalt Price $13.00/lb
------------------------------------------------------------------------

Financial Projections:

------------------------------------------------------------------------
Gross Revenues $1.4 billion
------------------------------------------------------------------------
Net Project Revenues $948 million
------------------------------------------------------------------------
Cash flow for Simberi 51% $642 million
------------------------------------------------------------------------
NPV @ 20% discount $116.3 million
------------------------------------------------------------------------
NPV @ 10% discount $272.8 million
------------------------------------------------------------------------
IRR 37%
------------------------------------------------------------------------
Payback 2.25 years
------------------------------------------------------------------------


In conclusion MPH proposed a development plan that:

- Returns the Kakanda tailings project to full feasibility study status by upgrading the measured + indicated resources to include tailings deposited since the 1997 BMI feasibility study and by the application of current revenue/cost factors to the previous study parameters.

- Upgrades the pit resources to measured + indicated status, and complete all relevant investigations required to determine the economic viability of the bedrock resources to at least pre-feasibility study level.

- Investigate the various options and strategies for developing efficient mining/processing operations with the combined tailings and bedrock resources.

MPH has proposed a budget of US$ 4.0 million to complete its recommended work program.

About Simberi:

Simberi is a junior resource company focused on the exploration and acquisition of developed low cost precious and base metal projects internationally. The company's main exploration project is the Kakanda Project located in the Democratic Republic of the Congo. The company is now planning the next stage for the development of the Kakanda Project. Simberi is also involved in several joint venture projects in Western Australia.

Howard Coates P. Geol. is a qualified person as identified by NI 43-101, and has reviewed and verified the technical content of this press release.

On behalf of the Board of Directors

"Michael Newbury"

MICHAEL NEWBURY

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are Canadian dollars unless otherwise noted.

Neither the TSX Venture Exchange, nor any other securities regulatory authority has approved or disapproved of the contents of this news release.

Contact Information

  • Simberi Mining Corporation
    Mike Newbury
    President and CEO
    (416) 603-7200
    (416) 603-9200 (FAX)
    Email: info@simberimining.com