URSA Major Minerals Incorporated
TSX : UMJ

URSA Major Minerals Incorporated

December 13, 2010 12:38 ET

URSA Major Minerals Reports Operational Profit at Shakespeare Nickel-Copper Mine and Achieves Net Income of $548,202 for the Quarter Ended October 31, 2010

TORONTO, ONTARIO--(Marketwire - Dec. 13, 2010) -

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URSA Major Minerals Incorporated ("URSA Major" or the "Company") (TSX:UMJ) announces its financial and operating results for the three and nine months ended October 31, 2010. The Company is pleased to announce that the Shakespeare Nickel-Copper Mine, located 70 km west of Sudbury, Ontario, produced over 66,700 tonnes of ore and achieved a net income of $548,202 for the quarter.

Financial and Operating Highlights for the Quarter
  • For the three months ended October 31, 2010, the Company recorded gross revenue of $7,271,623 on the sale of metals from the Shakespeare Mine.

  • The Company reported an operating profit of $1,175,164 for the three months ended October 31, 2010. The Company's net income for the quarter was $548,202 and cash flow from operations was $256,226.

  • The quarter ended October 31, 2010, was the second quarter of commercial production at the Company's Shakespeare Nickel Mine, located 70 km west of Sudbury, Ontario. Prior to June 2010, the mine was in the pre-production mining stage.

  • During the quarter, the Company delivered 66,769 tonnes of ore to Xstrata Nickel's Strathcona Mill for processing. The mine was in production for three months of the quarter and this was the first complete quarter of commercial production.

  • Contained metals in the delivered ore for the three months ended October 31, 2010, totalled approximately 558,014 pounds of nickel, 623,857 pounds of copper, 38,951 pounds of cobalt and 2,298 ounces of precious metals. The recovered and contained metals are subject to smelter recoveries and to further smelter deductions.

  • For the quarter, the ore averaged 0.382% nickel, 0.427% copper, 0.027% cobalt, and 1.079 gram/tonne precious metals. This is 97% of the average budgeted grade for 2010 that is based on the previous bulk sample and pre-production mined grades of 0.39% nickel, 0.44% copper, 0.03% cobalt and 1.1 gram/tonne precious metals.

  • The Shakespeare Mine is operating near the Company's budgeted forecasts. Production costs for the quarter ended October 31 were $34.60 per tonne as compared to forecasted costs for 2010 of $33.20 per tonne of ore.

  • During the quarter, the Company initiated a 2,582 meter exploration drilling program at the Nickel Offsets Property and announced an intersection of 2.89 meters of nickel-rich massive sulphides grading 2.90% nickel, 0.97% copper, 0.16% cobalt, 0.94 g/t platinum, 1.28 g/t palladium, and 0.11 g/t gold. The same hole intersected an additional 2.0 meters of precious metal mineralization grading 3.04 g/t platinum, 2.00 g/t palladium, 0.82 g/t gold, with 0.07% nickel and 0.37% copper in disseminated sulphides in the footwall of the nickel-rich massive sulphide. The Company is currently following up the drilling program with borehole EM surveys.

  • During the quarter, the Company initiated an airborne magnetic and time domain electromagnetic survey of the Disraeli Lake areas north of Thunder Bay, Ontario. Results are anticipated prior to the fiscal year-end on January 31, 2011.

  • Subsequent to the quarter, the Company initiated a 1,600 meter drill program at the Shakespeare Nickel Mine, targeting the eastern extension of the Shakespeare deposit. The drill holes will test for nickel-copper-platinum group metals mineralization up to 400 metres east of, and down-plunge from, the previous sulphide mineralized drill intersections reported in 2008.

  • During the quarter, the Company appointed Mr. Jean-Pierre Colin to the board of directors, Eric Loch as Vice President Mine Operations and Projects, Vic Hugo as Financial Controller and Interim CFO, and Douglas Bache was engaged as Executive Advisor-Corporate Development. Subsequent to the quarter, the Company appointed Alison Tullis as Investor Relations Manager.

The quarterly financial statements and related Management Discussion and Analysis have been filed on SEDAR (www.sedar.com). Additionally these documents are available on URSA Major's website at www.ursamajorminerals.com. All amounts are in Canadian dollars unless otherwise indicated.

Richard Sutcliffe, URSA Major's CEO commented, "We are extremely pleased to have reported a profitable quarter for the first full three month period of commercial production at the Shakespeare Nickel Mine. The quick achievement of profitability is a result of the hard work of our operations and head office teams. We are particularly pleased to be in the position of funding part of our exploration through our operating cash flow. We have completed a 2,500 meter drilling program at Nickel Offsets with very encouraging results and our now drill testing the down dip extension of the Shakespeare deposit with the intent of expanding the current resources below the Shakespeare east deposit. Our objective is to build URSA Major through a combination of successful exploration, expanding production, and project acquisition."

Outlook

To January 31, 2011, the end of the Company's fiscal year, URSA Major anticipates the production and delivery of approximately 200,000 tonnes of ore from the Shakespeare Mine.

Production costs for the remainder of fiscal year are forecast to be consistent with the cost of CDN$34.60/ tonne of ore reported for the third quarter. The Company also anticipates that ore grades for the remainder of the fiscal year will remain consistent with the third quarter results. The company is in the process of developing a mining plan and budget for 2011.

The Company's revenues are derived from base and precious metals and the Company receives prices for the metals that are determined by global market conditions. The Company anticipates that demand for base and precious metals will likely remain robust for the first half of 2011. Nickel in particular is a very volatile in price and to reduce revenue risks associated with nickel price volatility, the Company has in the past purchased put-options to ensure a minimum price of a major component of the Company's nickel revenue. Currently, the Company has put options with a strike price of $19,850/tonne for 18 tonnes of nickel for December 2010. The Company will review its option strategy in conjunction with the 2011 budget.

In the three months ended October 31, 2010, the Company began using a portion of its cash flow from mining operations to fund part of its exploration program. The Company intends to continue this strategy in 2011. The Company is also evaluating options to accelerate and expand the drilling campaign. In addition, and in accordance with the Company's strategic plan, management is evaluating further opportunities for property acquisition, particularly for copper, nickel and PGM-rich deposits.

URSA Major is awaiting the final results from a 2,580 meter diamond drilling and borehole EM program at the Nickel Offsets Option. The Company is encouraged by initial results from the 2010 program and anticipates that it will continue to drill targets on this property in the first half of 2011. The Company has initiated a two hole, 1,600 meter program, targeting the eastern extension of the Shakespeare deposit. The drill holes will test for nickel-copper-platinum group metals mineralization up to 400 metres east of, and down-plunge from, the previous sulphide mineralized drill intersections reported in 2008. Initial results from this exploration will be reported during first quarter of 2011. URSA Major has also recently completed an airborne magnetic and time domain electromagnetic survey of the Disraeli lake area, north of Thunder Bay, Ontario and anticipates results prior to year end. This property is interpreted to be a similar geological environment to Magma Metals' property that contains the Current Lake platinum group metal discovery.

The Company has completed a full positive feasibility study at Shakespeare that evaluated an open pit mine and 4,500 tpd on site concentrator. The execution of this project remains a baseline strategy for the Company and it continues to be evaluated at the management and board levels.

About URSA Major Minerals - URSA Major is a Canadian mining company with two nickel sulphide projects containing significant NI43-101 compliant nickel and copper reserves and resources. The Company is focused on demonstrating profitable operations at the Shakespeare Mine and growing its nickel, copper and platinum group metal (PGM) deposits through exploration and development, primarily in Ontario, Canada.

Address:   8 King Street East, Suite #1300, Toronto, Ontario, Canada M5C 1B5
     
Symbol & Exchange:   UMJ – TSX

This release was prepared by management of the Company who takes full responsibility for its contents.

Some statements contained in this release are forward-looking and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Such forward-looking statements include comments regarding mining and milling operations, mineral resource statements and exploration program performance. Factors that could cause actual results to differ materially include metal price volatility, economic and political events affecting metal supply and demand, fluctuations in mineralization grade, geological, technical, mining or processing problems, exploration programs and future results of exploration programs, future profitability and production. 

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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