MONTREAL, QUEBEC--(Marketwire - Nov. 12, 2012) - MDN Inc. ("MDN") (TSX:MDN) is pleased to report its financial results for the third quarter ended September 30, 2012. The management discussion and analysis and interim financial statements will be posted on the Company's website (www.mdn-mines.com) and on SEDAR (www.sedar.com).
The Company incurred a net loss of $1,012,463 or $0.01 per share attributable to Owners of the Company for the third quarter compared to a net income of $1,983,794 or $0.02 per share for the same period in 2011. The net loss included the write-off of the McGold property asset ($791,727); the Company decided not to continue exploring the McGold property, located in Quebec, as the last drilling program on the property did not meet its objectives. The Company had $6.0 million in working capital as September 30, 2012.
SUMMARY OF FINANCIAL RESULTS
(Thousands of dollars, except per share amounts)
|For the periods ended September 30
||9 months 2012
||9 months 2011
|Total revenue net of finance expense
|Net income (loss) attributable to owners of the Company
|Basic net income (loss) per share
|Number of shares outstanding (thousands)
Third quarter gold production totalled 10,773 ounces compared to 20,160 ounces in the same quarter of 2011. Direct operating costs for the quarter amounted to US $1,309 per ounce sold, compared to US $749 for the same period last year. The increase was primarily due to the fact that production costs were spread over fewer ounces produced, and to an increase in the consumption of drilling supplies, explosives and ground support for underground development.
Capital expenditures for the quarter totalled US $7.6 million compared to US $8.1 million for the same period last year. Capital expenditures were mainly incurred for underground development (US $1.8 million), exploration drilling (US $1.1 million) and capital invested to support extension of the mine life (US $4.7 million).
African Barrick Gold continued to test the possibility of extending the mine life beyond the first half of 2013. To achieve this objective, development of the second mine access portal continued throughout the quarter. Access ramp development is taking place from the lower level in the direction of the portal. This second underground mine access will help improve gold production and facilitate mine access for the development of future drilling bases. (Ref: press release dated October 26, 2012)
Exploration in Tanzania
At the Nikonga property, a second drilling program totalling 1,213 metres was completed on July 30, 2012. The goal was to test the continuity and extensions of the two gold-bearing structures identified on the property in the first half of 2012. The best results were 9.88 g/t Au over 4.2 m and 1.73 g/t Au over 12.35 m, which confirmed the continuity of the gold-bearing structures and thus the significance of MDN's discovery on this property. (Ref: press release dated August 23, 2012)
MDN acquired mineral rights to the east of its Ikungu property in Tanzania in 2011. The Company owns 100% of the new property, which covers an area of 133.33 km2.
A geological reconnaissance survey over the entire property confirmed the presence of the volcanic rocks hosting the Ikungu mineralized zone and their extension towards the east.
An initial ground magnetic survey on lines spaced at 200 metres and an initial geochemical soil reconnaissance survey on lines spaced at 800 metres confirmed the presence of the volcanic belt over a 15-kilometre strike length. Four zones with highly anomalous gold values (25 ppb to 1,500 ppb Au) were traced over strike lengths of 1.5 to 3.0 km. Such gold soil values are considered significant anomalies when compared to historical soil sample results from mines now in production in Tanzania. The identification of this new, as-yet undiscovered volcanic belt resulted from the work done by MDN. (Ref: press release dated October 2, 2012)
Detailed geophysical and geochemical work is currently underway to identify initial drill targets for this property.
Crevier Project Development
Work on the Crevier feasibility study continued throughout the third quarter. Third quarter expenses totaled $350,430, with efforts focused on metallurgical process development.
MDN extracted 100 tonnes of ore from the Crevier property in August by blasting on surface. The sample was then crushed and trucked to COREM, a mineral research consortium in Quebec City. COREM was selected to prepare and execute the next pilot plant program.
The pilot plant program began in September with laboratory work that allowed the Company to define the recovery and concentration parameters it can expect to achieve. The targets are: 65% recovery accompanied by niobium-tantalum concentration in the order of 30%. Pilot plant testing has been completed during the last week of October and the first week of November and will allow the results from preliminary testing to be consolidated.
Search for a Strategic Partner
MDN is still in search of a strategic partner to support the next stages of the Crevier project development.
The technical and scientific information in this press release was reviewed by Marc Boisvert, engineering geologist, Vice President, Exploration, and a qualified person as defined by National Instrument 43-101.
MDN Inc. (TSX:MDN) is a mining exploration and development company with properties in Quebec and Tanzania. In Tanzania, MDN has a 30% working interest in the Tulawaka gold mine, which produced over 84,000 ounces of gold in 2011, as well as two promising gold exploration projects: Ikungu and Nikonga. In Quebec, MDN holds a 72.5% interest in Crevier Minerals Inc., which owns an NI 43-101 niobium-tantalum resource that is presently undergoing a feasibility study.
Forward-Looking Statements. Other than statements of historical fact, all statements in this release that address events or developments that the Company expects to occur are forward-looking statements. Although the Company believes that the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements are discussed in greater detail in the Company's most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. Investors and others who base themselves on the Company's forward-looking statements should carefully consider the factors mentioned in the Annual Information Form, as well as the uncertainties they represent and the risk they entail. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct, and as such, the forward-looking statements in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.
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