The first exportation and upcoming sale of gold is a significant milestone for the Company, particularly in a time when gold prices are near an all time high. The processing plant at Zaruma is fully operational, and with the tonnage of material being mined increasing each month we expect to be cash flow positive for the remainder of the year.
Vancouver, BC (PRWEB) August 24, 2010
Dynasty Metals & Mining Inc. (TSX: DMM, "Dynasty" or the "Company") is pleased to announce that it has delivered its first shipment of gold dore, containing approximately 2,400 troy ounces ("ounces") of fine gold, with an approximate value of US$3 million, produced from its Zaruma Gold Project in Ecuador to a refinery in Canada. Subsequent to the sale of this gold, the Company will have approximately US$9 million in cash in its treasury.
To date, the Company has processed approximately 5,300 ounces of gold at its plant in Zaruma, including the 2,400 ounces delivered to the refinery. Of the remaining 2,900 ounces, 1,400 ounces will be extracted in due course and 1,500 ounces will remain as work in progress contained in the carbon stripping section of the plant. In addition, the Company has processed in excess of 19,000 ounces of silver, which it expects to sell locally.
Robert Washer, President and CEO of Dynasty commented, "The first exportation and upcoming sale of gold is a significant milestone for the Company, particularly in a time when gold prices are near an all time high. The processing plant at Zaruma is fully operational, and with the tonnage of material being mined increasing each month we expect to be cash flow positive for the remainder of the year."
Zaruma Mining Operations
The Company continues to develop its three declines, "Cabo de Hornos", "Barbasco" and "Ayampamba", with in excess of 250 employees working in shifts to advance the declines and develop the resource 24 hours a day. To date, the Company has developed over 3.5 kilometres of tunnels to vertical depths ranging from 100 to over 250 metres, depending on the decline.
Mining of the resource at the main decline, "Cabo de Hornos" has commenced. Recently the combination of the resource together with the other lower grade development material mined has resulted in the delivery of approximately 250 tonnes per day at an average head grade of 6.4 grams per tonne ("g/t") gold to the mill. As the Company continues to develop this resource it is expected the tonnage of material mined will continue to increase.
The Company has now reached the resource at "Barbasco" and is on track to reach the resource at "Ayampamba" later in the third quarter. The Company expects to have sufficiently developed and commenced mining these resources to begin its delivery to the plant in the fourth quarter.
While the Company continues to see improvement with its overall mine development and operations activities, progress has been much slower than expected over the last six months. In addition to the Company having to address the previously reported mining start-up challenges, the Company's inability to secure a timely exploitation contract with the Ecuadorian Government and the time it has taken for the transition to the regulations of the new Mining Law caused management to defer making certain capital investment decisions, which directly impacted mine development progress.
After positive meetings with the new Minister of Non-Renewable Natural Resources during the last quarter, the Company hired 30 additional local employees to work at the mines, purchased a significant amount of additional mining equipment, continued to train local workers for skilled positions and hired additional experienced Australian mine managers to facilitate increased future production and the overall efficiency of its mining operations. The Company currently expects that sometime within the first quarter of 2011, it will be mining and delivering to the Zaruma plant 800 tonnes of material per day, or the approximate annual equivalent of 300,000 tonnes of material.
Zaruma Processing Plant
The processing plant is fully commissioned with gold recovery averaging 90% to date. To maximize the recovery of silver, the Company has commenced the construction of a floatation system which is scheduled to be operational in the fourth quarter of this year.
The Company continues to have constructive dialogue with Mr. Wilson Pastor, the Ecuadorian Minister of Non-Renewable Natural Resources, and his Ministry with respect to formulating an exploitation contract which will set out the specific terms for mining operations, including the royalty payable to the State on the sale of the metals. Throughout this dialogue, the Company has kept the Ministry apprised of the status of its operations and its future plans and the Ministry, in turn, has assigned a person to assist the Company and report back to the Ministry on the Company's progress. The Company would like to thank the Ministries for their ongoing assistance and cooperation.
President & Chief Executive Officer
About Dynasty Metals & Mining
Dynasty Metals & Mining Inc. is a Canadian based mining company involved in the exploration and development of mineral properties in Ecuador.
The Company has the in-production Zaruma Gold Project, the advanced-stage Jerusalem Project, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the advanced-stage Dynasty Goldfield.
For further information please visit the Company's website at http://www.dynastymining.com or please contact:
Dynasty Metals & Mining Inc.
Tel: (604) 687-0888
Brisco Capital Partners Corp.
Tel: (403) 262-9888
This news release includes "forward-looking information", as such term is defined in applicable securities laws. Users of forward-looking information are cautioned that actual results may vary from forward-looking information contained herein. The forward-looking information includes, without limitation, the amount of money the Company anticipates that it will receive from the sale of gold delivered to the refinery; the Company's plans to sell the silver it has processed; the Company's expectations that it will be cash flow positive; the tonnage of material that the Company anticipates it will mine from the declines in the future; the timing for reaching the resource at the Ayampamba decline; the timing and extent of development and mining it will accomplish at its three declines; the timing for completion of the floatation system; and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking information was developed using the material factors or assumptions stated herein. Such factors and assumptions include, amongst others, the effects of general economic conditions, the price of gold, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking information. In addition, there are also known and unknown risk factors which could cause the Company's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Known risk factors include, among others, risks and uncertainties relating to exploration and development; the ability of the Company to obtain additional financing; the Company's limited operating history; uncertain mining legislation; the need to comply with environmental and governmental regulations; political and economic instability and general civil unrest in Ecuador; potential defects in title to the Company's properties; fluctuations in currency exchange rates; fluctuating prices of commodities; operating hazards and risks; competition; and other risks and uncertainties, including those described in the Company's Annual Information Form dated March 26, 2010 filed with the Canadian Securities Administrators and available at http://www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward looking information, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking information. All statements are made as of the date of this news release and the Company is under no obligation to update or alter any forward-looking information except as required by law.