VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/19/13 -- Abacus Mining & Exploration Corporation (TSX VENTURE: AME) ("Abacus" or the "Company") is pleased to provide the following update from a recent KGHM-Ajax Mining Inc. ("KGHM-Ajax") Board Meeting. Abacus holds a 20% interest in KGHM-Ajax which owns the Ajax copper-gold project ("Ajax project") located near Kamloops, B.C.
The operator of the Ajax project, KGHM International ("KGHMI"), has committed significant resources to the project's development since assuming the operatorship on September 1, 2012, demonstrating a strong commitment to the community, environment and to the long term sustainability of the Ajax project.
Community Focus
With a strategy of engaging the community with a strong local presence, KGHMI has expanded the Ajax project team which currently numbers 23 employees, and plans to hire additional personnel throughout the year. Of note, the Community Affairs Department was enhanced to recently include Mr. Yves Lacasse, formerly Chief of Police for the RCMP detachment in Kamloops, as External Affairs Manager for the project. In addition, community, external affairs and outreach specialists have recently joined the KGHM-Ajax Kamloops team. A successful open house was hosted in January involving local government and about 600 members from the community.
First Nations Agreements - MOU and Cultural Heritage Study signed
Agreements have been signed with the Stk'emlupsemc te Secwepemc ("STS"), represented by the Tk'emlups and Skeetchestn First Nations bands for a Cultural Heritage Study ("CHS") and a Memorandum of Understanding ("MoU"). Consultations continue with the STS on a Capacity Funding Agreement to assist them in the review of the Environmental Assessment and towards aligning an Impacts Benefits Project Agreement ("IBA"). The IBA would define the mutual responsibilities between KGHM-Ajax and the STS in connection with the benefits, construction, operations, and closure of the Ajax project.
Technical Review Update
An extensive review was performed by KGHMI staff and outside consultants to optimize the Ajax mine plan including validation of the proposed capital and operating expenditures. Pilot plant testwork of the tailings storage facility was successfully conducted and a sample has been forwarded to Golder Associates for further test work. A metallurgical pilot plant test is also being planned for the Ajax ore. These and other technical considerations are being assessed to improve project economics and mine life. The 2013 budget for KGHM-Ajax is $58 million of which Abacus' 20% would be funded by its monies currently held in escrow for development of the Ajax project.
Environmental & Permitting
The formal Environmental Assessment Application is expected to be submitted to the federal and provincial agencies in September this year. The next phase is the submission of the permit application under the joint Mines Act and Environmental Management Act in the first quarter of 2014. KGHMI is currently pursuing a schedule that envisions production start-up at Ajax in the third quarter of 2016. This represents a delay compared with the Feasibility Study dated January 6, 2012 but encompasses increased detailed engineering, and technical and environmental assurances.
Financial Condition
Following the exercise of the Development Option by KGHM Polska Miedz S.A. on April 2, 2012, (thereby increasing its ownership in KGHM-Ajax to 80%), Abacus was paid cash consideration of US$29.9 million. To date, net of cash calls, $24.9 million remains in Abacus' escrow account which will contribute to Abacus' portion of all development expenditures. The joint venture agreement with KGHM Polska Miedz S.A. provides for a financed carry for Abacus' 20% interest with 100% of the project's capex obligation to be provided by KGHM.
Abacus has approximately $1.5 million in cash and equivalents. This is expected to be sufficient for the foreseeable future as the Company has a very low monthly cash requirement.
Strategic Review
Abacus continues working with financial advisor Stifel Nicolaus Canada Inc. in evaluating a number of potential strategic opportunities to maximize the value of its 20% interest in the Ajax Project. A development in this regard will be announced when appropriate.
On Behalf of the Board,
ABACUS MINING AND EXPLORATION CORPORATION
James D. Excell, President & CEO
Donna Yoshimatsu, Director, Investor Relations
About Abacus
Abacus is a mineral exploration and mine development company with a 20% interest in the feasibility stage Ajax copper-gold project located near Kamloops, B.C. The Ajax Project is a joint venture between Abacus Mining & Exploration Corporation and KGHM Polska Miedz S.A. through KGHM-Ajax.
The Ajax project feasibility study supports production of a total of 2.5 billion lbs of copper and 2.28 million ozs of gold in concentrate, or an average of approximately 109 million lbs of copper and 99,000 ozs of gold annually, over a 23 year mine life. Total proven and probable mineral reserves are estimated at 3 billion lbs Cu and 2.7 million ozs Au at 0.27% Cu and 0.17 g/t Au based on $2.50 Cu and $1,085 Au. The proposed mine plan envisages a conventional open pit operation processing 60,000 tonnes per day or 21.9 million tonnes per year of ore. (see Report titled "Ajax Copper/Gold Project -- Kamloops, British Columbia Feasibility Study Technical Report" by Wardrop (a Tetra Tech Company) dated January 6, 2012 ("FS")).
Forward-Looking Information
This release includes certain statements that are deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Abacus expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes 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 include changes to commodity prices, mine and metallurgical recovery, operating and capital costs, foreign exchange rates, ability to obtain required permits on a timely basis, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Abacus Mining and Exploration Corporation
James D. Excell
President & CEO
jexcell@amemining.com
Abacus Mining and Exploration Corporation
Donna Yoshimatsu
Director, Investor Relations
(647) 345-0826
dyoshimatsu@amemining.com
Abacus Mining & Exploration Corporation
(604) 682-0301
(604) 682-0307 (FAX)
info@amemining.com
www.amemining.com
