Flinders starts reprocessing graphite at the Kringel Mine in Sweden

VANCOUVER, Aug. 20, 2012 /CNW/ - Flinders Resources Limited ("Flinders") (TSXV: FDR). Mr. Martin McFarlane, President & CEO is pleased to provide an update on the wide range of activities that are underway at the Kringel Graphite Mine in Sweden to advance the project towards a restart of production. Highlights include:

• The back end of the Kringel processing plant has been successfully restarted and production of graphite from stockpiled material is underway.   The entire supply (500 tonnes) of stockpiled material has been sold to German customers and the first shipment is expected to occur in September.
• Dewatering of the Kringel pit has commenced. Once the pit has been emptied, mining of ore may begin.
• Two 500kg bulk samples of fresh graphite ore from the Kringel deposit have been extracted and sent to Metso Corporation ("Metso"), a global mineral engineering and processing technology company, for grinding tests to optimize processing parameters.
• Drilling of additional holes at the Kringel deposit to enable deeper graphite zones to be included in the NI43-101 resource calculation has concluded.  Further assay results will be announced shortly.  The NI43-101 resource calculation at the Kringel deposit is now expected mid to late September due to drill mechanical issues that led to a 5 week overrun of the additional drilling program.

Mr McFarlane states: "We have taken full advantage of the summer period to undertake outside activities necessary to restart the mine and have made excellent progress in key areas. Restarting the back end of the plant to reprocess and ship graphite to our European customers sets us apart our peers, while dewatering the mine is major step toward restarting full production. As cooler weather arrives the focus will move inside to refurbishing the remainder of the process plant."

Production of graphite from stockpiled material

Flinders has restarted the drying, screening and packing operations in its graphite processing plant and is producing graphite from approximately 500 tonnes of stockpiled material that remains at the mine.

Originally initiated to clean up the mine site, restarting graphite production has produced several unexpected benefits including:

• Demonstrating that key sections of the processing plant can be rapidly restarted with minimal maintenance.
• Confirmed that the graphite markets are substantially better than when the Kringel mine last operated in 2001. The legacy stockpile of graphite consists of the lower specification product from when the mine last operated and for which there were no buyers in the depressed graphite market of the time. Today, this remaining 500 tonnes of graphite has already been sold.
• Generated marketing opportunities for Flinders graphite. Sales of stockpiled graphite have re-established awareness of Flinders graphite brand in the market and opened the door for discussions on future supply of graphite when full production commences in 2013.

De-watering the mine

Several months have been spent conditioning the water in the mine with the addition of lime to ensure it complies with the conditions of Kringel's water discharge permit. Testing has confirmed that the water is within specification and so pumping of the water from the pit has now commenced. It is estimated that the pit contains approximately 200,000 cubic metres of water and it will take until late fall before de-watering will be completed.  Once the open pit is empty and access to the ore is achieved, final preparations for mining can occur.

Metallurgical testing of Kringel graphite ore by Metso Corporation

Two 500kg bulk samples of fresh graphite ore from the Kringel deposit have been sent to Metso for grinding tests. The grinding test work will determine the optimum conditions for crushing and grinding the Kringel ore and enable Flinders to complete its refurbishment plans for the processing plant.

The qualified person for the Kringel project is Mr. Geoff Reed, a consultant to Flinders Resources Limited and Member of the Australian Institute of Mining and Metallurgy (CP), has reviewed and verified the contents of this release.

On behalf of the Board

"Martin McFarlane"
Martin McFarlane, President and CEO

Certain information set out in this news release may constitute forward-looking information. Forward-looking statements are based upon the opinions and expectations of management of the Company as at the effective date of such statements and, in certain cases, information provided or disseminated by third parties. Although the Company believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. These statements are made as at the date hereof and unless otherwise required by law, the Company does not intend, or assume any obligation, to update these forward-looking statements.

Neither the 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 news release.

SOURCE Flinders Resources Limited