Yellowhead Mining Inc. Reports Financial and Operating Results for Fourteen Months Ended December 31, 2012

TSX:YMI, OTCQX:YHMGF

VANCOUVER, March 28, 2013 /CNW/ - Yellowhead Mining Inc. ("Yellowhead" or the "Company") (TSX: YMI, OTCQX: YHMGF) is pleased to report its results of operations for the fourteen months ended December 31, 2012.

For the full consolidated Financial Statements and Management Discussion & Analysis, please visit SEDAR at www.sedar.com or the Company's web site, www.yellowheadmining.com.

Highlights

Key highlights for the fourteen months ended December 31, 2012 and subsequent weeks include:

• Detailed NI 43-101 compliant amended feasibility study was completed and filed on March 29, 2012 and restated and amended as of January 25, 2013 (the "Feasibility Study").
• Released an updated Resource estimate with Measured and Indicated Resources at a 0.2% copper cut-off grade are estimated as: Copper - 5.3 Billion pounds, Gold - 838,600 ounces and Silver - 34 Million ounces.
• Purchased a former Weyerhaeuser Company Ltd. sawmill property which has a 1,880m rail siding connecting to the Canada National Railway's transcontinental mainline.  This property will be used for a rail load-out facility located 25km by road from the Harper Creek project mill site, as a staging area during construction and for a mine administration office.
• The Environmental Assessment study at Harper Creek was advanced with the completion of a comprehensive baseline study program.  The application will be filed in the second quarter of 2013.
• Changed the financial year end from October 31 to December 31 effective for the 2012 financial year.
• Adopted a shareholder rights plan to ensure the fair treatment of all shareholders in the event of a takeover bid or change of control.
• Common shares began trading on the Toronto Stock Exchange ("TSX") main board, previously listed on the TSX Venture board.
• Common shares began trading on the OTCQX International marketplace ("OTCQX").
• Completed a non-brokered private placement of 8,032,307 common shares of the Company at an issue price of $0.65 per common share for gross proceeds of $5,221,000 and 2,141,403 flow-through common shares of the Company at an issue price of $0.70 per flow-through common shares for gross proceeds of $1,498,982.
• Engaged Evercore Group L.L.C. to provide financing advisory services and to assist in the evaluation of strategic partnership and financing alternatives for Harper Creek.

Outlook

The Company's plans for 2013 and beyond are to:

• Explore financing options in order to finance the development of Harper Creek, including but not limited to: strategic investors and/or partnerships, project and equipment financing, stock offerings and off-take agreements.
• Continue the process of environmental permitting through 2013 following the submission of the Environmental Assessment application in the second quarter of 2013.
• Prepare and submit the Company's applications for a British Columbia Mines Act Permit for Harper Creek.
• Continue consultation with the First Nations and local communities to address any potential environmental and socio-economic impacts of Harper Creek and the Company's mitigation strategies.
• Continue negotiations with the local First Nations working towards conclusion of a long term Benefits Agreement.
• Continue exploration activities to better define the resource/reserve at Harper Creek.

Summary of Key Financial Highlights

Yellowhead has no revenue from operations.  Results can fluctuate significantly from period to period due to the level of engineering and environmental study effort and resource drilling.

The Company's expenditures on the Harper Creek project for the fourteen months ended December 31, 2012, were as follows:

The Company's net loss for the three months ended December 31, 2012, three months ended September 30, 2012, three months ended June 30, 2012, three months ended March 31, 2012, two months ended December 31, 2011 and the quarterly periods from the prior fiscal year are as follows:

The Company's administrative expenses for the three months ended December 31, 2012, were approximately $973K higher than for the three months ended September 30, 2012.  This increase was due to three major expenses that were incurred in the three months ended December 31, 2012 and not incurred in other periods.  These three major expenses were: (1) the Company incurred approximately $284K related to severance payments to the former CEO; (2) the Company accrued approximately $202K related to annual bonuses for employees; and (3) the Company paid approximately $400K to BC Hydro for an Identification Phase study which is being partially funded by the Company and is studying an upgrade to the power infrastructure in the North Thompson Valley.

Exploration costs were $752K higher for the three months ended December 31, 2012 compared to the three months ended September 30, 2012.  This increase is due to three main factors: (1) The Company recognized an adjustment of approximately $652K in the three months ended December 31, 2012 as a result of an audit of its Mineral Exploration Tax Credit by the Canada Revenue Agency; (2) The Company spent approximately $717K related to an in-fill drilling program which started in November; and (3) The Company incurred $596K less in mine permitting costs in the three months ended December 31, 2012 as compared to the three months ended September 30, 2012.

Other expenses/(income) for the three months ended December 31, 2012, were in line with the three months ended September 30, 2012.

Cash and Cash Equivalents

The Company had cash and cash equivalents of $7.06M as at December 31, 2012 compared to cash and cash equivalents of $15.67M as at October 31, 2011.

The Company's focus, going forward, is expediting the development of the Harper Creek project. Major activities include completing the Environmental Assessment process, advancing the Mine Permitting process and pursuing funding activities to develop the Harper Creek project.  Following the completion of the private placement announced by the Company on October 31, 2012, the Company believes its current working capital is sufficient to keep advancing its Harper Creek project in the permitting process.  However, additional funding will be required by the Company to finance the development of Harper Creek.

International Financial Reporting Standards ("IFRS")

The Company has completed its transition to IFRS with a transition date of November 1, 2010.  Details of the adjustments under IFRS and reconciliations between previously reported numbers under Canadian GAAP and IFRS are provided in Note 22 of the Company's consolidated financial statements for the fourteen months ended December 31, 2012.

Fiscal year end change

The Company has prospectively changed its fiscal year end date from October 31^st to December 31^st.  In accordance with relevant legislation the Company prepared condensed consolidated interim financial statements for the periods ending and as at December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012 for the current fiscal year.  The Company's annual financial statements are for the fourteen months ended December 31, 2012.

About Yellowhead Mining Inc.

Yellowhead's Harper Creek Project is a copper-gold-silver volcanogenic sulphide deposit located in south-central British Columbia, approximately 150 kilometers by highway north of Kamloops.  The Feasibility Study, dated and filed on SEDAR on March 29, 2012 and restated and amended as of January 25, 2013 (and available for review on SEDAR and Yellowhead's website) shows an after-tax NPV₈ of US$465.3 million with an IRR of 17.0% based on long-term metal price projections of US$2.50/lb Cu, US$1,250/oz Au and US$20/oz Ag, and a US$:Cdn$ exchange rate of 0.86:1.  The Feasibility Study demonstrated a 28 year project life at a milling rate of 70,000 tpd (25.55Mt/y). The project as designed is expected to produce a total of 3.63 billion pounds of copper, 372,000 ounces of gold and 14 million ounces of silver contained in concentrate.

At a 0.14% Cu cutoff,  Proven Reserves are estimated at 401.18Mt @ 0.272% Cu, 0.031g/t Au and 1.15g/t Ag; Probable Reserves 303.22Mt @ 0.248% Cu, 0.027g/t Au and 1.13g/t for a total Proven and Probable Reserve of 704.4Mt @ 0.262% Cu, 0.029g/t Au and 1.14g/t Ag.

The Feasibility Study is based on an updated resource.  At a 0.20% Cu cutoff Measured Resources are estimated at 348.5Mt at 0.31 % Cu, 0.034g/t Au, 1.3g/t Ag; Indicated Resources at 466.5Mt at 0.28% Cu, 0.03g/t Au, 1.3g/t Ag for a total Measured and Indicated Resource of 815Mt at 0.29% Cu, 0.032g/t Au and 1.3g/t Ag (5.26 billion pounds of copper contained).  A further 80.17Mt at 0.30% Cu, 0.033g/t Au, and 1.4g/t Ag are estimated in the Inferred Resource category (0.53 billion pounds of copper contained) and are reported as waste in the mine production schedule until they can be upgraded by additional infill drilling.

Yellowhead has a 100% interest in the Harper Creek Project (subject to the payment of a 3% NSR royalty capped at $2.5 million, adjusted for inflation and an additional 2.5% NSR royalty on an estimated 1.5 Mt of ore which is expected to be mined beginning in year 16 of the Feasibility Study mine plan).

T. Gregory Hawkins, Interim Chief Executive Officer of the Company and a Qualified Person under NI 43-101, has reviewed and approved the technical content of this press release other than the analytical results of the Harper Creek drill program disclosed in this release.

Forward Looking Statements

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, including, among others, the accuracy of mineral grades and related assumptions, inherent operating risks, planned expenditures, proposed exploration and development at the Harper Creek Project, operating and economic aspects of the Harper Creek Project, as well as those risk factors identified in the Company's Annual Information Form filed under the Company's SEDAR profile. Yellowhead undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect projected results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Yellowhead.

This news release includes disclosure of scientific and technical information, as well as information in relation to the calculation of mineral resources and reserves, with respect to the Harper Creek Project. Yellowhead's disclosure of mineral resource and reserve information is governed by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM ("CIM Standards"). There can be no assurance that mineral resources will ultimately be converted into mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. This news release uses the terms "measured", "indicated" and "inferred" resources. U.S. persons are advised that while such terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. "Inferred Resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or other economic studies. U.S. persons are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. U.S. persons are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

SOURCE Yellowhead Mining Inc.