Brigus Gold Reports Increased Quarterly Gold Production from the Black Fox Mine
Brigus Gold Corp. ('Brigus Gold? or the 'Company?) (TSX: BRD) (NYSE
Amex: BRD) reports that operations at its Black Fox Mine ('Black Fox?)
continue to ramp-up with increases in gold production continuing quarter
over quarter as a result of processing higher average grade ore through
the period. The third quarter ending September 30, 2010 ('Q3 2010?) will
be the best operational quarter for the mine since start up in May 2009
and higher production is anticipated again for the fourth quarter of
2010 ('Q4 2010?).
Q3 2010 Operating Performance
For Q3 2010, open pit operations will exceed targets for ore and waste
moved from the Phase 1 open pit and over burden moved for the Phase 2
layback of the open pit. To date for the quarter, ore production from
the open pit has exceeded target and contributed to increases in surface
stockpiles. The positive results are attributable to high equipment
availability and operator performance, better than expected material
quality and favourable weather conditions.
The average gold head grade to the Black Fox Mill is forecast at 3.9
grams per tonne ('gpt?) for Q3 2010, which is approximately 15% higher
than the 3.4 gpt grade in the second quarter of 2010 ('Q2 2010?) and 44%
higher than 2.7 gpt in the first quarter of 2010. Grade control
practices in the open pit continue to improve and grades are expected to
continue to meet plans moving forward.
The mill throughput rate for Q3 2010 is forecast at over 1,950 tonnes
per day ('tpd?). The throughput rate was impacted by a 48-hour shutdown
to replace an underperforming motor on the primary ball mill. Since the
shutdown, the mill has consistently averaged over 2,000 tpd. Early in
the quarter, mill recoveries suffered from high carbon attrition rates,
directly related to receipt from a supplier of poor quality carbon. This
problem was investigated and corrected but it took most of July to
displace the carbon in circuit with fresh, better quality material.
Despite mine production being in line with expectations, these
processing issues have resulted in mill production shortfalls during the
quarter. Gold production for the quarter is expected to be in the range
of 21,000 to 22,000 ounces, which represents a 15% to 20% improvement
over production levels of 18,028 ounces during Q2 2010.
In an effort to identify and evaluate short and long term performance
enhancement opportunities with the mill, the Company retained Mackie and
Associates and EHA Engineering consultants to carry out a review of the
plant operation. The goal of the review was to provide recommendations
for immediate improvements to recovery and throughput as well as to
develop concepts and cost benefit analysis leading to opportunities for
potential increased future throughput. The final report is being
prepared and will be available in October 2010.
Total cash costs for Q3 2010 are anticipated to be within the Company′s
estimated range of $500 and $550 per ounce of gold sold, compared with
$532 per ounce for the first six months of 2010. Pre-stripping of the
Phase 2 open pit, which will not commence mining of ore until 2011, are
included in the Q3 2010 cash costs per ounce forecast in accordance with
United States Generally Accepted Accounting Principles. Q3 2010 cash
cost per ounce estimates include approximately $100 per ounce of Phase 2
open pit pre-stripping costs. Actual cash costs for the quarter will be
reported with Q3 2010 financial results by November 15, 2010.
Underground Operations
Initial underground production commenced, on schedule, in late August
2010. During Q4 2010, the Company expects intermittent ore will be
produced from development headings while production faces are prepared.
The focus for the underground mine crews continues to be completion of
infrastructure to support an intended steady state underground mining
rate of 800 tpd. This ongoing work includes developing a new, larger
profile ramp to connect to the surface and replace the existing ramp.
The new ramp will remove the haulage constraint experienced previously
at the mine. The new ventilation and service raise is expected to be
completed by January 2011. The long term mine plan continues to be
optimized by Brigus Gold′s new management to provide for life of mine
efficiency.
The current underground workforce includes 75 contract miners from
Cementation Inc. and other mining contractors, plus 20 Brigus Gold
employees. Brigus Gold′s workforce continues to grow, and will displace
the majority of the contract workforce by mid-2011.
Gold production is expected to continue to increase quarter over quarter
until steady state production is achieved with the underground portion
of the mine producing at 800 tpd and the open pit moving to 1,200 tpd,
down from the current open pit production rate of 2,000 tpd. Steady
state production from underground is scheduled to occur in the second
quarter of 2011.
Infrastructure Program
Mine infrastructure facilities, including offices, warehouse, mine dry,
core logging and sample preparation areas have been completed and are in
service. A new maintenance facility is currently under construction on
surface and will replace the temporary facility that has been used for
the past two years. The new facility is expected be functional by early
December 2010 and will provide for proper equipment servicing
through-out the mine life.
Infrastructure upgrades, including completion of the new maintenance
facility, are expected to be completed at a cost of $24.3 million,
approximately $3.3 million in excess of the original plan. These
additional costs will be partly offset by expected savings on overburden
removal of the Phase 2 open pit development referenced earlier.
Underground Definition Drilling Confirms Ore Grade
Recent underground definition drilling below the 235 metre ('m?) level,
has confirmed the reserve grade and zone of mineralization in the mine
plan that will form part of the initial underground production. Ongoing
underground definition drilling by Brigus has augmented previous
drilling and highlights of assay results include:
- 759-016: 8.54 gpt over 13.0 m, with 24.38 gpt over 4.1 m
- 759-012: 4.58 gpt over 15.3 m, with 13.27 gpt over 3.3 m and 4.97
gpt over 6.1 m.
Surface Exploration Results
The exploration program at the Black Fox Complex, including the Black
Fox Mine and contiguous Grey Fox-Pike River properties, has to date
included the completion of 28 drill holes, totalling 10,387 metres
('m?), on the Contact Zone, Destor-Porcupine Fault Zone and four new
targets. As of this date, assay results have been returned for 14 drill
holes. (See the drill hole location map in the PDF of this news release
on Brigus Gold′s website.)
The four new targets being drilled include the Historic Gibson Deposit,
the Gibson Shear, School House Zone and the Hislop North Zone. All four
of these targets lie within 1-km of the Contact Zone. These gold
mineralized zones were identified as potential targets from an
evaluation of historic exploration work, geophysics and geologic
mapping, and have now been confirmed by drilling. All targets are
located within 2-km of Brigus Gold′s existing Black Fox Mine and 37-km
of the Black Fox Mill, providing the opportunity for rapid advancement.
Assay results from the first 14 holes have shown consistently good gold
intercepts, similar to previous results from the Contact Zone, (all
uncut with no true widths defined unless otherwise noted) including the
following:
Gibson Shear
- GF10-73: 2.11 gpt over 22.94 m
- GF10-72: 2.3 gpt over 6.06 m
School House
- GF10-71: 37.30 gpt over 1.0 m, 5.49 gpt over 0.95 m and 6.75 gpt
over 0.45 m
Contact Zone/Hanging Wall (estimated true widths)
- GF10-70: 5.69 gpt over 0.89 m and 2.46 gpt over 6.01 m
- GF10-77: 3.53 gpt over 1.74 m with 5.28 gpt over 1.0 m
- GF10-78: 3.60 gpt over 3.07 m with 8.38 gpt over 1.31 m
Detailed assay results are available on the Company′s website at www.brigusgold.com.
Howard Bird, Brigus Gold′s Vice President of Exploration, said, 'The
surface drilling program at the Black Fox Complex continues to yield
positive gold results. We are now undertaking an aggressive drill
program to complement the high-interest gold results obtained from
2004-2005 deep drilling at the Black Fox Mine. We are generating a
pipeline of regional exploration opportunities at the Black Fox Complex
with excellent potential for new gold discoveries and we are focused on
expanding known gold mineralization at the Contact Zone where an initial
National Instrument 43-101 compliant resource estimate will be released
during the fourth quarter. In addition, we are reviewing historical
information from the past producing Stock underground gold mine, located
at our wholly owned Black Fox Mill property, to determine the potential
of identifying new resources with the obvious advantage of having an
operating mill on site.?
Brigus Gold is preparing an initial National Instrument 43-101 compliant
gold resource estimate for the Contact Zone based on limited drilling
completed in 2009 and 2008. The Contact Zone has been intercepted along
850 m of strike and remains open on strike to the north, south and down
dip. Based on 65 completed holes, the resource estimate will cover 435 m
of the known 850 m strike length. Most of the 2008 and 2009 drilling was
concentrated within 120 m of bedrock and the deepest drill hole,
GF09-58, intersected the main lens at 222 m below surface grading a
weighted average of 10.58 gpt over a true horizontal width of 3.7 m.
There are currently three drill rigs operating at the Black Fox Complex.
One rig will complete 5,000 m of step-out drilling targeting the
expansion of the Black Fox gold deposit along strike and down-dip where
the deposit remains open for expansion. Two drill rigs are drilling the
Contact Zone, the Destor-Porcupine Fault Zone, the Historic Gibson
Deposit, the Gibson Shear, the School House Zone and the Hislop North
Zone. A fourth drill rig will be added to test new exploration targets.
This surface drilling program is expected to generate approximately
15,000 m of core by year-end.
Gold Mineralization Potential at Brigus Gold′s Black Fox Mill Property
Brigus Gold has commenced reviewing historical information from the past
producing underground Stock Gold Mine located on our wholly-owned 24
square km Black Fox Mill property, and adjacent to the mill. The review
will determine the potential of extending the known gold mineralized
zones (shoots) down plunge at the Stock gold mine, as well as, to
generate new drill targets. Similar to the Black Fox gold mine, the
Stock gold mine is hosted by the Destor-Porcupine Fault Zone ('DPFZ?).
The Stock gold mine comprises a 3-compartment shaft developed to a depth
of 275 meters below surface. A production ramp extends from the 140
meter level to approximately 330 meters below surface. The Stock Mine
was in production from 1989 to 1994 and also in 2000.
Following the completion of the Black Fox Mill Property data compilation
and review, it is expected that a drilling program will be conducted on
the Stock gold mine and surrounding targets such as the Discovery West
Zone.
Geophysical Exploration Program
An airborne, high-resolution, magnetic geophysical survey was completed
during the first week of September 2010 and final data results are
expected in October 2010. The airborne survey covered the entire Black
Fox complex, as well as the 24-square km Black Fox Mill property, where
the past producing Stock gold mine is located. In addition, line cutting
at the Black Fox Complex has commenced in preparation for the advanced
Quantec Titan 24 geophysical system survey. This system detects
conductive mineralization, disseminated mineralization, alteration,
structure and geology resulting in the identification of prospective
drill targets. The Titan survey was completed over the Black Fox Mine in
2004 and successfully defined the mine deposit.
Underground drilling was conducted by Azimut Drilling and surface
drilling was conducted by Norex Drilling. Drilling was supervised by the
Black Fox staff. All 2010 sample analyses reported herein were performed
by Polymet Labs of Cobalt, Ontario, which is ISO 9001:2000 certified in
North America, and by SGS Laboratories of Sudbury, Ontario, using
standard fire assay procedures. Intercepts cited do not necessarily
represent true widths, unless otherwise noted. Brigus Gold′s quality
control checks include insertion of blanks and standards to ensure
laboratory accuracy.
Vice President and Chief Operating Officer Richard Allan reviewed the
operations information in this news release and Senior Exploration
Project Manager John A. Dixon P. Geo reviewed the technical exploration
information in this release as the Qualified Persons for the Company.
About Brigus Gold
Brigus Gold is a growing gold producer committed to maximizing
shareholder value through a strategy of efficient production, targeted
exploration and select acquisitions. The Company operates the wholly
owned Black Fox Mine in the Timmins Gold District of Ontario, Canada.
The Black Fox Mine is located in the Township of Black River-Matheson,
Ontario, Canada. Brigus Gold is also advancing the Goldfields Project
located near Uranium City, Saskatchewan, Canada, which hosts the Box and
Athona gold deposits. In Mexico, Brigus Gold holds a 100 percent
interest in the Ixhuatan Property located in the state of Chiapas, and
an 80 percent interest in the Huizopa Joint Venture, an early stage,
gold-silver exploration joint venture located in the State of Chihuahua.
In the Dominican Republic, Brigus Gold also has a joint venture for the
APV and Loma El Mate gold exploration projects.
Cautionary Note to U.S. Investors Concerning Estimates of Mineral
Resources
This news release uses the term mineral 'resources?. The Company advises
U.S. investors that while these terms are defined in and required by
Canadian regulations, these terms are not defined terms under the U.S.
Securities and Exchange Commission ('SEC?) Industry Guide 7 and are
generally not permitted to be used in reports and registration
statements filed with the SEC. The SEC generally only permits issuers to
report mineralization that does not constitute SEC Industry Guide 7
compliant 'reserves? as in-place tonnage and grade without reference to
unit measures. U.S. investors are cautioned not to assume that any
part or all of mineral deposits in these categories will ever be
converted into reserves.
Non-GAAP Financial Measures
The term 'total cash cost? is a non-GAAP financial measure and is used
on a per ounce of gold basis. Total cash cost is equivalent to direct
operating cost as found on the Consolidated Statements of Operations and
includes by-product credits for payable silver production. The Company
has included total cash cost information to provide investors with
information about the cost structure of our mining operations. This
information differs from measures of performance determined in
accordance with GAAP in the United States and Canada and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP. This measure is not necessarily
indicative of operating profit or cash flow from operations as
determined under GAAP and may not be comparable to similarly titled
measures of other companies.
Cautionary and Forward-Looking Statements
This news release includes 'Forward-Looking Statements? within the
meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements regarding the increased quarterly gold
production, average grade of gold, anticipated total cash costs, tonnes
of material moved, expected mill throughput rate, in each case in Q3
2010, operational performance in Q4 2010, ore produced from development
headings in the underground mine in Q4 2010, completion of the
ventilation and surface raise and new ramp in respect of the underground
mine, plans for the Company′s surface and underground exploration
drilling programs and the results associated therewith, the amount of
surface drilling, the addition of drill rigs operating at Black Fox
Complex and the timing associated therewith, increase of Black Fox
resources, matters relating to the geophysical survey of the Black Fox
Complex and the timing thereof, release date of a National Instrument
43-101-compliant estimate for the Contact Zone, and additions to
resources in 2011 are forward-looking statements and estimates that
involve various risks and uncertainties. There can be no assurance that
such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
statements. Important factors that could cause actual results to differ
materially from these forward-looking statements include environmental
risks and other factors disclosed under the heading 'Risk Factors? in
Brigus Gold′s and its predecessor companies′ most recent annual report
on Form 10-K filed with the United States Securities and Exchange
Commission and elsewhere in Brigus Gold′s documents filed from time to
time with the Toronto Stock Exchange, the NYSE Amex, the United States
Securities and Exchange Commission and other regulatory authorities. All
forward-looking statements included in this news release are based on
information available to the Company on the date hereof. The Company
assumes no obligation to update any forward-looking statements, except
as required by applicable securities laws.
Brigus Gold Corp.
Wendy Yang, Vice President of Investor Relations
720-886-9656
Ext. 217
ir@brigusgold.com
or
Sean
Tufford, Director of Investor Relations
902-422-1421
Toll
Free: 1-866-785-0456
sean@brigusgold.com
www.brigusgold.com