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May 10, 2006

Pre-feasibility study identifies 200,000 ounces annual production for passendro gold project, central african republic

Toronto, Ontario – May 10, 2006, AXMIN Inc. (AXM-TSX Venture) is pleased to announce the completion of an independent pre-feasibility study on its Passendro Gold Project located in the centre of the wholly owned Bambari-Bakala permits in the Central African Republic. The pre-feasibility study indicates that the Passendro Gold Project should support an economically robust development. AXMIN’s Board of Directors has approved the undertaking of a definitive feasibility study based on an average annual production rate of 200,000 ounces, estimated capital cost of US$110 million and estimated cash costs below US$200 per ounce. The pre-feasibility study was undertaken by an internationally recognised team of consultants co-ordinated by the independent engineering group GBM Ltd..


The pre-feasibility study reports a Net Present Value ("NPV") of US$136 million at a 5% discount rate and an Internal Rate of Return ("IRR") of 41% based on 3 million tonnes per annum ("mtpa") throughput using the Gravity plus Carbon In Leach ("Gravity-CIL") gold recovery processing route. The study calculated a five year initial mine life based solely on the recently reported indicated resource of 1.54 million ounces of gold (see press release dated April 10, 2006), although by definition mineral resources that are not mineral reserves do not have demonstrated economic viability. The study also evaluated the effect of the discovery of an additional two and half years of mine life resource through the current and ongoing exploration program. The study reported that in the event of such a successful outcome and assuming similar grades and recoveries the NPV would increase to US$233 million and the IRR to 48%. The study utilized constant costs and a constant gold price of US$500 per ounce. Sensitivities to variations in gold price, capital and operating costs were also evaluated.

Based on metallurgical testing conducted as part of the work, the study evaluated both the Gravity-CIL and the Heap Leach gold recovery methods and concluded that both recovery methods would be viable and would yield similar NPVs. Whilst the Heap Leach option would have lower capital costs additional metallurgical work is required to confirm that the encouraging results are applicable to all ore types. The study also evaluated treatment at the 2 mtpa throughput rate; however, the 3 mtpa throughput rate has been selected based on the Company’s confidence in the likelihood of the discovery of additional ore.

Chief Executive Officer, Dr Jonathan Forster states "Management is extremely encouraged by the positive pre-feasibility study results confirming that the Passendro Gold Project is capable of supporting a very robust development on what will constitute the first commercial scale gold mine in the Central African Republic. The decision to proceed with the 3 mtpa project is based on our confidence that we will convert a substantial portion of the current 1.04 million ounces of gold contained in our inferred resource (see press release dated April 10, 2006) to the indicated category over the coming year (including the 15,000 metres of resource drilling undertaken since the most recent resource update) and that our continued exploration will further increase the resource that can be treated through the Passendro plant from adjacent areas, including the recently announced discovery on the nearby Ndassima project (see press release dated March 1, 2006).

"To date our exploration along the 140 km greenstone belt contained within the Bambari-Bakala permits outside of the 10 km long Passendro project has located 14 other centres of gold mineralization. Whilst not all of these may contain economic deposits we consider that the potential for the location of further Passendro sized deposits whose ores can be trucked to the centrally located Passendro plant is very good."

Mining and Reserves

The mining and reserve part of the study was undertaken by SRK (UK) Ltd.. The reserves were calculated based on five discrete engineered pits optimised at a gold price of US$450 per ounce and using an average 45 degree pit slope. The combined average strip ratio is approximately 5:1 with much of the ore being relatively soft and is projected to require little drilling and blasting. Approximately 89% of the ore reporting from the pits has been shown to be oxidised with higher metallurgical recoveries. Both owner-operator and mining contractor options were reviewed but the overall economic difference between these alternatives was shown to be immaterial at this stage so the study has been finalised and costed using the owner-operator basis.


Reserves, Resources and Recoveries






(g/t Au)







Indicated Resources







Gravity-CIL Probable Reserve






Heap Leach Probable Reserve







Cut off grade range: 0.6-1.0 g/t Au for Gravity-CIL: 0.5-0.9 g/t Au for Heap Leach

Whittle pit optimisation at a gold price of US$450 per ounce

Gravity-CIL Option

A conventional Gravity-CIL processing route has been evaluated at both a plant size suitable for 2 mtpa and 3 mtpa yielding average annual production levels of 143,000 and 200,000 ounces respectively and initial mine lives of seven and five years respectively. Mining fleets were selected on the basis of the requirements for the relatively small pits each of which are located within a three km haulage distance of the plant. The average gold recovery for the project based on the metallurgical testwork was determined to average 88% with the oxide ore typically in excess of 90%. Gravity recovery for all ore types was indicated to be between 45-55%.

Tailings disposal was studied by AMEC Earth and Environmental (UK) Ltd. with the preferred site within two km from the proposed plant site.

Heap Leach Option

Bench scale testing of each of the different ore sources has indicated that the recovery of gold by means of Heap Leaching may be achievable using cement agglomeration. The presence of coarse gold in the higher grade ore types appears to have resulted in lower recoveries possibly due to the prolonged period of time required for its dissolution. Further testwork is required to optimise the Heap Leach option. Both 2 mtpa and 3 mtpa options were studied yielding average annual production levels of 140,000 and 190,000 ounces respectively. The lower capital cost of the Heap Leach option together with the higher IRR (although similar NPV) and the associated processing risks of using this route will be evaluated as part of the definitive feasibility study. In particular the potential for Heap Leaching lower grade material, where exceptionally high recoveries are indicated by testwork, will be considered as an adjunct to a Gravity-CIL development.


An environmental scoping study was completed by Golder Associates (UK) Limited in 2005 which confirmed that no fatal flaws had been identified. As a consequence Golder initiated base line studies in January 2006 which will continue through the definitive feasibility study and will contribute to the full Environmental Study, Impact and Assessment ("ESIA") scheduled for completion in 2007. Access and transport routes were also evaluated including the costs of new roads and infrastructure.

Economic Results


Gold price of US$500/oz

Capital costs

over first 2 years

NPV at 5%

discount rate


Pay-back 1


2 mtpa Gravity-CIL

US$95 m

US$107 m



3 mtpa Gravity-CIL

US$110 m

US$136 m



2 mtpa Heap Leach

US$68 m

US$107 m



3 mtpa Heap Leach

US$74 m

US$145 m




1 Pay back from date of first investment with 15 months pre-production construction period




NPV at 5% discount rate







2 mtpa Gravity-CIL




US$70 m

US$107 m

US$181 m

3 mtpa Gravity-CIL




US$96 m

US$136 m

US$218 m

2 mtpa Heap Leach




US$72 m

US$107 m

US$176 m

3 mtpa Heap Leach




US$106 m

US$145 m

US$223 m


The pre-feasibility study has been prepared by GBM Ltd. to standards required by National Instrument 43-101 under the supervision of the Qualified Person, Mr Alex Mitchell C.Eng, FIMMM. This press release has been reviewed by an in-house qualified person, Dr. Jonathan Forster, Fellow of the Institute of Materials, Minerals and Mining in the United Kingdom. A comprehensive executive summary of the pre-feasibility study will shortly be available on the SEDAR website (www.sedar.com).

Directly related to the Passendro Gold Project on February 1, 2006 the Company announced that it had entered into a Mining Convention with the State of the Central African Republic. The Mining Convention is valid for a period of 25 years, extendable by mutual consent. The key terms include:

· a 2.25% royalty on the proceeds from the sale of gold;

· a 10% free carried interest for the State with an option to acquire an additional participating interest of 10% at market value; and

· exemption from:

· taxes (including value added tax ("VAT")) and duties on fuel used in the mining operations;

· VAT on imported capital equipment, consumables and any mining contract;

· duties on imported capital equipment and consumables during the development phase and for a period of 5 years thereafter;

· exoneration from withholding tax on dividends, capital repayments and interest; and

· a five year tax holiday from the date of first commercial production, following which the corporate tax rate will be 30%.


AXMIN will host a conference call to discuss the pre-feasibility study results for the Passendro Gold Project on Wednesday, May 10, 2006 at 10:00 am ET (3:00 pm UK time). The conference call dial-in numbers are:

a. 416-695-9753 (Canada);

b. 1-877-888-4210 (North America);

c. 00-800-4222-8835 (UK and Europe).

Interested parties may also access the conference call by live webcast which will be available at www.axmininc.com and archived for 90 days thereafter.

AXMIN is a mineral exploration company with a strong focus on gold in highly prospective properties across central and west Africa.

For more information regarding AXMIN visit our website at www.axmininc.com .

Safe Harbour Statement

Certain statements contained herein, as well as oral statements that may be made by the company or by officers, directors or employees of the company acting on the company's behalf, that are not statements of historical fact, may constitute "forward-looking statements" and are made pursuant to applicable and relevant national legislation (including the Safe-Harbour provisions of the United States Private Securities Litigation Reform Act of 1995) in countries where AXMIN is conducting business and/or investor relations. Forward-looking statements, include, but are not limited to those with respect to the price of gold, the estimation of mineral reserves and resources, the realization of mineral reserves estimates, the timing and amount of estimated future success of exploration activities, AXMIN’s hedging practices, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risk, title disputes or claims limitations on insurance coverage and the timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variation, including negative variation, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, possible variations in grade and ore densities or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, delays in obtaining government approvals or financing or in completion of development or construction activities. Although AXMIN Inc. has attempted to identify important factors that could cause actual actions, events or cause actions events or results not to be anticipated, estimated or intended, there can be no assurance that forward looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Except as may be required by applicable law or stock exchange regulation, the company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

For more information regarding AXMIN visit our website at www.axmininc.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

For additional information please contact AXMIN Inc.:


Jon Forster

Judith Webster

Chief Executive Officer

Manager – Investor Relations



Tel: +44 (0)1233 665600 (UK)

Tel: +1 416 368 0993 (Canada)

Fax: +44 (0)1233 643728 (UK)

E-mail: ir@axmininc.com