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Jan 31, 2011


Toronto, Ontario – January 31, 2011 – AXMIN Inc. (AXM-TSX Venture) is pleased to announce the on schedule completion of the revalidated feasibility study (“FS”) for its 100% owned Passendro Gold Project in the Central African Republic (“CAR”). The first three years provide an average annual production of 205,000 ounces with an average cash cost of US$437/oz, resulting in a rapid project payback of 2.2 years. The FS was led by SENET (PTY) Ltd. of South Africa (“SENET”) and included a multidisciplinary team of independent consultants, all of whom were involved in the original 2008 study.

The FS results indicate a robust project with a NPV at a 5% discount of US$340 million, an IRR of 32%, and a low cash cost of US$484/oz over a mine life of 8.3 years. The strong financial results, together with the fiscal terms of the signed Mining Convention; the award of a 25 year Mining Licence; and significant exploration potential have, contributed significantly to lessening the project risk profile compared to the original 2008 study.

AXMIN is also making excellent inroads in securing the required debt facility for developing the Passendro project. In the fall of 2010, AXMIN re-engaged Endeavour Financial International Corporation (“Endeavour”) to provide debt finance advice. The process has been advancing very well and its progress will be announced in the near future.
In addition, the FS identified several areas that require optimization that may result in a lower capital cost that would further improve the project’s economic profile. Several of these areas will include mill throughput optimization, contract mining and partner power supply agreements. This review will be undertaken during the detailed engineering and implementation phase of the project.

President and CEO of AXMIN, Mr. George Roach, comments, “I am extremely pleased with the FS results for Passendro. It demonstrates that the project is now both technically and economically more robust and very well positioned to take advantage of this strong gold market. The FS gives us the documentation we need to secure lending agreements to advance the project. Since taking the helm at AXMIN, I have had a singular focus on advancing this tremendous asset and I strongly believe that we are poised to push forward to our next milestone by securing debt financing and developing CAR’s first modern gold mining operation.”

Project Highlights  


Assumed Gold Price



Assumed Oil Price



Mine Throughput

2.8 mtpa


Mine Life

8.3 years


Development & Construction

24 months


Strip Ratio



Average Annual Production years 1-3

205,000 oz


Average Annual Production (LOM)

163,000 oz


Initial Capital Costs (excluding contingency)

US$246 million


Total Cash Costs (including royalties) (LOM)



Average Metallurgical Recovery



Gravity Recovery



IRR (after tax & royalties)



NPV (after tax, 5% discount)

US$340 million


Operating Cash Flows

US$493 million


Payback Period

2.2 years

The Passendro Gold Project is located in a sparsely populated area of the CAR, just 60 km north of the town of Bambari, in the centre of 90 km long Bambari Archaean greenstone belt. Passendro sits in the centre of a 355 sq km 25 year mining licence that was awarded in July 2010. The remainder of the Bambari belt is covered by AXMIN’s 100% owned Bambari 1 & 2 permits. The FS envisages a conventional open pit Gravity-Carbon in Leach (“CIL”) operation with a mine production rate of 2.8 mtpa. The study outlines an initial mine life of 8.3 years. However, AXMIN is confident that further drilling in and around the existing pits and along the prospective belt will continue to add to the reserves and mine life.

Mineral Resource Estimate – June 2009
The last in-situ Mineral Resource estimate was prepared by independent consultants SRK Consulting (UK) Ltd. (“SRK”) in June 2009. The Measured and Indicated mineral resource remains at 2.0 million ounce gold (31.5 Mt grading 2.0 g/t Au) and an Inferred Mineral resource of 1.1 million ounce gold (21.6 Mt grading 1.6 g/t Au). At Main Zone there is a significant amount of low grade material below the current reporting cut off of 0.8g/t. This low grade Measured and Indicated material that total some 27.5 Mt at 0.52g/t (460,000 oz), estimated between a cut off grade of 0.3 to 0.8g/t is included within the classification categories.

Grade interpolation was carried out using ordinary kriging and classification of the Mineral Resource estimate was based on geological continuity, bore hole spacing and the results of a detailed variography analysis. The resource estimates have used different cut off grades ranging from 0.8 to 1.2 g/t Au. High values have been capped at 17 g/t Au at Main Zone, 10 g/t Au at Baceta, 60 g/t Au at Katsia East, 40 g/t Au at Katsia Main and South with no high grade cut applied to Mbourou. The estimates have been prepared under the guidelines of National Instrument 43-101 and accompanying documents 43-101.F1 and 43-101.CF.





(g/t Au)

Contained Gold


Measured & Indicated








Additional Low Grade – Main Zone Pit (0.3 – 0.8 g/t Au)

Measured & Indicated








Mining Reserve Estimate – January 2011

The mining reserve was prepared by SRK utilizing a gold price of US$1,000 per ounce and presented a total proven and probable reserve of 23.5 Mt of ore at an average grade of 1.9 g/t Au containing 1,446,175 ounces gold. Approximately 66% of the ore reported in the pits is oxide material with 21% in transitional ores and 13% within sulphide mineralisation.





(g/t Au)

Contained Gold










Total Reserve




Note: proven and probable reserve is derived from measured and indicated resources

Capital Cost

The FS estimates an initial capital cost for construction of the operations at the Passendro Gold Project to be US$265.5 million (including US$20 million of contingency). In addition, working capital of US$8.4 million will be required during the early part of operation and ongoing mine development and sustaining capital of US$41.3 million has been identified over the life of mine. Capital cost estimates are as at fourth quarter 2010 and based on conventional open pit mining using owner-operator mining fleet and a 2.8 million tonne per annum (“mtpa”) Gravity-CIL process plant producing. As mentioned above, AXMIN expects that further optimization during the detailed engineering and implementation phase of the project may result in a lower capital cost. See table below for full details of the capital cost.


Capital Cost

(US$ Million)

Initial mining capital cost

Pre-strip costs

Pit dewatering


Process plant direct costs

Infrastructure costs

Owners’ pre-production costs

Off-site infrastructure


Management & construction















Working capital




Operating Costs
Estimated operating costs average US$28.02/tonne (US$484/oz Au) over the life of mine and were also based on US$80 barrel oil. A breakdown of the estimated annual operating costs is summarized in the table below.


Life of Mine

(US$ Million)



US$ per ounce


Processing & Refining















Total Production Costs




Financial and Sensitivity Analysis

SENET prepared a financial analysis of the Passendro Gold Project using the discounted cash flow model incorporating a US$1,100/per ounce gold price, royalty of 2.25% and corporate tax payable after 5 years of production. The study indicates that the project is economically robust with a positive IRR and NPV over a range of gold prices. Based only on the current proven and probable mineral reserves and an average gold price of US$1,100/oz over the life of mine, the IRR is 32.1%, and the NPV at 5% discount is US340 million with a net cash flow of US$493 million. The following table details the sensitivity of the project to gold price.


Gold Price



NPV (5%)

US$ million

NPV (10%)

US$ million




Base Case

- 18.2%





















Amended Mining Convention – July 2010

Upon the award of the 25 year Mining Licence on July 29, 2010, AXMIN signed an Amendment to the January 2006 Mining Convention. The positive tax considerations detailed in the 2006 Mining Convention have remained intact.

Following is a summary of the 2010 Amended Mining Convention:
• A 2.25% royalty on the proceeds from the sale of gold payable to the CAR government;
• In lieu of a 10% free carried interest, the CAR government received 26 million common shares of AXMIN and 20 million AXMIN warrants exercisable over a 5 year period for US$0.30/share;
• A signature bonus of US$11 million payable to the CAR government; US$5 million paid on August 9, 2010 and US$3 million to be paid on each of April 30, 2011 and 2012; and

o taxes (including value added tax (“VAT”)) and duties on fuel used in the mining operations;
o VAT on imported capital equipment, consumables and any mining contract;
o duties on imported capital equipment and consumables during the development phase and for a period of 5 years thereafter;
o exoneration from withholding tax on dividends, capital repayments and interest; and
o a five year tax holiday from the date of first commercial production, following which the corporate tax rate will be 30%.

Qualified Persons

The contents of this press release have been reviewed by the following independent consultants:

Neil Senior, Pr.Eng, MSc, (FSAIMM), Joint Managing Director is a Qualified Person under National Instrument 43-101, and is the SENET person responsible for the Passendro Gold Project Feasibility Study.

Sean Cremin, Bsc Mining Eng (Hons), MIMM, Principal Mining Engineer is a Qualified Person under the National Instrument 43-101, and is the SRK person responsible for the Passendro Gold Project mineral reserve calculation.


AXMIN is a Canadian exploration and development company with a strong focus on central and West Africa. AXMIN has projects in Central African Republic, Mali, Mozambique, Sierra Leone, Senegal and Zambia. For more information regarding AXMIN visit our website at www.axmininc.com.

For additional information please contact AXMIN Inc.:

George Roach
President & CEO
Direct T:+44 779 626 3999

Judy Webster
Manager Investor Relations
T: 416 368 0993 ext 221

 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.

This press release includes certain "Forward-Looking Statements." All statements, other than statements of historical fact included herein, including without limitation, statements regarding future plans and objectives of AXMIN; and statements regarding the ability to develop and achieve production at Passendro, to revalidate the BFS and to satisfy the terms of the Mining Licence as negotiated, are forward-looking statements 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 AXMIN's expectations have been disclosed under the heading "Risk Factors" and elsewhere in AXMIN’s documents filed from time-to-time with the TSX Venture Exchange and other regulatory authorities.  AXMIN disclaims any intention or obligation to update or revise any forward-looking statements whether resulting from new information, future events or otherwise, except as required by applicable law.