|November 16, 2009|
Crowflight Provides Operational Update and Temporarily Suspends Production to Accelerate Mine Development and Complete Backfill Plant; Sets Conference Call for November 17th
|CROWFLIGHT MINERALS INC. ("Crowflight" or the "Company") (TSX: CML) announces today that the Company will be temporarily suspending all production mining and milling operations at the Bucko Lake Nickel Mine (Bucko) located in the Thompson Nickel Belt near Wabowden, Manitoba for three months, effective immediately to complete ramp development, accelerate mine development and upgrade the backfill plant.|
Crowflight's Executive Chairman, Stan Bharti stated, "As with any new mine, Bucko has had its challenges during its first year of production. Though we have been producing nickel concentrate since the mill resumed operations in August, we have not achieved a steady-state of full capacity production at Bucko. We believe that we must apply what we have learnt from the challenges we have experienced and focus the Company's financial resources and efforts on optimizing the Bucko Mine so that it can deliver and sustain production of 1,000 tonnes per day by the end of the first quarter in 2010. To that end, over the next three months, Crowflight plans to complete ramp development to the 800 level; continue diamond drilling on the 500, 600 and 900 levels; commission the backfill plant; and advance development ahead of production to prepare for 2010 full production."
The Company will be initially laying off approximately 45 employees temporarily, and expects to reduce fixed operating costs by $3 million.
As a result, Crowflight has revised its production guidance for 2009 and now expects to produce 1.3 million pounds of nickel, generating approximately 1.2 million pounds of payable nickel. Average cash cost of sales per pound of nickel(1) for the full year 2009 is expected to be approximately US$7.50 - $8.50 per pound at an exchange rate of CDN$1.10 to US$1.00, primarily from costs incurred for the year-to-date and lower than expected production for the remainder of the year. Management expects that costs will decrease significantly as full capacity production is sustained at Bucko in 2010.
Capital expenditures for the remainder of 2009 are expected to be $6-7 million (consistent with the disclosure in the second quarter MD&A).
Furthermore, due to the on-going federal permitting process to use Bucko Lake for the long-term storage of tailings underwater and because Crowflight is still awaiting approvals in obtaining a federal permit, Crowflight expects to spend an additional $2 million this year to expand the interim tailings storage facility (ITSF) currently being used at Bucko. The continued uncertainty regarding this permit is a further reason for conserving financial resources during the next few months. Future expansions of the ITSF in future years will require additional capital.
The Company plans to issue comprehensive guidance regarding 2010 production and costs in January 2010. It is anticipated that by the end of the first quarter 2010, the Bucko mine will be sufficiently developed and have adequate working places (stopes) available to sustain the full production rate of at least 1,000 tonnes per day.
The Company also announces that Paul Keller will be stepping down as Crowflight's Vice President Operations and Chief Operating Officer effective immediately. Mr. Keller will remain with Crowflight as a consultant. We wish to thank Mr. Keller for all his contributions.
(1) Non-GAAP Measure
This press release refers to cash cost per pound which is not a recognized measure under Canadian GAAP. This non-GAAP financial measure does not have any standardized meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable to a similar measure presented by other issuers. Management uses this measure internally. The use of this measure enables management to better assess performance trends. Management understands that a number of investors and others who follow the Company's performance assess performance in this way. Management believes that this is a better indication of its expected performance in future periods. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Canadian GAAP.
Conference Call Details
Crowflight's Executive Chairman, Stan Bharti and management team will host a conference call on Tuesday, November 17, 2009 at 11:00am EST to discuss today's announcement with its shareholders.
Date: Tuesday, November 17, 2009
Time: 11:00AM ET
Local Callers: 416-340-8527
North American Callers: 1-888-340-9642
International Callers: +1-416-340-8527
There will be a question and answer period following the presentation.
Qualified Person/Quality Control Procedures
This press release has been prepared and reviewed by Mr. Greg Collins, P.Geo. (APGO/APEGM) VP Exploration of Crowflight, who is a Qualified Person under the National Instrument 43-101 guidelines.
Crowflight Minerals -- Canada's Newest Nickel Producer
Crowflight Minerals Inc. (TSX: CML) is a Canadian junior mining company that owns the Bucko Lake Nickel Mine near Wabowden, Manitoba. The Company is also focused on nickel, copper and Platinum Group Mineral (PGM) projects in the Thompson Nickel Belt and Sudbury Basin.
Cautionary Note on Forward-Looking Information
This press release contains forward-looking statements under Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the closing of the financing on the terms proposed; the stated use of proceeds; the Company's development potential and timetable of the Company's properties, including the Bucko Lake Project; the future price of nickel and other minerals; the timing and amount of estimated future production; capital expenditures; mining or processing issues; and environmental risks. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Bucko Lake Project are based on assumptions underlying mineral reserve and mineral resource estimates and the probability of realizing such estimates that are set out herein. Production estimates are based on mine plans and production schedules, which have been developed by the Company's personnel and independent consultants. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events and delays during production;; timing and availability of external financing on acceptable terms; changes in project parameters as plans continue to be refined; future prices of minerals, particularly nickel; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.
Further information is available on the Company's website at www.crowflight.com or contact:
President and CEO
Tel: (416) 861-5893
Manager, Investor and Public Relations
Tel: (416) 861-5803
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