|October 01, 2010|
Crowflight to Introduce Own Mining Equipment and Mining Team at Bucko Lake Mine; Will Temporarily Suspend Operations to Facilitate Improvements
|• King Place, Crowflight's largest shareholder, committed to arrange financing necessary for equipment purchases and related improvements|
• Crowflight provides update on Jinchuan offer
CROWFLIGHT MINERALS INC. ("Crowflight" or the "Company") (TSX: CML) today announces that it is temporarily suspending ore production mining operations at the Bucko Lake Nickel Mine, located in the Thompson Nickel Belt near Wabowden, Manitoba. Crowflight plans to temporarily suspend the Bucko Lake Mine to facilitate the introduction of its own underground mining equipment and team and to make readjustments to address certain operational issues. The Company intends to provide further details regarding the re start of production mining operations at Bucko Lake, including a timetable for the re start, in the coming weeks.
To assist the Company during this period, King Place Enterprises Limited ("King Place"), the Company's largest shareholder and creditor, has committed in principle to financially support the Company by helping to arrange financing to satisfy its current outstanding accounts payable and to provide the necessary capital to cover anticipated capital expenditures, care and maintenance costs and working capital during the temporary suspension period. King Place is in negotiations with Crowflight to help arrange a debt facility of CAD$20 million to cover such costs, subject to definitive agreements and receipt of all necessary shareholder and regulatory approvals.
Mark Trevisiol, the President and CEO of Crowflight, stated "A number of operational problems continue to negatively affect our cash flow. We believe that continuing mining operations in the current manner is not viable at this time. Consequently, we plan to temporarily suspend operations to provide an opportunity to restructure based on operating our own underground mining equipment and staff, and improved water treatment facilities. Issues around underground mobile equipment, manpower skill sets, backfill and water quality to our concentrator have significantly detracted from the opportunity of mining the Bucko Lake nickel deposit. We intend to focus our efforts to address these problems during the temporary suspension of operations."
Crowflight is currently sourcing the equipment required to address operational problems. The Company also intends to build its own mining team to operate its new equipment and rely less on contracted services. In this regard, Crowflight notes that it received written correspondence from Dumas Mining Contractors Ltd. ("Dumas") on September 29, 2010 stating that Dumas intended to perfect a lien in respect of the Bucko Lake mining lease for work performed to date. Crowflight has disputed the amount that Dumas has claimed to be owed. Water quality has also significantly affected milling operations. Crowflight continues to work with governmental authorities to obtain the required federal governmental permits to use Bucko Lake as its permanent tailings facility, which Crowflight believes will mitigate the water quality issues that have been encountered.
Although the Company has had to temporarily suspend operations, it intends to correct current issues and re-start operations in the coming months. The Company is going to conduct a detailed study of mining and milling operations with the intention of adjusting the mine plan and budgeting the costs expected to be incurred to optimize the Bucko Mine. The results of this plan and budget will be disclosed once available.
Crowflight continues to believe that Bucko Lake Mine is economically feasible. Moreover, the Company believes that it holds a highly prospective exploration package in the Thompson Nickel Belt in Manitoba and the AER Kidd property in Ontario. These exploration properties bolster the current NI 43-101 compliant mineral reserves and resources at the Bucko Lake Mine which as of December 31, 2008 consisted of: Proven and Probable Reserves of 3.7 million tonnes grading 1.45% nickel, Measured and Indicated Resources of 2.8 million tonnes grading 1.53% nickel and Inferred Resources of 5.5 million tonnes grading 1.34% nickel (Proven and Probable reserves are based on 1.25% nickel cut off, while Measured, Indicated and Inferred resources are based on 1% nickel cut off) (See Annual Information Form dated March 31, 2010 available under the Corporation's profile at www.sedar.com).
The Company also notes the continued support that it has received from its majority shareholder, King Place. The Company believes that the commitment in principle of financial support from King Place will assist it to re-commence operations at Bucko Lake Mine.
Strategic Review Of Exploration Properties
Crowflight also announces that its Board of Directors has commenced a review of the potential of the Company's exploration properties for possible spin-off, joint venturing or other value realization event. Crowflight intends to review strategic options in relation to its exploration assets with the objective of finding ways to unlock Crowflight shareholder value. Any resulting spin-off would focus on base metal exploration in the Thompson Nickel Belt in Manitoba and at the AER Kidd Property in Sudbury, Ontario. Crowflight believes that its large base metal exploration properties offer significant opportunities for exploration discovery that are severely undervalued in the current corporate structure.
Update on Jinchuan Offer
The Company also announces that an extension to the offer letter from Jinchuan Group Ltd. ("Jinchuan") has not been received (see previous press releases dated April 6, 2010 and September 3, 2010 regarding the offer letter). Accordingly, the Company considers negotiations to have terminated.
Qualified Person/Quality Control Procedures
This press release has been reviewed by Steve Davies, P.Eng, Chief Operating Officer of Crowflight, who is a Qualified Person under the National Instrument 43-101 guidelines.
About Crowflight Minerals
Crowflight Minerals Inc. (TSX: CML) is a Canadian junior mining company that owns the Bucko Lake Nickel Mine near Wabowden, Manitoba and it also holds 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 timing and costs related to any restart of the Bucko Lake project, the ability to conclude agreements to finance the re-start, and the outcome of the strategic review of other projects. Words such as intends", "anticipates" 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. 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 those risks of the Company described in its annual information form that is available under its profile on SEDAR at www.sedar.com. 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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