Vancouver, B.C., February 2, 2010 - Dynasty Metals & Mining Inc. (TSX: DMM, "Dynasty" or the "Company") provides the following update to shareholders regarding the development of its Zaruma Gold plant and mining operations in southern Ecuador.
At present, the Company has approximately 33 kilograms of gold and 190 kilograms of silver contained in dory bars and circuitry at the Zaruma Gold plant. For the past month the processing plant has been, and continues to be, operating twenty four hours a day processing material extracted during the construction of three declines (see below).
Robert Washer, the Company's President and Chief Executive Officer, commented: "We have faced, and substantially overcome, many adversities over the last two years since the introduction of the Mining Mandate in Ecuador. We have built a world class production facility at a significantly lower cost than similar plants recently constructed elsewhere, created a school of mining and trained a local work force to operate modern mining machinery, developed a self sufficient enterprise in a country that has no mining infrastructure or support and successfully safeguarded our assets in a dynamic legislative environment. Despite these many adversities and the resulting delays we continue to work hard each day towards our primary objective of delivering shareholder value and are close to reaching our first mining target. I wish to thank each of our shareholders for their continued support."
Zaruma Gold Production and Plant Operations
Throughout the fourth quarter of 2009, the Company made a number of significant and minor refinements to the Zaruma gold plant, ran a series of stress tests to optimize future operations, implemented appropriate maintenance scheduling and trained a local workforce.
The refinements include, but were not restricted to:
- an upgrade to electrical systems, including the installation of a diesel generator, after the country experienced unexpected power shortages resulting in a series rolling blackouts that slowed both mine development and plant testing; and
- a design upgrade to the wet section of the plant to allow for the easier installation of additional tanks to increase plant capacity without interruption to production in the future.
The plant was restarted in late December and during the last month it was tested to near current capacity with material stockpiled during the excavation of the declines. The plant will continue to run 24 hours a day until stockpiles are reduced. Thereafter, plant throughput will be in line with the number of tons of material mined each day.
Recent spot testing indicated a much higher content of silver, and other associated metals, than expected. As a result, the Company commissioned an in depth study and has concluded that it should add an additional flotation section to the plant to maximize the recovery of such metals. This additional construction should be completed this year and not significantly impede current and scheduled plant operations.
In other developments:
- The Company has successfully trained 75 employees in the operation of plant equipment, almost all of whom were previously employed during plant construction. This has allowed the Company to maintain a largely local workforce, under the supervision of the Plant Manager. The Company believes this will have a positive impact on future operating costs and community relations.
- The grey water treatment facility constructed by the Company supplies all the water used at the plant. Water that is required is diverted before entering the local river untreated, purified and used in the operation of the plant.
- Representatives of an international refining company have visited the plant site and viewed operations as part of a due diligence process. The Company expects to execute a final contract for the delivery and sale of gold and silver in dory form in the near future.
Zaruma Mining Operations
The Company is currently advancing three declines, employing approximately 200 underground miners and 67 units of Company owned mining equipment. To-date, approximately three kilometres of underground declines and other development drives and tunnels have been developed. The Company expects to achieve production of 400 tons per day during the second quarter of this year. Production will then be increased until the current plant capacity is utilized.
The material extracted and processed to date during the construction of the three declines is not included in the resource estimate and contains variable grade gold and silver. The average gold grade is anticipated to increase significantly when the Company commences mining the material which is included in our resource. The Company has successfully addressed a number of challenges relating to the construction of the declines including the wait for the new mining legislation, which has recently been introduced, and the consequence of limited mining infrastructure and expertise within the country. The Company's fully qualified team has introduced modern mining equipment and responsible mining methods to our operations. While this has initially slowed progress it has allowed the Company to develop a well trained local work force and self sufficient operations, which will benefit the Company in the future.
In other developments:
- Electrical equipment and generators have been installed at each of the Company's three declines. All mining operations can now operate independent from the national power grid in the event of future power black-outs.
- The dimension of the declines has been increased from 4x4 metres to 4.5x5 metres (a 40% increase), which will allow the Company to extend mining operations at greater depth in a more efficient manner.
- Roads and other site works have been upgraded to accommodate large scale underground mining.
The Company has engaged both local and international legal counsel to assist contract negotiations. The exploitation contract will set out the Company's royalty obligations among other things. The Company doesn't expect its ongoing business operations to be adversely affected by the term over which these negotiations are conducted.
President & Chief Executive Officer
About Dynasty Metals & Mining
Dynasty Metals & Mining Inc. is a Canadian based mining company involved in the exploration and development of mineral properties in Ecuador.
The Company has the in production Zaruma Gold Project, the advanced-stage Jerusalem Project, and a highly prospective exploration project, the Dynasty Copper-Gold Belt, which includes the advanced-stage Dynasty Goldfield.
Julian McDermott, a member of AUSIMM (Australian Institute of Mining and Metallurgy) and a "qualified person" within the definition of that term in the National Instrument 43-101, has supervised the preparation of the technical information contained in this news release.
For further information please visit the Company's website at www.dynastymining.com, or please contact:
|Dynasty Metals & Mining Inc.|
Tel: (604) 687-0888
|Brisco Capital Partners Corp.|
Tel: (403) 262-9888
This news release includes "forward-looking information", as such term is defined in applicable securities laws. Users of forward-looking information are cautioned that actual results may vary from forward-looking information contained herein. The forward-looking information includes, without limitation, the anticipated dates that the different phases of commissioning will be completed, the amount and grade of material that the Company plans to process, the timing and ability of the Company to mine and deliver material to the processing plant, the anticipated date of commencement of production, statements regarding the new regulations to the Mining Law and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking information was developed using the material factors or assumptions stated herein. Such factors and assumptions include, amongst others, the effects of general economic conditions, the price of gold, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking information. In addition, there are also known and unknown risk factors which could cause the Company's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information. Known risk factors include, among others, risks and uncertainties relating to exploration and development; the ability of the Company to obtain additional financing; the Company's limited operating history; uncertain mining legislation; the need to comply with environmental and governmental regulations; political and economic instability and general civil unrest in Ecuador; potential defects in title to the Company's properties; fluctuations in currency exchange rates; fluctuating prices of commodities; operating hazards and risks; competition; and other risks and uncertainties, including those described in the Company's Annual Information Form dated March 25, 2009 filed with the Canadian Securities Administrators and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward looking information, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking information. All statements are made as of the date of this news release and the Company is under no obligation to update or alter any forward-looking information except as required by law.