Rio Narcea Awards Mandate for Financing of Tasiast Gold Project.TORONTO -- CELEBRATES THE OFFICIAL COMMENCEMENT OF CONSTRUCTION IN MAURITANIA Rio Narcea Gold Mines, Ltd. ("Rio Narcea" or the "Company")(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :RNG See RELAX NG. )(AMEX AMEX See: American Stock Exchange :RNO RNO Russian National Orchestra RNO Race National Origin (EEO) RNO Radio Network Optimization RNO Rosettanet Object RNO Resident Naval Officer RNO Recipient Network Operator (mobile communications operator) ) announces the signing of a mandate letter with Macquarie Bank Macquarie Bank Limited is an Australian merchant bank and financial services group, providing a broad range of products and services to investors, corporations and government. Its global headquarters is in Sydney, and it is listed on the Australian Stock Exchange (ASX). Ltd. to provide a $45 million debt facility for the construction of the Tasiast gold mine located in Mauritania, West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. . The debt facility, which is subject to Macquarie Bank's credit approval including the usual technical and legal due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , includes a $40 million project loan facility repayable in quarterly installments with final maturity in June 2011; a $5 million guaranteed loan facility with final maturity in December 2011 and a gold hedging facility under which the Company will be required to cover 340,000 ounces of gold production until March 31, 2012, assuming the total facility is drawn down. Macquarie Bank, headquartered in Sydney, Australia, is a leading provider of services and products to the global resources industry including equity, debt and mezzanine financing Mezzanine Financing A hybrid of debt and equity financing. Mezzanine financing is typically used to finance the expansion of existing companies, and it is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the , structured hedging products and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . Once the debt facility is finalized See finalization. , and with the Company having cash and cash equivalents at September 30, 2005 of $57.6 million as well as ongoing and increasing cash flow from the Aguablanca mine, Rio Narcea will have more than sufficient funds to cover the capital cost to construct the Tasiast mine. In addition, Rio Narcea recently celebrated the official commencement of construction at its Tasiast mine with a ceremony held at the project site, approximately 310 km northeast of the capital city of Nouakchott, Mauritania. Attending the ceremony with the Company's senior management and management and employees of the Company's local subsidiary, Tasiast Mauritanie Limited SA, were representatives from the Government of the Islamic Republic An Islamic republic, in its modern context, has come to mean several different things, some contradictory to others. Theoretically, to many religious leaders, it is a state under a particular theocratic form of government advocated by some Muslim religious leaders in the Middle of Mauritania including the Honourable Minister of Mines and Industry, Monsieur Mohamed Ould Ismael Ould Abeidna; the Director of the Department of Mines, Monsieur Ibrahima Lamine Wane and other representatives from the Department of Mines. Also attending was Monsieur N'Daye Kane, the Governor of the Region of Inchiri, and their Excellencies, the Ambassador of Spain, the Ambassador of France, and the Honorary Counsel of Canada in Mauritania. Commenting on the untapped resource potential and business climate of Mauritania, John Hick, Chief Executive Officer of Rio Narcea stated "Mauritania is a large country with an abundant natural resource potential, but geological potential alone is not enough. There must also be an acceptable and reliable legal system in place, together with a supportive government, to encourage foreign companies. Rio Narcea is pleased to say that it has found this framework in Mauritania and would like to take this opportunity to compliment the Government of Mauritania for its foresight in creating a modern mining law and a very supportive mining department, which encourages the development of its resources." The Tasiast gold mine, which is expected to be in production in mid-2007, has measured and indicated resources of approximately 12.07 million tonnes averaging 3.06 g/t gold, or 1.19 million ounces. This resource includes proven and probable reserves within four proposed open pits of 9.01 million tonnes averaging 3.06 g/t gold, or approximately 886,000 ounces at a gold price of US$370 per ounce. In addition, Tasiast has inferred resources of 12.4 million tonnes averaging 2.25 g/t gold or approximately 899,000 ounces. Tasiast is forecast to produce approximately 120,000 ounces annually at a cash cost of approximately $220 per ounce during the first three years of operation. Over the current 8-year mine life based on the current reserves, Tasiast is forecast to produce an average of 105,000 ounces of gold annually at a cash operating cost of approximately $240 per ounce. The orebody is open at depth and the Company believes that there is good potential to extend the mine life beyond the current eight years. With the commencement of construction at the Tasiast mine site, the Company will be renewing its regional exploration efforts within the 312 km2 exploitation license encompassing the Tasiast project. In addition, it expects to pursue exploration of the more than 17,000 km2 of exploration licenses in due course. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Some statements in this press release contain forward-looking information. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected. Rio Narcea Gold Mines, Ltd. (TSX:RNG) (AMEX:RNO) |
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