NI 43-101 Techical Reports Filed For Pinson Underground
GOLDEN, CO - Atna Resources Ltd. reported that new NI 43-101 Technical Reports were filed for the Pinson-underground, Reward and Briggs gold properties during the quarter, updating resources, reserves, economics and mine plan outlooks.
A proven and probable ore reserve of 1.7 million tons at an average grade of 0.369 ounces per ton, containing 644,600 ounces of gold was declared for the Pinson-underground project.
Development of the underground mine at Pinson progressed in the Second Quarter 2012 with completion of the secondary access in July, hiring of key staff, mobilization of an additional contractor crew, and rehabilitating existing underground workings.
On June 20, Pinson shipped 1,553 tons of oxide ore to a third-party processor for a trial process run. Pinson netted approximately $0.6 million from this sale, which will be credited against development costs.
On June 22, the Company submitted a request for modification of Pinson's existing Water Pollution Control Permit to the Nevada Division of Environmental Protection to allow an increased rate of mining of up to 400,000 tons per year of ore.
The new Technical Report for Reward increases mine life by two years over the prior estimate. The project is now expected to have a six year life producing at an average annual rate of approximately 35,000 ounces, producing a projected net present value (NPV) of $100 million, using a gold price of $1,500 and a discount rate of 5%.
Outlook and Strategy
The Company expects the gold market to remain robust in 2012 and the foreseeable future. Atna therefore plans to continue executing upon the strategy of developing its portfolio of advanced-stage growth projects primarily using the cash flow from existing mines. In 2012, the Company plans to develop the underground mine at Pinson and bring it into production, principally using the cash flows from Briggs. Once Pinson has achieved positive cash flow, the cash generated from both Briggs and Pinson will be used to strengthen Atna's balance sheet by reducing debt and accumulating cash. This strategy will provide the opportunity for funding the sequential development of Reward and future projects in a measured and controlled manner.
Atna generated net income of $2.0 million, $0.02 per basic share, in the Second Quarter 2012. Income before income tax was $2.1 million. Net cash provided by operating activities in the Second Quarter 2012 was $3.4 million. As of quarter-end, cash and cash equivalents were $8.4 million. Gold sales for the Second Quarter 2012 totaled 8,493 ounces, inclusive of a bulk-sample sale by Pinson, or 9% less than in First Quarter 2012, but 10% higher than Second Quarter 2011. Briggs produced $4.9 million in operating cash flow and $3.4 million of income before tax in the Second Quarter 2012.