VANCOUVER, BRITISH COLUMBIA--(Marketwired - Apr 29, 2013) - Elgin Mining Inc. ("Elgin Mining" or the "Company") (ELG.TO)(TSX:ELG.WT) announces that the Company has taken and will continue to undertake the following steps in order to effectively manage the Company's treasury in light of the current market turbulence and weakening of the price of gold:
- The Lupin Gold Project capital and operational development budget has been significantly curtailed with expenditures being reduced by approximately $5.3 million for 2013. The camp has already been shut down. Work will continue, where necessary to ensure all permits are kept in good standing. The camp and infrastructure are in excellent condition, which will allow re-opening in an expeditious manner. It must be emphasized that should the gold price strengthen and there are more favourable capital markets, there is every opportunity to re-commence development of the Lupin Project and re-start operations along the original timelines;
- Corporate general and administrative expenses have been reduced by over $1 million for the remainder of the year through reduction in employee and consultant costs, in travel and marketing costs and discretionary or non-essential expenditures;
- Reduction in Bjorkdal sustaining capital expenditures of $2.4 million for the remainder of 2013; and
- Reduction or elimination of all regional exploration programs.
The Company will continue to focus on the ongoing operational improvements at the Bjorkdal Gold Mine in Sweden. Delivery of the equipment to allow the transition from contractor mining to owner operated mining in the underground mine has now commenced and this will facilitate the optimization of both the short and long term mine plan, and ultimately reduce the operating costs.
The in-house study to expand the Bjorkdal mill will continue as the Company believes this to be the next building block in expanding production and reducing on-going operating costs. Accordingly, the Company will continue to drill the planned holes, both up-dip and down-dip of the newly discovered Lake Zone.
Further the Bjorkdal Mine offers significant flexibility in the operating plan should gold prices weaken further. With the combination of open pit, a shallow underground operation and significant low cost stockpiles, the mine plan can be optimized to reduce cash costs accordingly.
Commenting on the above, Patrick Downey, President and Chief Executive Officer, stated: "We believe that the Company has taken prudent steps to reduce capital and operating expenditures in an expeditious manner in this uncertain and challenging gold price environment. We have taken measures to preserve our treasury and ensure that the Company remains on a strong financial footing."
Elgin Mining Inc.
Elgin Mining is a Canadian-based company focused on production at the Bjorkdal gold mine in Sweden, which surpassed its first millionth ounce of gold production in 2010. In addition, Elgin Mining's portfolio includes the Lupin gold project and the Ulu gold project, both located in Nunavut, Canada, a 29.5% interest in Auracle Resources Ltd., which is exploring the Mexican Hat property in Arizona, an exclusive right and option to earn a 60% interest in Lincoln Mining Corporation's Oro Cruz (California) and La Bufa (Mexico) gold projects and an option to earn a 60% interest in North Arrow Minerals Inc.'s Contwoyto gold project located adjacent to the Lupin gold mine in Nunavut, Canada. Elgin Mining also selectively reviews opportunities to add advanced stage development projects to its portfolio. The Company has a strong balance sheet, generates cash flow from gold sales, and remains un-hedged.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This news release contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking statements, including any information as to the Company's strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend," "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.
These factors include risks relating to variations in the mineral content within the material identified as mineral reserves and mineral resources from that predicted, changes in development or mining plans due to changes in logistical, technical or other factors, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices and currency exchange rates, possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate resources, changes in project parameters as plans continue to be refined, changes in project development and production time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, successful completion of proposed acquisitions, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes as well as those risk factors discussed or referred to in the Company's Annual Information Form dated March 22, 2013, a copy of which is filed on SEDAR 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 statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the exploration and development plans and objectives and may not be appropriate for other purposes.