|May 14, 2012|
Elgin Mining Reports First Quarter 2012 Results
|Vancouver, British Columbia, May 14, 2012 -- Elgin Mining Inc. ("Elgin Mining" or the "Company") (TSX: ELG) released today financial results for the first quarter of 2012. The Company's unaudited interim consolidated financial statements for the quarter ended March 31, 2012 and 2011 and notes thereto, along with its Management's Discussion and Analysis are available at www.sedar.com and www.elginmining.com. Unless otherwise noted, all financial information is expressed in U.S. dollars.|
Highlights During and Subsequent to the First Quarter of 2012
Effective May 1, 2012, the Company acquired all of the issued and outstanding common shares of Gold-Ore by way of a plan of arrangement. In exchange for each Gold-Ore common share, the Company issued one common share and one-half of one common share purchase warrant at an exercise price of Cdn$1.30 per common share exercisable until May 1, 2014. As a result of this transaction, a total of 85,842,309 common shares and 42,921,154 common share purchase warrants of the Company were issued.
Holders of 5,076,250 outstanding Gold-Ore stock options at the effective closing date of the arrangement received Company replacement stock options on a one-for-one basis, having the same terms and conditions as the Gold-Ore stock options replaced.
Gold-Ore is the owner of the Bjorkdal gold mine which has operated for over twenty years and in 2010 surpassed one million ounces in historical gold production. The gold mine is located in the prolific Skelleftea mining district in northern Sweden, providing the mine with the advantages of excellent infrastructure, a well-trained and knowledgeable local workforce, and supportive communities with a strong mining tradition.
The mine is a combined open pit and underground operation with a surface mill that produces four gold concentrates that are sold to nearby smelters. The mine has excellent exploration upside with the main ore body open in several directions and at depth.
With the completion of the Gold-Ore acquisition, the Company is now a stronger international gold company operating in politically safe jurisdictions with a solid portfolio of gold assets in the exploration, development and producing stages. The Company's short-term strategy is to optimize the operations of the Bjorkdal mine to help fund the capital requirements for the expedited restart of the past-producing Lupin mine.
Bjorkdal Gold Mine
Management intends to focus its efforts on improving the gold production, cash costs and cash flow production from the Bjorkdal mine by examining the mining methods and procedures for potential operational improvements which may include:
The Company intends to aggressively advance Lupin towards a restart of production in the first half of 2014. In working towards this goal, the Company:
For Ulu, the Company intends to commence a regional exploration program at the Ulu gold deposit and to complete limited in-fill and step-out drilling on the Flood zone to better define this deposit.
Patrick Downey, President and CEO, commented, "We are pleased by the overwhelming support shown by the shareholder groups of both Elgin Mining and Gold-Ore in approving the combination of the two companies. We believe the cash flow generation by the Bjorkdal mine will accelerate the development of Lupin by providing a meaningful source of funding for the mine restart. We are focused on optimizing the Bjorkdal mine's operations and driving forward diligently to meet our stated goal of restarting gold production at Lupin by the first half of 2014."
Ms. Vivian Park, P.Geo., the Manager, Exploration of the Company and a Qualified Person as defined by NI 43-101, has reviewed and approved of the written technical disclosure contained in this news release.
Elgin Mining Inc.
Elgin Mining is a Canadian based company focused on production at the Bjorkdal Gold Mine in Sweden, which has produced 1,060,000 ounces in the last 24 years, and the exploration and development of the Lupin gold mine and Ulu gold project, both located in Nunavut, Canada. In addition, Elgin Mining's portfolio includes a 35% interest in Auracle Resources, which is exploring the Mexican Hat property in Arizona, and an exclusive right and option to earn a 60% interest in Lincoln Mining's Oro Cruz (California) and La Bufa (Mexico) gold projects. Elgin Mining also selectively reviews opportunities to add advanced stage development projects to its portfolio. The Company has a strong balance sheet, generates significant cash flow from gold sales, and remains un-hedged.
For further information, please visit the Company's web site at www.elginmining.com.
Elgin Mining Inc.
President and Chief Executive Officer
Tel: (604) 682-3366 / Fax: (604) 682-3363
Certain information set forth in this press release contains "forward-looking statements", and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of Elgin Mining's future plans and operations and are based on Elgin Mining's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects" "anticipates", "believes", "projects", "plans", and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Elgin Mining's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. 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. Elgin Mining undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
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