SRA to Place MTZ Mining Complex on Care and Maintenance
Thu Oct 9, 8:20 AM
ca.news.finance.yahoo.com
TORONTO, ONTARIO--(Marketwire - Oct. 9, 2008) - Strategic Resource Acquisition Corporation ("SRA") (TSX: SRZ.TO)(TSX: SRZ-NT.TO)(TSX: SRZ-NT.A.TO) announced that it will be initiating a temporary care and maintenance program at its wholly-owned Mid-Tennessee zinc mining complex (MTZ).
The decision follows an extensive evaluation of numerous scenarios and zinc pricing projections that leave little support for the continuation of operations under the current commodity pricing and credit market environments. Since production began at the Gordonsville mine in April 2008, cash costs per pound of payable zinc have been well above prevailing commodity prices. While the Company has advanced the ramp up of the Cumberland and Elmwood mines to within a few months of production start-up, the project is uneconomic at current zinc prices. A care and maintenance scenario will keep the mining assets in ready condition as the Company's management and board pursue funding and strategic alternatives towards a workable restructuring that may enable reinstating the project when zinc prices improve and funding becomes available. The processing plant and mine infrastructure are being prepared for the orderly suspension of all activities. Staff at the mine are being reduced to a level that will meet care and maintenance requirements while capital will be deployed for basic maintenance purposes such as dewatering of the underground areas.
SRA's management views the MTZ mining complex as being a substantial resource should full production be achieved.
"We intend to restructure our obligations and capital requirements to facilitate restarting the operations when prudent," commented Victor Wyprysky, President of SRA. "The Cumberland and Elmwood mines are well advanced towards start-up and we have taken Gordonsville further than it has ever produced historically. It is regrettable that the perfect storm in commodity and liquidity conditions have converged at this late stage of our ramp up."
SRA commenced mining at Gordonsville in April 2008 producing 15 million pounds of zinc and reaching a rate of over 3,000 tons per day. Over the past eighteen months, the Company has invested approximately $150 million in the completion of a major capital investment program that revived the former 29 year producer of zinc and germanium.
Cautionary Statement on Forward-Looking Information
This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects, the future price of zinc or other metal prices, the estimation of mineral resources and realization of mineral resource estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits and future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of regulatory matters. These statements reflect management's current beliefs and are based on information currently available. Forward-looking statements involve significant risks, uncertainties and assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including those listed in the "Risk Factors" section of the Company's prospectus on file with Canadian provincial securities regulatory authorities.
For further information, please email info@sra-corporation.com.
Contacts
Victor P. Wyprysky
Strategic Resource Acquisition Corporation
President and Chief Executive Officer
(416) 861-0430 ext. 1833
Email: victor.wyprysky@sra-corporation.com
Ian M. MacNeily
Strategic Resource Acquisition Corporation
Executive VP and Chief Financial Officer
(416) 861-0430 ext. 1422
Email: ian.macneily@sra-corporation.com
Donna Yoshimatsu
Strategic Resource Acquisition Corporation
VP Investor Relations & Communications
(416) 861-0430 ext. 1003
Email: donna.yoshimatsu@sra-corporation.com
Website: www.sra-corporation.com |
