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Re: News Releases - Friday, March 14, 2008
Mundoro Announces Corporate Update and Financial Results for 2007
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VANCOUVER, BRITISH COLUMBIA--(March 14, 2008) - Mundoro Mining Inc. (TSX:MUN) (the "Company") is pleased to announce a corporate update and the filing of the Company's financial and operating results for the year ended December 31, 2007.
Robert van Doorn, Mundoro President and CEO commented "In 2007 Mundoro continued to increased the awareness of the Maoling Gold Project with stakeholders and progressed the feasibility study. The Company spent a major effort in getting more stakeholders comfortable with the development plan for a state of the art large open pit mine at Maoling. The feasibility study conducted with Ausenco Ltd, focusing on the processing design, and Golder Associates, on mine design and environmental issues, has been substantially completed. In the fourth quarter of 2007, Gold Fields Mineral Services announced that China became the largest gold producing country in the world, surpassing long-time champion South Africa. Foreign participation in gold mining in China remains possible as is shown by the commissioning of three gold mines constructed by Foreign-Chinese joint-ventures, and the Company believes it can be part of this growing production profile. To complement these efforts, we propose to restructure the Company to better utilize our resources."
Financial Highlights for 2007 (all numbers in U$)
As an exploration and development company, Mundoro's consolidated net loss for the year was $6,437,128 or $0.17 per share compared with a net loss of $6,911,414 or $0.18 per share for the previous year. The net loss is attributable to:
- expending $1,267,079 on engineering and exploration;
- expending $2,565,466 on corporate expenses;
- earning interest income of $855,954; and
- expending $3,460,537 on non-cash items.
The Company ended the year with $18 million in cash and no long term debt. The financial results provided in this release should be read in conjunction with the Company's year-end financial statements and Management Discussion and Analysis, which are available on SEDAR at www.sedar.com. All dollar amounts are in U.S. dollars unless otherwise stated.
Maoling Project Update
Progress on the Feasibility Study
The western engineering companies engaged in the feasibility work: Golder Associates ("Golder") for resource modeling and estimation, mine and tailings facility design, hydrology and geotechnical studies; and Ausenco International Pty Ltd. ("Ausenco"), for managing the overall feasibility study and for process design and engineering have substantially completed their work. Completion of the feasibility is awaiting the restoration of the business license. The Company has streamlined the Environmental and Social Impact Assessment ("ESIA") process by retaining Beijing General Research Institute of Mining and Metallurgy ("BGRIMM") to assist with environmental planning and evaluation. Golder and BGRIMM have been coordinating their efforts on the ESIA. The China Nonferrous Engineering and Research Institute ("ENFI") also based in Beijing is engaged to complete the Chinese feasibility work.
Because of the delays in the renewal of joint venture company's business license, certain portions of the feasibility study, such as geotechnical drilling for the final pit slope design and final Chinese cost estimations, cannot be completed at this stage. It is anticipated that once the joint venture company's business license has been renewed, Mundoro will complete the remaining engineering work needed to produce a feasibility study that will be NI 43-101 compliant as well as completing a full ESIA for Maoling.
Licensing and Government Relations
Mundoro continues to document and convey the economic and environmental merits of the Maoling Project to the municipal, provincial and national levels of the government in China. The technical merits of the Maoling Project are well documented in the Pre-feasibility Study completed in 2005.
The Company continues to advocate the benefits of development of a modern mine at Maoling which will serve as a showcase in modern mine management methods including environmental protection. Some of the developments:
- Over the last two years the Company has been explaining the mining plan for the Maoling Project and building confidence with officials in Liaoning province and the central government.
- The Company still has the strong support of our Chinese partner, Aidi, with whom we have been working diligently in explaining the merits of the project at the various levels of provincial authorities.
- The Company continues to work with the City of Yingkou and its Municipal People's Congress. The development of the Maoling Project is an integral part of Yingkou's plans for economic development, with a view to build sustainable wealth for that region
- The Maoling Project still meets China's guidelines for foreign participation in gold projects.
- An independent report by Qinghua University in Beijing and the analysis completed to date by ENFI, BGRIMM, Ausenco and Golder indicate the deposit can be developed in a safe and responsible manner that will have no detrimental impact on the water quality for the local region.
- The Company is committed to the World Bank's Equator Principles and adheres to international and Chinese national standards for mining.
- Mundoro has the financial resources to complete the ESIA process and to commence the development process for the Maoling Project. Societe Generale was engaged in 2006 for financial advisory services for funding alternatives for the construction of a gold mine at Maoling.
As of March 2008, the Vice President of Mundoro's operations in China, Patrick Powers, will be transitioning from Vice President to focus on his role in building the awareness of the Maoling Project among Chinese stakeholders as an active director of the joint venture company.
Sustainable Development and Community Relations
Mundoro has a continuing community development program in the area of its Maoling Project. In 2007, Mundoro contributed RMB 1.2 million, to be spent over a three year period to fund educational, health and sanitation development in Gaizhou County (where Maoling is located), based on an agreed upon expenditure plan between Gaizhou and Mundoro.
Corporate Reorganization
The Company believes it has strong financial resources and management capabilities that can be redeployed to build new shareholder value. While maintaining its focus on the development of the Maoling Project, Mundoro is proposing to restructure the Company to be able to better pursue opportunities that can enhance shareholder value and address the current undervaluation of its interest in the Maoling Project. The Board of Directors and executive management have proposed a plan of arrangement (the "Corporate Reorganization") to be considered for approval by shareholders at the Annual General and Special Meeting on April 11, 2008.
The Corporate Reorganization will provide shareholders with the ability to continue to benefit from the development of the Maoling Project and at the same time benefit from the years of specialized capital markets experience of the executive management team to evaluate resource opportunities and utilize the cash in the Company to invest in resource opportunities to bring value to shareholders.
As a result of the Corporate Reorganization, shareholders would exchange their existing shares in Mundoro Mining Inc. for shares in Mundoro Capital Inc., a newly formed company for completing the plan of arrangement. This exchange will result in Mundoro Mining, which holds the Maoling Project assets in Liaoning, China, to become a wholly-owned subsidiary of Mundoro Capital Inc.
Mundoro Capital will carry on the business of a mineral exploration, development and investment company. The primary focus of Mundoro Capital will be to continue the development of the Maoling Project and the government relations activity in China to renew the business license to increase the value of the Maoling Project. Management believes the Maoling Project could become the largest gold mine in China and an example of international cooperation in project development in the mining sector in China. Mundoro will be opportunistic with respect to taking an interest in other projects in China either through the current joint venture or through the development of other joint ventures in China.
The other focus of Mundoro Capital will be to evaluate and invest in new resource opportunities using management's years of specialized experience in the capital markets focused on evaluating exploration and production assets, resource investment opportunities and structuring transactions for investments in the resource sector. The objective of future resource investments will be to invest in assets or companies in the natural resources field which can create value for Mundoro Capital and its shareholders.
The Board has unanimously recommended that shareholders approve the proposed plan of arrangement as outlined in the Information Circular. Completion of the arrangement, pending the outcome of a shareholder vote and court regulatory approvals, is expected to occur in the second quarter of 2008. For further information regarding the Corporate Reorganization, please see the Management Information Circular filed on March 14, 2008.
About Mundoro Mining Inc.
Mundoro Mining Inc. is a TSX listed resource company focused on the exploration and development of one of the world's top gold deposits. The Company's feasibility stage Maoling gold deposit is located in Liaoning Province, China. Maoling is China's largest single, gold resource deposit with 4.8 million contained gold ounces in the Measured and Indicated category and an additional 4.4 million contained gold ounces in the Inferred category. The Company has outlined a Reserve of 2.8 million ounces in the Probable category which was the basis for the Pre-Feasibility Study.
The Company has a 79% interest in the project through a Sino-Foreign co-operative joint venture with the corporate arm of the Liaoning provincial government. Thus far, two deposits that outcrop at surface have been outlined at Maoling in which disseminated, free-milling gold mineralization occurs within a sequence of metasedimentary rocks.
The renewal of the exploration license for Maoling has been deferred since November 2005 pending the renewal of a business license for Mundoro's joint venture company, Liaoning Tianli Mining Company Ltd. Mundoro and its partner, Liaoning Aidi Resources Company Limited, have undertaken a strategy of engagement and building awareness with a wide range of government agencies in order to resolve the issue.
Investors are encouraged to review 'Risk Factors' associated with the Maoling project as outlined in the Company's prospectus documents and other regulatory filings, available on the SEDAR website at www.sedar.com.
The pre-feasibility described herein was prepared to broadly quantify the Maoling Zone 1 deposit's capital and operating cost parameters, and to further the development of the project. It was not prepared for use as a valuation of the deposits, nor should it be considered to be a final feasibility study. The information contained in the Study reflects various technical and economic conditions at the time of writing that can change significantly over relatively short periods of time. There can be no assurance that the potential results contained in the Study will be realized. The study was prepared by AMEC Americas Ltd. under the direction and oversight of Mr. Mark Pearson P.Eng. of Vancouver, BC, an 'Independent Qualified Person' as defined by National Instrument 43-101. Resource estimation for the Zone 1 area in 2006 was carried out in the Brisbane, Australia office of Golder Associates Pty Limited, an international earth sciences consulting group under the direction and oversight of Dr. Andrew Richmond, MAusIMM, an 'Independent Qualified Person' as defined by NI43-101. NI43-101 compliant technical reports for the pre-feasibility study and all reserve and resource estimates have been filed on the SEDAR website at www.sedar.com.
The statements herein that are not historical facts are forward-looking statements. These statements address future events and conditions and so involve inherent risks and uncertainties, as disclosed under the heading "Risk Factors" in the company's periodic filings with Canadian securities regulators. Actual results could differ from those currently projected. The Company does not assume the obligation to update any forward-looking statement.
FOR FURTHER INFORMATION PLEASE CONTACT:
Mundoro Mining Inc.
Robert van Doorn
CEO & President
(604) 630-3593
OR
Mundoro Mining Inc.
Teo Dechev
CFO & Vice President, Corporate Development
(604) 630-3591
OR
Mundoro Mining Inc.
Ben Chow
Investor Relations
(604) 630-3587
Email: info@mundoro.com
Website: www.mundoro.com
The TSX has neither approved nor disapproved of the information contained herein.
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Copyright (c) 2008 MUNDORO MINING INC. (TSX-V:MUN) All rights
reserved. For more information visit our website at
http://www.mundoro.com/ or send mailto:info@mundoro.com
Message sent on Fri Mar 14, 2008 at 11:13:09 AM Pacific Time
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