| September 29, 2008 |
| Cadiscor: Positive Scoping Study on Discovery |
MONTREAL, QUEBEC--(Marketwire - Sept. 29, 2008) - Cadiscor Resources Inc. ("Cadiscor" or "the Company")(TSX VENTURE:CAO)(FRANKFURT:DQN) is pleased to announce results of the Scoping Study (the "Study") (referred to as a Preliminary Assessment under 43-101) for its 100% owned Discovery Gold Project in northwestern Quebec. The Study was prepared by InnovExplo Inc. of Val-d'Or. The Study concludes that the project could generate a positive cash flow given certain assumptions. The total income generated by the Discovery Project before taxes is $17.2 million, with a NPV of $11.5 million at a discount rate of 5% and an internal rate of return (IRR) of 27%. InnovExplo considers that an IRR of 27% is sufficient to move forward with the project, considering that only a small part of the resources was used in the study and that these resources were established with cut-off grades reflecting a gold price at US $650/oz. While Phase I has a negative IRR, Phase II, the development and pre-production phase, generates an IRR of 100%.
The Study recommends that a first phase consisting of an underground exploration program be undertaken, including extraction of a 36,000-tonne bulk sample and an underground drilling program to add new resources and upgrade the existing resources categories. A second phase would include a pre-production period to develop the underground infrastructure required to mine the deposit, followed by production from the currently-known resources, without taking into consideration the resources added and/or upgraded during Phase I underground exploration.
Michel Bouchard, President and CEO of Cadiscor, stated, "The Scoping Study results are very encouraging, and Discovery continues to prove to be a project we can build on. We have been exploring and drilling Discovery for the past two years, with each drilling program resulting in increased resources. InnovExplo recommends going underground with Phase I as a next step, in order to increase confidence in resource continuity and grade through additional drilling and underground bulk sampling. We agree with their recommendation, and will now begin the environmental base line study and preliminary permitting process on the Discovery project."
Only 37% of the Measured and Indicated resources and 9% of the Inferred resources were used in the Study. Successful upgrading of the mineral resources to mineral reserves by definition drilling and a prefeasibility study would imply a total mine life of seven years if all mineral resources were to be converted in mineral reserves, for an annual production of 44,000 ounces of gold at a mill throughput rate of 245,000 tonnes per year.
Total Phase I costs are $23.1 million, with capital expenditures of $16.3 million. The net program cost is $7.8 million after revenues from the bulk sample of $6.1 million and exploration credit of $9.2 million.
In Phase II, capital expenditures for the development and pre-production of the mine will amount to $18.4 million, and revenues will total $103.2 million. In Phase II, the NPV at a discount rate of 5% is $20.8 million with a cash flow of $25 million and an IRR of 100%.
For the two phases, the total income generated by the Discovery Project before taxes is $17.2 million, with an NPV of $11.5 million at a discount rate of 5% and an internal rate of return (IRR) of 27%.
The highlights of the Study are as follows:
- The Mineral Resources of the Discovery project were based on the results of 327 holes (122,360 metres) drilled by Cadiscor and other companies.
- The resources considered in Phase I and II of this study amount to 470,889 tonnes @ 6.67 g/t Au for the Indicated category, and 135,364 @ 10.1 g/t Au for the Inferred category.
- The cut-off grades of the project were calculated on the basis of 673,991 tonnes milled. For the long-hole stopes, a cut-off of 4.00 g/t was used. For shrinkage stoping, a cut-off of 5.00 g/t was used to reflect higher mining costs.
- InnovExplo recommends a first phase consisting of an underground exploration program to confirm the mining methods and upgrade the resources by drilling the known zones. At the same time, a bulk sample will be taken from two stopes on two different levels to confirm several parameters: metallurgy, grade, dilution, recovery, etc.
- The Inferred Resources will likely be upgraded by the proposed drilling program and will allow a development decision to be made regarding the deepening of the shaft in the second phase. Additional tonnage in the vicinity of the proposed infrastructure could minimize both the capital and operating per-tonne costs. As a result, the cut-off grade would also decrease, and additional tonnage below the current cut-off grade would become economic.
- The production target is 700 tonnes per day, seven days a week, for 245,000 tonnes per year, at an average diluted gold grade of 6.35 g/t. The average annual output is estimated at 44,000 ounces of gold.
- After mining and milling recoveries, 132,010 ounces will be produced during Phase I and II. The duration of Phase I will be thirty months, and Phase II will take three years. Phase I and II are separated by a one-year interim period during which the preparatory work for Phase II will be completed, as well as a pre-feasibility study.
- For the base case financial analysis, a gold price of $850/oz was used for the first five years and $750/oz for the last year. The Canadian dollar and the US dollar were considered to be at par (i.e., a constant exchange rate of US $1.00/CDN $1.00).
- A gold recovery of 96.0% was used for the purpose of the analysis based on the results of metallurgical testing.
- Operating revenues are estimated at $117,970,790 for Phases I and II. Operating costs average $98.61 per tonne of ore milled, or US $503/oz over Phase II of the project. Total operating expenditures, including stope development, amount to $66,462,540.
- Total capital expenditures, including deferred development, amount to $34,695,621.
- Not all the resources were used for the Phase II mining scenario: 811,193 tonnes @ 5.21 g/t Au in the Measured and Indicated categories and 1,410,136 tonnes @ 5.53 g/t Au in the Inferred category remain available.
- The Sleeping Giant Mine and Mill acquisition will allow ore from all properties to be milled, including Discovery.
This Scoping Study is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Therefore, there is no certainty that the preliminary assessment will be realized.
The mineral resource estimate, scoping study and technical report compliant with 43-101 Regulations were prepared by Carl Pelletier, B.Sc., P.Geo., of InnovExplo, a exploration and mining consulting firm based in Val-d'Or. Mr. Pelletier is a qualified and independent person as defined by 43-101 Regulations.
Mr. Vincent Jourdain, P.Eng., Ph.D, is the qualified person as defined by 43-101 Regulation and has over 20 years of experience in mineral exploration. Mr. Jourdain has approved the content of this press release.
Forward-Looking Statements
This press release contains forward-looking statements subject to certain risks and uncertainties. There can be no assurance that these statements will prove to be correct, and actual results and future events could differ materially from those implied by such statements. These risks and uncertainties are discussed in the annual report filed with the securities commissions of Alberta, British Columbia and Quebec, and in the 10-KSB annual report filed with the US Securities and Exchange Commission. The Company does not undertake to publicly revise or update any such statements on the basis of new Information, future events or any other event.
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