First Gold Production at Nalunaq Gold Mine

Angel Mining plc (the "Company")
AIM: ANGM

Highlights

• Gold has been poured for the first time at the Nalunaq gold mine;
• Initial production is being achieved by using gravity separation;  
• The permit has been granted for the first gold export;
• Permit application is progressing for the Company to use a cyanide circuit, which is expected to increase gold recovery to over 90%;
• Cash generated from the ongoing production of gold will help fund development of the Black Angel lead and zinc mine.

The Board of Angel Mining, the Greenland focused mining company, is pleased to announce that production has commenced at its Nalunaq Gold Mine.  

The Company acquired the mining assets of Nalunaq Gold Mine A/S on 1st July 2009 for US$1 million and a further US$500,000 was paid in October following the approval of the Greenlandic authorities to grant a mining licence to the Company’s wholly owned subsidiary, Angel Mining (Gold) A/S (“Angel”).  

Since completing the acquisition, Angel has designed an underground process plant, sourced the components, built an in-mine chamber, constructed foundations, installed and commissioned the plant to enable this initial production to take place.

The process plant comprises a gravity separation circuit, which is now operational and a Carbon in Pulp (“CIP”) circuit, which is still under construction.  The gravity section is expected to recover approximately 50% of the available gold, and the tailings will be reprocessed, once the CIP circuit is available.  Subject to the granting of permits, the plant is scheduled to be fully operational by April, with overall gold recovery ultimately being in excess of 90%.  

Building a complex process plant inside the mine is not unique but it is very unusual.  The additional capital investment is justified by the fact that the Company will be able to comply with the most stringent environmental controls and will be able to optimise operational efficiency, which should result in a relatively low cash cost of production.

The output will be in the form of doré bars comprising approximately 90% gold and 10% silver.  
 
The Company has recruited a team of local Greenlanders and is training them to operate both the mining and processing equipment.  A stock pile of ore has been built up and this will be depleted as the rate of mining increases.  Production rates are expected to reach 15,000 ounces by the end of 2010, growing to 25,000 to 30,000 ounces per year thereafter.

Angel Mining is focused on developing its projects in Greenland and will benefit from increased cashflow as it ramps up production at Nalunaq.  The near term positive cashflow from Nalunaq will help to fund the development of the Black Angel zinc and lead mine where work on the construction of the upper cable car terminal has already recommenced.

Angel Mining CEO Nicholas Hall commented -

"We are delighted to have reached this major milestone. During the last few weeks we have had to overcome a number of ‘teething problems’ to get the plant fully operational and there is still more work to be done before we achieve optimal performance.  Building the complex process plant inside the mine demonstrates the growing operational ability of our team and we now look forward to focusing on the re-start of the Black Angel zinc and lead mine. Today is an important step as the Company strives to become a significant multi-commodity producer focused on opportunities in Greenland."

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