Miramar posts $32-million loss in 2004

Vancouver – Termination of its Yellowknife gold operations caused Miramar Mining (MAE-T) to book a significant loss for 2004.

The company was over $32 million in the red last year due primarily to closure costs incurred at its Con and Giant mines in the Northwest Territories.

Prompted by dropping production and performance, the company ceased operations at Con and Giant, which produced almost 16,000 oz. of gold their final year, off significantly from output of over 89,000 oz. in 2003. Revenue from gold sales dropped over 82% to $7.6 million in 2004 versus the $42.6 million banked the prior year.

Miramar’s future now lies in its Hope Bay gold project, located near Bathurst Inlet, Nunavut. A feasibility study is on track to be completed by late-2006.

Hope Bay consists of three main gold deposits, Boston, Doris and Madrid, all hosted within a major greenstone belt.

Miramar plans to initially develop the Doris North area of its Doris deposit. Plans call for a small-scale, high-grade operation to initiate significant cash flow. Production is estimated at 155,000 oz. of gold annually over two years at very low cash costs (US$109 per oz.). Doris North will serve as a springboard allowing subsequent development of the other deposits with minimal share dilution.

The second phase development plans will see expansion of production from higher-grade, more accessible portions of Boston, Doris and Madrid. Targeted output of about 200,000 oz. gold annual is envisioned.

The longer term, phase three plan foresees output expansion from the larger Madrid deposit along with the remainder of Boston and Doris. Miramar looks to generate sustained gold production in the order of 350,000-400,000 oz. annually.

The company’s development plans at Doris North suffered a set-back in mid-2004 following a Nunavut Impact Review Board (NIRB) decision delaying project permitting. Miramar recently made a new submission to NIRB who’ve recommended the project should be reviewed under Part 5 of the Nunavut Land Claims Agreement.

Extensive 2004 drilling has led to a revised resource estimate at Madrid, adding over one million oz. of contained gold to the project. Indicated resources now stand at 4.7 million tonnes grading 5.5 grams gold per tonne (a 48% boost to 838,000 contained oz.) using a 3 grams per tonne cut-off grade. Additional inferred resources of 15 million tonnes at 5.4 grams gold (a 38% boost to 2.6 million contained oz.) have been calculated with the same cut-off grade.

The Hope Bay project has total measured and indicated resources of 6.9 million tonnes averaging 9.6 grams gold (2.1 million oz. contained). Additional inferred resources are 19.2 million tonnes at 7 grams gold (4.3 million oz. contained).

The company also recently completed the sale of its option rights at the Back River gold project in Nunavut. The option to acquire 60% interest in the project from Kinross Gold (K-T) was assigned to Dundee Precious Metals (DPM-T) for about $10 million.

Miramar has 160-million shares outstanding giving a $200-million market capitalization at its recent trading level of $1.25 per share. The company’s shares have seen a trading range of $1.11-2.50 over the past year.