Red Backs gold reserves at Chirano up 33%

Vancouver – An updated estimate for Red Back Minings (RBI-T) Chirano gold project in Ghana has increased the open pit ore reserves by 33%.

The estimate put measured and indicated open pit resources at 36 million tonnes grading 1.8 grams gold per tonne. A 2004 bankable feasibility study had estimated resources at 29 million tonnes grading 2 grams gold; the new estimate ups the contained gold from 1.8 million oz. to 2.2 million oz. Of the resources, 28 million tonnes are considered open pit reserves, with an average grade of 1.6 grams gold for contained gold of 1.5 million oz.

Red Back moved up 18 on the news, to close at $5.64 on July 4th trading.

The new estimate is based on 49,000 metres of combined reverse circulation and diamond core drilling completed over the last three years, during which time Red Back brought Chirano into production.

In October 2005 the Chirano gold mine achieved its first gold pour. The mill has been operating as 2.5 to 2.6 million tonnes per year since December 2005, and produces 123,000 oz. gold annually on average.

Current operating plan calls for material to be mined from 11 different deposits along a 9-km elongated mineralized zone. Several of the deposits remain open at depth and Red Back is investigating the feasibility of adding underground operations to the project. The Akwaaba deposit, for example, has an established underground resource and a scoping study is underway for a shallow underground operation there in the near future.

The project is owned 100% by Chirano Gold Mines, of which Red Back owns 90%. The remaining 10% interest is held by the government of Ghana.