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Siana Bankable Feasibility Study shows cash flow of US$228 million and an IRR of 38%

Monday, July 20th, 2009

The Red 5 Limited board has approved the Siana Joint Venture open pit and underground bankable feasibility study using a base case gold price of US$800 per ounce. Cash flows are pre-tax pending finalisation of tax benefits applicable to mineral developments in the Philippines.
During the mine life, and based on reasonable assumptions of Inferred Resource conversion into the mine plan during underground mining, production from known resources is forecast to reach 849,000 ounces over a ten year operating mine life at a cash cost of US$351 per ounce.
Funding requirement to sustainable positive cash flow is forecast at US$72.5 million, comprising US$56.5 million in capital development to first gold pour, weighted capital contingency of US$6.0 million and working capital for the first six months of operation of US$10.0 million. Underground development expenditure will be funded from cash flow. Total life of mine costs, including capital, average US$473 per ounce.
The Ore Reserve is estimated to 400 metres vertical and the Mineral Resource to 500 metres vertical. The orebody remains open at depth and to the north and south. Not included in the Resource data base is SMDD 135 intersection 3 metres at 31.6 g/t gold at 220 metres vertical and accessible from early underground development, and SMDD134 intersection 5 metres at 25.4 g/t gold, 48 g/t silver and 2.4% zinc – the deepest northern orebody intercept.
At the recently granted Mapawa MPSA, approximately 30 km north of Siana, there is historic evidence of near surface mineralisation with potential as a future ore source for Siana.
For further information visit: www.red5limited.com

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