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Axmin soars after securing 25 year mining licence for Passendro Gold Project

Published: 17:21 09 Aug 2010 EDT

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Shares in AXMIN (TSX-V:AXM) popped after the African focused gold developer announced that it had secured a 25 year mining licence for the Passendro Gold Project in the Central African Republic (“CAR”)

Passendro Gold is a company making project.

A feasibility study first released in April 2008 confirmed the potential to develop a circa 200,000 ounces of gold per annum gold mine with an average cash cost of US$379 per ounce.  The study was superseded by an updated study released in March 2009 which considered a 100,000 ounce per annum mine that cut the projected capital costs by 35% and doubled the mine life while generating an IRR of 26.6% and NPV (5% discount) of US$135 million. Both studies were based on a flat gold price of US$750 million and mining reserve of 1.3 million and 1.2 million ounces respectively.

Since then, the company has released an updated resource which boosted the measured and indicated resource by 30%.

The 25 mining licence awarded today covers the entire mineralization at Passendro, plus new 3 year renewable exclusive exploration licences over the Bambari 1 and 2 permits.  The area of exclusive exploration has also increased by a further 270 square kilometers.   As part of the mining licence, Axmin will pay US$11 million in three tranches to the CAR, and in lieu of any project free-carried interest to the CAR, will issue 26 million shares and 20 million five year warrants with an exercise price of 30 cents.

Not surprisingly, Axmin intends to start updating the Bankable Feasibility Study imminently.

"Now that the Mining Licence is in hand, I am delighted to inform our shareholders that we can proceed with the development of the Passendro Gold Project,” President and CEO, Mr. George Roach, commented. “This represents another positive step forward towards commercial production from CAR's first modern gold mining operation... we expect that the project will be that much more robust once it reflects the positive changes in the gold price and increases in reserves at Passendro."

Lieutenant Colonel Sylvain Ndoutingai, Minister of State to the Mines, Energy and Hydraulics for CAR  added: "The signing of the Mining Convention and Permit is an important milestone in the Country's policy to open its doors to international investment, in an effort to further develop CAR's vast mineral wealth. We are very pleased with the negotiated terms of the Mining Convention which ensures that the people of CAR benefit greatly for many years to come from the development of the Country's first modern gold mine."
 
Toronto based Axmin soared 44% on the news, and mark a significant milestone for the CAR too, as Axmin is seeking to build the country`s first modern gold mine. Axmin is active in a number of African countries, including Mali, Mozambique, Sierra Leone, Senegal, Zambia and the CAR.

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