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KBL Mining Ltd, Operations and Strategy Update

The Directors of KBL Mining Limited (ASX:KBL) (“KBL” or the “Company”) have undertaken a review of the Company’s operations in light of recent volatility in metal prices, weakness in the capital and equity markets, and performance of the Mineral Hill Mine. Cost reductions have been implemented at the Mineral Hill operation and across the Company.

Arising out of this review the Board has recast the Company’s strategy as outlined below.

Mineral Hill Mine

Since commissioning Mineral Hill some 12 months ago, production has gradually improved, however, planned targets have not been consistently achieved.

The shortfall has been mainly due to a combination of poor recoveries from the Parkers Hill ore, mined ore grades being below estimates and decline development delays (and associated costs) in gaining access to Red Terror stopes. Since access to the Red Terror ore, performance in the processing plant has been above budget. Currently mining is focussed on the Red Terror lodes and, we expect production to be cash flow positive over the next 3 months.

Drilling has continued to outline additional lodes in the Red Terror zone that are progressively gold-enriched as the lodes are traced to the north. Initial metallurgical testwork has indicated that gold recoveries exceeding 70% can be achieved by flotation while still retaining high copper recoveries (plus 85%). This process is now being trialled at the Mineral Hill plant with the expectation that gold-copper ores can be treated without requiring the introduction of a new separate gold recovery circuit and its associated capital cost.

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