Goldex - Commercial Production Achieved in Fourth Quarter 2013

The 100% owned Goldex mine in northwestern Quebec began operation in 2008 but mining operations in the original Goldex Extension Zone (GEZ) orebody were suspended in October 2011 (see October 19, 2011 news release). In July 2012, the M and E satellite zones were approved for development. Mining operations at GEZ remain suspended.

Mining operations resumed on the M and E satellite zones in September 2013. Initial mill testing, late in the third quarter of 2013, yielded 1,505 ounces of pre-commercial gold production. The Goldex mine achieved commercial production in the fourth quarter of 2013, with the mill processing an average of 5,343 tpd during the quarter. Throughput is expected to gradually increase from a level of 5,400 tpd in the fourth quarter of 2014 to approximately 6,000 tpd in 2015.

Minesite costs per tonne at Goldex were approximately C$32 in the fourth quarter of 2013, which was well below the September 2013 forecast cost of approximately C$40 per tonne. Mine site costs per tonne were significantly lower than forecast primarily due to higher tonnage, lower drilling and blasting costs and lower backfill costs. However the life of mine cost per tonne remains forecast to be approximately C$39.

Payable gold production in the fourth quarter of 2013 was 19,305 ounces at a total cash cost per ounce of $782. Forecasts in September 2013 had called for commercial production of approximately 15,000 ounces at a total cash cost of approximately $900 per ounce. Higher gold production was primarily due to higher head grade combined with higher tonnage and slightly higher recovery. Costs were lower due to the reasons outlined above.

For the full year 2013, the mine produced 20,810 ounces of gold, including 1,505 pre-production ounces.

In 2014, development activities will begin on the MX and E2 satellite zones. In addition, exploration is continuing on several other satellite zones, including the Deep and P zone (top of the D zone), which have the potential to further extend the mine's life. Economies of scale may be available if additional zones are developed as the mill has the ability to operate at over 8,000 tpd.