Intrepid posts Indonesian resource (August 25, 2008)

VANCOUVER — A resource estimate for a portion of the Tujuh Bukit gold project in Indonesia only a few months after Intrepid Mines (IAU-T, IAU-A) acquired the project through a merger with Emperor Mines shows the new company is serious about advancing projects down the pipeline.

The first resource estimate at the site, which is near the east end of Java island, came in at 36.5 million inferred tonnes grading 0.53 gram gold per tonne, 25 grams silver per tonne, and 0.1% copper. Intrepid says 95% of the resource is located above 300 metres depth.

But the resource only covers Zone C, one of three zones of known oxide and sulphide gold-silver mineralization within the Tumpangpitu prospect. Zone C remains open to the north and south.

In a release, Intrepid’s managing director, Brad Gordon, called Tujuh Bukit project a “potential company-maker.”

“Zone C alone doubles Intrepid’s precious metals resource base with Tujuh Bukit representing the potential for a third mine in the portfolio,” Gordon said. Intrepid also owns and operates the Paulsens gold mine in Western Australia and has committed to developing a mine at its Casposo gold-silver project in Argentina.

Tumpangpitu is the roughly 8-sq.-km prospective zone in the southeast corner of the Tujuh Bukit project. At Tumpangpitu, mineralization is high sulphidation. Some 6 km northwest, the Salakan prospect stretches along an almost 10-km strike length.

Silicic and advanced argilic alteration at Tumpangpitu is laid out in the shape of a V tipped to the left. Zone C is the left arm of the V and covers an area roughly 400 metres by 300 metres.

Since completing the drill program at Zone C, the rig was moved to Zone A, the right arm of the V, and results are expected shortly. In September, drilling will begin at Zone B, the crux of the Vshaped target.

Drill holes completed since the resource calculation began have started to outline a porphyry copper-gold system sitting below the high-sulphidation cap included in the estimate. Hole 29 was drilled to

probe the underlying zone and returned 268 metres grading 0.47 gram gold and 0.32% copper from 390 metres depth, including 100 metres of 1.02 grams gold and 0.55% copper.

Hole 35, drilled to follow up on the intercept in hole 29, returned a whopper: 627 metres grading 0.45 gram gold and 0.44% copper from 222 metres depth, including 108 metres of 0.9 gram gold and 0.9% copper. The intercepts in hole 29 and 35 sit some 450 metres apart.

In addition to the three lettered zones that are known to contain oxide mineralization, Intrepid has its eye on several other untested anomalies. One is a gold-in-soil anomaly southeast of Zone B.

News of the resource estimate at Tujuh Bukit lifted Intrepid’s share price by 3 to close at 28 in July 28 trading, but the stock had drifted to the 25 range at presstime. The company has a 52-week trading range of 18-41 and has 413 million shares issued.

At its Paulsens mine in Australia, Intrepid has managed to produce more than 20,000 oz. gold for three consecutive quarters. In the second quarter of 2008, the mine produced 22,687 oz. gold, up 11% from the previous quarter and its best quarter on record since the mines started up in mid-2005. Site cash costs decreased a few dollars to US$429 per oz., a reduction more impressive when one considers that the Australian dollar strengthened 4% against the greenback over the period.

Intrepid is aggressively exploring around the Paulsens mine with the aim of extending its mine life from two remaining years to five.

In addition, Intrepid’s hedge position is on the decline: as of June, it had 22,448 oz. gold hedged, down 10,682 oz. since March. Gold revenue for the quarter was $20 million, leaving the company with $34 million cash on hand. The company does not anticipate having to raise capital until well into 2009, when construction begins at Casposo.

In July, Intrepid committed to a development timeline for Casposo leading to production in the third quarter of 2010. Plans call for annual production of 63,000 tonnes over a 5.5-year mine life. Capital costs come in at US$86 million; average life-of-mine cost of production comes out at US$90 per oz., net of silver credits.

The two deposits at Casposo — Kamila and Mercado — host indicated resources of 2.1 million tons grading 5.07 grams gold and 136 grams silver. The resource translates into a probable reserve of 1.7 million tons grading 5.16 grams gold and 120 grams silver. The company is actively working to expand the resource and recently reported intercepts from the Inca vein in a previously undrilled area sitting 50 to 150 metres away from the resource boundary.