African Aura Mining Inc. Preliminary economic assessment on New Liberty Gold project

African Aura Mining Inc., the TSX?V and AIM listed exploration and development company is pleased to announce the completion of the preliminary economic assessment study (the ‘Study’) with respect to the Company’s 100% owned New Liberty Gold Project located in western Liberia.

• Study highlights potential for robust open pit gold mine with strong economics
• First five year’s production with minimum 100,000oz pa in initial 8.5 year mine life
• Pre-tax NPV of $234m (£148m) based on $1,100/oz Au and 10% discount rate
• Initial capex of $92m, average cash cost of $484/oz and head grade of 3.6 g/t Au
• IRR of 73% and capital payback in under two years
• Definitive Feasibility Study underway and on track for 4Q 2011 completion

Luis da Silva, Chief Executive of African Aura, commented:
“These very positive results demonstrate the robust nature of the New Liberty Gold Project and confirm our long held belief on the excellent grade potential of the ore zone for the open pit mine. It is worth highlighting that the pre-tax NPV of the project calculated using a gold price of $1,100/oz and 10% discount of $234m / £148m equates to approximately £1.62 / $2.56 per African Aura common share on a fully diluted basis. New Liberty will be an excellent flagship gold asset for Aureus Mining Inc which, subject to the necessary shareholder and regulatory approvals, is anticipated to be created by March 2011 by way of the corporate restructuring as detailed in the Company’s news release of 8th November 2010.
 
In the meantime we shall complete further infill and exploration drilling in the process of finalising the definitive feasibility study. New Liberty is on the cusp of becoming a very significant gold operation in West Africa and we will update shareholders in due course. Over the last five years, the current administration under President Ellen Johnson Sirleaf has brought about a monumental change in investor sentiment culminating in stated foreign direct investment of approximately $16 billion, mainly in mining, oil and agriculture.  Indeed, New Liberty will be the first operating gold mine in Liberia and I would like to acknowledge the cooperation and support of the Government of Liberia.”
 
The study supports an open pit and gold processing plant with an average annual production rate of 850,000 tonnes of ore over an 8.5 year production life. In the first 5 years of the project, forecast gold production will average 100,000 ounces per year with total gold production for the project expected to be some 786,700 ounces. Metallurgical testwork has confirmed the ore is non-refractory and a recovery of 93% is achievable through a combined gravity and carbon in leach process. 
 
The average life of mine cash cost per ounce is estimated at $484 with an expected pre-tax net present value (‘NPV’) of $234 million at a gold price of $1,100/oz using a 10% discount rate and a pre-tax internal rate of return (‘IRR’) of 73%. The expected payback period is less than 2 years. For all estimates 4Q 2010 market prices for capital and operating costs were applied. All dollar amounts presented in this news release are expressed in US dollars. Based on the results of the study, the New Liberty deposit contains 7.3 million tonnes of mineable gold ore in the Indicated and Inferred category at a diluted head grade of 3.6 g/t. The majority of the mineable resource is in the Indicated category.
 
The Study was compiled by AMC Consultants (UK) Limited (‘AMC’) in collaboration with MDM Engineering Ltd, Golder Associates Africa Ltd and the African Aura Project Development team. The study is based on the Indicated and Inferred resources as stated in the National Instrument 43-101 of the Canadian Securities Administrators (“NI-43-101”) compliant technical report dated November 2010 and entitled ‘New Liberty Gold Project, Liberia, West Africa, Technical Report on Additional Drilling and Estimated Resources for African Aura Mining Incorporated’ prepared by Mr C G Arnold of AMC Consultants (UK) Limited (the ‘November 2010 Technical Report’)