TORONTO, ONTARIO--(Marketwire - Feb. 28, 2008) - Breakwater Resources Ltd. (TSX:BWR) -
In 2008, Breakwater plans to:
- Continue its investment in capital projects to increase the productivity and efficiency of its operations
- Maintain the high level of investment in overall exploration
- Advance mine exploration and development to significantly increase reserves and resources
- Acquire value added projects or assets
The Company's projected metals production for 2008 is:
Metal in Concentrate Contained Payable (1)
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Zinc (tonnes)
Mochito 32,500 27,500
Toqui 32,900 27,600
Myra Falls(1) 43,600 37,100
Langlois 53,300 45,200
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162,300 137,400
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Copper (tonnes)
Myra Falls 6,400 6,100
Langlois 2,500 2,400
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8,900 8,500
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Lead (tonnes)
Mochito 15,400 14,600
Toqui 3,500 3,300
Myra Falls 900 800
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19,800 18,700
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Gold (ounces)
Toqui 30,500 27,200
Myra Falls 18,700 14,000
Langlois 1,700 1,200
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50,900 42,400
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Silver (ounces)
Mochito 2,001,000 1,611,000
Toqui 322,000 205,000
Myra Falls 984,000 653,000
Langlois 377,000 340,000
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3,684,000 2,809,000
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(1) The current labour agreement with Myra Falls employees, represented by
Canadian Auto Workers Union, expires March 31, 2008. Accordingly, as well as
the known and unknown risks to meeting production forecasts faced by all
mining companies, in the event we are unable to conclude an agreement for
a new labour contract at Myra Falls, the Myra Falls production forecast
might become unattainable.
These projections are based on the following:
Ore Milled Zinc Copper Lead Gold Silver
(tonnes) (%) (%) (%) (g/t) (g/t)
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Mochito 653,000 5.6 n/a 2.8 n/a 110
Toqui 522,000 6.9 n/a 1.0 1.0 23
Myra Falls(1) 766,000 6.4 1.1 0.6 1.2 48
Langlois 675,000 8.5 0.5 n/a n/a n/a
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All Operations 2,616,000 6.9 0.8 1.4 1.1 62
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Exploration
It is expected that the Company will spend $36.9 million on exploration expenditures in 2008 with the objective of substantially increasing the mineral resources (both measured and indicated and inferred) at Mochito and Myra Falls as well as advancing a number of greenfield exploration targets like the Coulon joint venture project. Additionally, the Company will focus on continuing to add to the proven and probable mineral reserves at Langlois and Toqui. The breakdown of exploration expenditures is set forth in the following table.
Exploration Expenditures 2008
(Capital and Expense) ($ millions) Projection
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Mochito 4.4
Toqui 4.9
Langlois 4.5
Myra Falls 6.0
Others 14.1
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36.9
SENSITIVITY TO METAL PRICES AND EXCHANGE RATES
The Company's cash flow and net earnings are sensitive to the price of zinc and the US$/C$ exchange rate. The following table provides the Company's estimates of the sensitivity of cash flow to changes in the various metal prices and US$/C$ exchange rate movements based on projections for 2008. The Company's sensitivities for 2008 are based on zinc at $1.00 per pound, copper at $3.40 per pound, lead at $1.30 per pound, gold at $750 per ounce, silver at $13.75 per ounce and a US$/C$ exchange rate of parity. The sensitivity table assumes that all other prices and/or the exchange rate are held constant and that the production forecasts set forth above are met.
Variable Change Sensitivity
($millions)
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Zinc +/- 10% 22.6
Copper +/- 10% 6.3
Lead +/- 10% 3.7
Silver +/- 10% 3.2
Gold +/- 10% 2.8
Exchange rates +/- 10% -26.4 / +21.6
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Forward-looking Information
Securities regulators encourage public companies to disclose projections or forecasts to help investors understand a company's future prospects. The foregoing forecasts, or "forward looking information" contained in this news release sets forth management's expectations about Breakwater's production for 2008 and its capital and exploration programs. This information is "forward-looking" because we have used what we know and expect today to make a statement about the future. Forward-looking statements usually include words such as may, expect, anticipate, assumes or other similar words.
We believe the expectations reflected in these forward-looking statements are reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with the mining business or events that happen after the date of this news release. You should not place undue reliance on this forward-looking information. As a general policy, we do not update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by securities laws and regulations.
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