Farallon Announces Positive Cash Flow From G-9 Mining Operations

 

VANCOUVER, BC - Dick Whittington, President and CEO of Farallon Mining Ltd. said, "The G-9 mine's first quarter of commercial production shows that the operation is capable of producing high quality zinc concentrates at low cash cost. Further improvements in metallurgical recovery and mill throughput are anticipated during the second half of 2009, targeted to increase production to 120 million pounds of zinc annually with cash costs in the lowest quartile of zinc producers. Now that the balance sheet has been restructured and the mine is generating operating profits, Farallon is well positioned to establish a solid operational base from which to grow, through further exploration at Campo Morado and accretive transactions. Our goal is to become a multi-mine, mid-tier, mining company".

The mine located in Guerreo State, Mexico continued to mine material from the high-grade Southeast zone as well as material from the North zone and West Extension. Further development activity continued in the Southeast zone, opening up enough mining faces to deliver design production of 1,500 tonnes per day to the milling operations. In June 2009, over 45,000 tonnes of ore was mined. Development is expected to be complete by the end of the third quarter, opening up access to all mining areas in the Southeast zone.

During the period, the milling operations achieved the design throughput capacity of 1,500 tonnes per day for extended periods of time; however, mill availability was lower than design leading to production rates averaging 1,260 tonnes per day, up from 1,180 tonnes per day in the first quarter of 2009. As maintenance programs continue to mature, sustained production at design rates are expected. Trucking of concentrates to the port of Manzanillo continued, with all concentrates sold under contract to Trafigura, Free On Board ("FOB") at the port site.

Recoveries of zinc and copper were below expectations at 77% and 55%, respectively. A metallurgical optimization program is underway with the goal of achieving recoveries of 85% zinc and 70% copper. Recoveries of silver and gold were above expectations at 47% and 52%, respectively.

The company’s address is 428, 800 West Pender Street, Vancouver BC, V6C 2V6.