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RNC Announces Second Quarter 2019 Results; Integration of Higginsville Gold Operations Proceeding on Target

Press Release

RNC will host a call/webcast on August 15 at 10:00 a.m. (Eastern Time) to discuss the second quarter of 2019 results. North American callers please dial:  1-888-231-8191, international callers please dial: (+1) 647-427-7450. For the webcast of this event click [here] (replay access information below).

TORONTO, Aug. 15, 2019  – RNC Minerals (TSX: RNX) (“RNC”) announces its financial results and review of activities for the three and six months ended June 30, 2019 and 2018. All amounts are expressed in Canadian dollars, unless otherwise noted, and are based on the unaudited condensed interim consolidated financial statements of RNC as at June 30, 2019.

Paul Huet, Chairman and CEO, commented, “We are very pleased at the pace of the integration of the Beta Hunt Mine and the recently acquired Higginsville Gold Operations (HGO).  Already within a month, we are realizing a 25% reduction in Beta Hunt processing costs. Additionally, we are thrilled that the first material was mined from the HGO’s Baloo open pit in early August. Baloo, in addition to Beta Hunt, provides a second source of quality feed for the HGO mill and has a very short haul distance of only 14 km. With the recent robust gold resource update and increasing production at the Beta Hunt Mine, in combination with the lower cost and flexibility to process our material through our HGO mill, gives us great confidence in a strong second half of 2019 as RNC continues to evolve into a more stable producer.”

Second Quarter of 2019 Highlights

Quarterly gold production: Gold mined production for the second quarter totaled 11,056 ounces compared to 13,320 ounces in the second quarter of 2018. Production was lower due to the planned temporary ramp down of bulk mining during 40,000 meter resource drilling program at Beta Hunt. The gold mined grade in the second quarter was 2.59 g/t, 18% lower than in the second quarter of 2018 due to a higher level of low-grade areas mined during the quarter. A planned increase in capital development was initiated to open up a series of new production areas.

Updated Dumont Feasibility Study: On May 30, 2019, RNC, in its capacity as Manager of the Dumont Joint Venture with Arpent Inc., a subsidiary of Waterton Precious Metals Fund II Cayman, LP and Waterton Mining Parallel Fund Offshore Master, LP, announced the positive results of an updated feasibility study for its Dumont Nickel-Cobalt Project. The updated feasibility study delivered a US$920 million Net Present Value (“NPV”) based on a large scale, low-cost, long-life project with Initial nickel production in concentrate of 33ktpa, ramping up to 50ktpa in the Phase II expansion. Production is expected to be approximately 1.2 million tonnes (2.6 billion pounds) of nickel in concentrate, over a 30-year life with an initial capital expenditure of US$1.0 billion. Phase I C1 cash costs of $2.98/lb ($6,570/t). The study estimated Life-of-mine C1 cash costs $3.22/lb ($7,100/t Ni) and AISC of $3.80/lb ($8,380/t) of payable nickel (low 2nd quartile of cash cost curve).

HGO Acquisition: On June 10, 2019, RNC completed the acquisition of HGO from Westgold Resources Limited (“Westgold”). On closing, RNC paid Westgold AUD $25.0 million in cash and AUD $21.0 million in RNC shares (satisfied by the issuance of 49.8 million RNC common shares), for total consideration of AUD $50.0 million (including the AUD $4.0 million deposit previously satisfied in RNC shares). The cash portion of the HGO purchase price was funded by a new senior secured $35 million debt facility entered into by RNC. This facility will also fund working capital requirements of the combined business.

RNC Minerals Added to MVIS® Global Junior Miners Index: On June 17, 2019, RNC announced that MVIS® added RNC Minerals to its MVIS® Global Junior Gold Miners Index. The modified market cap-weighted index tracks the performance of the most liquid junior companies in the global gold and silver mining industry. The pure-play index contains only companies that invest primarily in gold or silver, or generate at least 50% of their revenues from gold or silver mining or own properties that have the potential to generate at least 50% of their revenues from gold or silver mining when developed.

Recent Highlights

Paul Huet Appointed CEO: On July 18, 2019, RNC announced the appointment of Paul Andre Huet as Chief Executive Officer (“CEO”). Mr. Huet has been Executive Chairman of the Corporation since February 2019 and brings over 30 years of mining industry experience with a proven track record of building shareholder value. Most recently, he served as President, CEO and Director of Klondex Mines from 2012 to 2018.

Updated Gold Mineral Resource: On August 12, 2019, RNC announced a substantial increase to the mineral resource at its Beta Hunt Gold Mine in Western Australia. There was a 395% increase in the Measured and Indicated resource to 944 koz (10,104 kt @ 2.9 g/t) and 195% increase in the Inferred resource to 406 koz (4,109 kt @ 3.1 g/t). The increase in resource was achieved at a discovery cost of A$7.30 per ounce.

Higginsville Gold Operation Integration: Integration of RNC’s recently acquired HGO operations is on target, with several key benefits that had been highlighted to shareholders now being achieved, including a 25% reduction in Beta Hunt processing costs. Gold recoveries for Beta Hunt material (processed at HGO and third-party facilities) improved to 93% in the second quarter of 2019 compared to 91% in the second quarter of 2018.

Production Ramping Up: Stope production at Beta Hunt continues to ramp up. Management expects that production rates will maintain 40 to 45 kt per month during the third quarter. At HGO’s Baloo open pit, overburden waste stripping commenced in May 2019, and first material was mined in early August. Baloo Stage I pit is expected to provide mineralized material supply to the HGO plant of approximately 30,000 tonnes per month until year end.

Read More: http://www.rncminerals.com/2019-08-15-RNC-Announces-Second-Quarter-2019-Results-Integration-of-Higginsville-Gold-Operations-Proceeding-on-Target

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