Astur Gold Announces Preliminary Economic Assessment Results from Salave Gold Project

Astur Gold Corp. (TSX VENTURE:AST)(FRANKFURT:CDC) has announced positive Preliminary Economic Assessment results for its 100% owned Salave Gold Project in Asturias, Spain.

The Study was compiled by Golder Associates of Spain and the results strongly demonstrate the technical and economic viability of the Project.

The Study examines three different mining scenarios. An open pit only scenario ("OP"), an underground only scenario ("UG"), and a combined open pit and underground scenario ("OP+UG"). In addition, the Study combines the mining scenarios with two processing options: a Bio Oxidation scenario ("BOX") and a Pressure Oxidation scenario ("POX").

Cary Pinkowski, CEO and Director of Astur Gold commented: "We are excited with the results of our Preliminary Economic Assessment. Clearly, the project will generate robust profitability from any of the proposed mining options. We evaluated multiple production and processing scenarios, giving us a wide range of information from which to select the optimal mine plan for the Company, the Community of Tapia, and the Government of Asturias. Astur Gold is advancing Salave towards production as expeditiously as possible for the benefit of all stakeholders."

Mining Scenarios

Scenarios 1 & 2 - Large open pit

• A large initial open pit ("OP") with a minor underground ("UG") component at the end of the mine life will produce 21Mt at an average grade of 2.87g/t Au over the 18 year life of mine ("LOM") (17.6 Mt Measured & Indicated at 2.92 g/t Au). This method recovers the largest portion of the orebody.
• These scenarios will have a pre-tax NPV (at a 5% discount rate) of $576 million to $548 million and a mine life of 18 years for the POX and BOX processing methods respectively. The Internal Rate of Return ("IRR") for these same scenarios will range between 34% and 36%.
• Average annual gold production will be 107,500 oz. Average annual cash costs will be US$419/oz for POX and US$435/oz for BOX.

Scenarios 3 & 4 - Underground only

• The underground only option will produce 9.8Mt at an average grade of 4.23 g/t Au (8.3 Mt Measured & Indicated at 4.31 g/t Au) over the 10 year mine life. This option provides the best payback at 2.0 to 2.2 years dependent on the processing method employed.
• These scenarios have a pre-tax NPV (at a 5% discount rate) of US$391 million and US$374 million and IRR of 46% and 53% for the POX and BOX processing methods respectively.
• Scenario 3 and 4 focuses on the extraction of a smaller tonnage, higher grade portion of the orebody. This method would result in the least amount of surface disturbance and mining facility footprint.
• Average annual gold production will be 133,300 oz. Average annual cash costs will be $529/oz for POX and $547/oz for BOX.

Scenarios 5 & 6 - Combined smaller open pit and underground

• Initial underground mining will operate concurrently with a small open pit 400 meters in diameter. This mining approach would target higher grade ore at depth and a small open pit operation to recover near surface lower grade ore. This method would increase the total ore recovered than mining scenarios 3 and 4, extend the mine life, and also minimize the pit size and surface disturbance proposed with mining scenarios 1 and 2.
• The pre-tax NPV (at a 5% discount rate) will be between $486 million and $464 million with an IRR of 47% and 54% over a 14 year mine life for the POX and BOX processing options respectively.
• The combined mining method would produce 542,575 oz Au from open pit and 1,006,093 oz Au from the underground operation.
• Average annual gold production will be 106,500 oz. Average annual cash costs will be $454/oz for POX and $467/oz for BOX.

Processing Options

Once mined, the ore responds well to flotation with gold recoveries in excess of 96%. BOX achieved maximum sulphide oxidation levels of between 96.5% and 99.6% on the individual and blended samples. Gold extraction after 24 hours on the oxidized residues varied between 91.9% and 97.8%. Cyanide consumptions were high ranging from 15.6 kg/t to 25.4 kg/t, however this reflected a test work objective of maximizing gold dissolution rather than optimizing cyanide consumption. Lime consumption was also high for BOX, ranging between 35.8 kg/t and 110 kg/t. POX achieved maximum sulphide oxidation levels of between 98.4% and 99.8% on the individual and blended concentrate samples. Gold extraction on the oxidized residues was very high at 98.6% to 99.1% after 24 hours, with low cyanide consumption of approximately 1 kg/t.

Capital Costs

Capital costs have been estimated for the six scenarios. Initial development capital expenditures range from $124.8 million to $153.7 million. It is assumed that the mining fleet will be a contract operation in all scenarios. Sustaining capital over the life of the project is estimated to range from $3.9 million to $6.6 million.

Economics

The economics of the project have been evaluated at a gold price of US$1,100/oz and all scenarios indicate a robust return for the project. The economics presented are on a pre-tax basis and are presented for the range of mining and processing options investigated.

Using a base case gold price of $1,100 per ounce, the Study shows:

• Undiscounted net pre-tax incomes ranging from $663 million to $1,195 million.
• Pre-tax Net Present Value (NPV) ranging from of $374 million to $576 million using a 5% discount rate.
• Internal Rate of Return (IRR) ranging from 34% to 54%.
• Total gold production ranges from 1.27 to 1.85 million ounces under different scenarios.
• The final life of mine (LOM) tonnage, grade and strip ratios used to generate the various economic outcomes varied depending on the various mining options considered.
• The corporate tax rate in Spain is 30% and there is no tax royalty for gold revenues.
• All dollar amounts presented in this press release are expressed in 1^stquarter 2011 US dollars.
• An exchange rate of 0.76 Euro to US dollars was used where costs were based on Euro expenditures.

Resource Base

The Study was based on a resource base of 2,155,000 tonnes grading 3.88 g/t Au (Measured), 15,790,000 tonnes grading 2.79 g/t Au (Indicated) and an additional 3,770,000 tonnes grading 2.80 g/t Au (Inferred). This resource estimate was completed in February 2010 by Scott Wilson RPA of Toronto (See Astur Gold Corp Press Releases – April 21, 2010).

• Open pit Mineral Resources are estimated at the pit discard cut-off grade of 0.7 g/t Au.
• Underground resources are estimated at the cut-off grade of 2.5 g/t Au Au and a minimum 4m vertical thickness of mineralization.
• Average density of mineralized rock is 2.74 t/m3 for the Salave gold deposit.
• Resources taken from NI 43-101 report, "Technical Report on Salave Gold Deposit, Spain", by Scott Wilson RPA, February 25, 2010.

Note: Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Scoping Study includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

Summary of Salave Gold Deposit Geology

The Salave gold deposit includes five Mineral Concessions covering a total area of 433 ha. The Salave gold deposit is hosted mainly by the Salave granodiorite, in close proximity to the contact with the Los Cabos Formation. The deposit contains gold mineralization along numerous north to northwest trending and gently west dipping irregular lenses. In certain areas, mineralization is affected by a set of north trending structures that define a complex network, within a northeast trending shear zone. Gold mineralization is also present within the adjacent metasedimentary rocks of the Los Cabos Formation.

Qualified Person

The Study, including a new mineral resource estimate for a proposed underground operation at the Salave Gold project has been prepared by Golder Associates Global Ibérica S.L.U. (Golder), under the direction of its Managing Director Dr. Arturo Gutierrez del Olmo, European Engineer, and under the direct supervision of Sergio Tenorio, European Geologist, Qualified Person (QP) under National Instrument 43-101. Utilizing the underground mining parameters and updated economic factors defined in the Study, Golder has revised and reported an underground resource based on the report "Technical Report on the Salave Gold Deposit, Spain", dated February 25, 2010 and authored by Hrayr Agnerian, of Scott Wilson RPA Inc. of Toronto, Canada (reference Astur Gold Press Release April 21, 2010). For the purpose of the re-evaluation, Golder has considered the geostatistics and block model generated for the preparation of the aforementioned Technical Report. Golder relies on, but does not guarantee, the validity of the block model. The Q.P., Sergio Tenorio has reviewed and approved the contents of this release.

Source: Astur Gold Corp.