Atna's Reward technical report recommends open-pit mine

2008-04-03 10:14 ET - News Release

Mr. James Hesketh reports

ATNA TECHNICAL REPORT RECOMMENDS DEVELOPMENT OF REWARD GOLD PROJECT IN NEVADA

Atna Resources Ltd. has filed an NI 43-101 technical report titled "NI 43-101 Technical Report, Reward Gold Project, Nye County, Nevada." The technical report, prepared by Chlumsky, Armbrust & Meyer LLC of Lakewood, Colo., envisions development of a conventional open-pit mine, ore-crushing and heap-leach operation. The technical report recommends development of the 100-per-cent-owned Reward gold project and Atna is working to fulfill permitting requirements to enable development of the project.

Definitions used in the technical report and in this release are consistent with those adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Council in December, 2005, as amended, and prescribed by the Canadian Securities Administrators' National Instrument 43-101 and Form 43-101F1, Standards of Disclosure for Mineral Projects.

The report details an estimate of mineral reserves and mineral resources as summarized in the tables.

       
                           MINERAL RESERVES 
                    (see notes No. 1, 2, 3, 4 and 5)
    
Category               Tons     Gold -- optical         Contained ounces
    
Proven            1,100,000               0.029                   32,300
Probable          4,081,000               0.026                  105,400    
Proven and
probable          5,181,000               0.027                  137,700   
    
(1) Gold price of $575 (U.S.) per ounce.
(2) Strip ratio of 2.2 tons of waste per ton of ore.
(3) Included within total mineral resource.
(4) Internal economic cut-off grade of one cent per ton.
(5) Gold recovery equals 82 per cent (including residual).

                            MINERAL RESOURCES
                            (see note No. 1)
    
Category               Tons     Gold -- optical         Contained ounces
    
Measured          1,744,000               0.027                   46,400
Indicated         9,259,000               0.023                  212,300
Total measured
and indicated    11,003,000               0.024                  258,700    
Inferred          2,819,000               0.018                   51,300
    
(1) Cut-off grade equals 0.010 ounce per ton gold.

The measured and indicated resources stated above include reserves, which are a subset of resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred resources are considered too speculative, geologically, to have the economic considerations applied to them that would enable them to be categorized as mineral reserves.

Not included in the above mineral reserves are an additional in-pit inferred resource above the internal cut-off grade and estimated to be 271,000 tons grading 0.018 ounce per ton, and containing approximately 5,000 ounces of gold. The Reward gold resource is open along strike and down-dip which will require additional exploration drilling to evaluate.

The report discusses two alternative development scenarios: $525 (U.S.) gold price pit design and $700 (U.S.) gold price pit design.

$525 (U.S.) gold price pit design

The Reward operation is expected to produce approximately 117,000 ounces of gold over a four-year mine life at estimated average cash costs of $409 per ounce of gold produced. This production would provide an undiscounted cash flow of $14.6-million and an internal rate of return of 13.2 per cent at a $700 gold price. The report includes capital costs for crushing and process plants, facilities and infrastructure, mining fleet, and preproduction stripping of $24.3-million. Break-even full cost inclusive of capital is $564 per ounce. At a gold price of $900 per ounce, the project would develop an internal rate of return of 32.8 per cent and an undiscounted net cash flow of approximately $36-million without allowance for reserve expansion.

$700 (U.S.) gold price pit design

The report developed an alternative case using a $700 gold price pit design that contains a measured and indicated resource of 6.4 million tons grading 0.025 ounce per ton with a waste-to-ore strip ratio of 2.2 using a variable cut-off grade. This case would require an additional $1.1-million in preproduction capital over the base case. This larger pit is expected to produce 134,100 ounces of gold over a five-year mine life at an estimated average cash cost of $412 per ounce generating an internal rate of return of 11 per cent and an undiscounted net cash flow of $15.4-million using a $700 gold price. At a $900 gold price, this case produces an internal rate of return of 30 per cent and an undiscounted net cash flow of $40.3-million.

Initial capital costs can be reduced in both the $575 and $700 cases by using contract mining. Based on actual contract mining quotes, initial capital purchases for mining equipment and shops can be reduced by approximately $7.5-million, while overall life-of-mine mining costs are increased by approximately $5.3-million for the $575 pit case and higher in the $700 pit case. Further studies will be completed and reviewed comparing the use of contract mining versus owner mining prior to development.

Mining operations at Reward would use conventional 100-ton open-pit trucks and compatible loaders. Mined ore will be crushed to minus three-eighths inch and placed on a lined pad for leaching and gold recovery. Process solutions will be captured in solution tanks and circulated through activated carbon to capture contained gold. This loaded carbon would subsequently be dewatered, packaged and transported for final gold recovery to either the CR Briggs mine in Inyo county, California, or to a third party processing facility.

The project has been carefully designed to create the smallest environmental footprint possible and the permitting process is well advanced. Final reclamation and closure cost, which is included in overall production cost, is estimated at approximately $2.5-million for the base case. The cost for reclamation and closure bonds of approximately $5.3-million was estimated using the state of Nevada statutory cost-estimating model and is subject to final approval by state regulatory authorities. Bonds may be posted using a number of financial instruments, including cash. This amount would be in addition to the capital estimates stated above.

Qualified persons

Fred Barnard, PhD, California professional geologist No. 7432, Greg Chlumsky, MMSA No. 0117QP, and Robert L. Sandefur, Colorado PE No. 11370, acted as qualified persons as defined by NI 43-101 in the preparation of the technical report, and have reviewed and approved the contents of this news release.

We seek Safe Harbor.