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ROMARCO ANNOUNCES POSITIVE FEASIBILITY STUDY FOR HAILE GOLD MINE PROJECT

February 9, 2011

TORONTO, Feb. 9 /PRNewswire-FirstCall/ – ROMARCO MINERALS INC. (TSX:R) (the “Company”) is pleased to announce positive Feasibility Study
results for its 100% owned Haile Gold Mine Project in Lancaster County,
South Carolina, USA. The Feasibility Study was compiled by M3
Engineering & Technology Corporation (“M3″) with the participation and
contribution of Independent Mining Consultants (“IMC”) and AMEC
Americas Limited (“AMEC”).  All figures are in US dollars.

The Company is also pleased to announce estimates of additional mineral
potential that exists outside of the recently reported $1,200 per ounce
gold in-shell resource that are not included in the Feasibility Study.
Please see the section below titled “Potential Mineral Deposits” for
details.  Haile continues to remain open in all directions and at depth
with significant potential for continuing to increase resources and
reserves.

Highlights of the Feasibility Study (base case at $950/oz gold):

  • One of the lowest capital cost, lowest operating cost and highest-grade
    open-pit gold mines in the industry
    • Capital costs of $275 million
    • Average cash cost (after by-product credit) of $347 per ounce first five
      years
    • Reserve grade of 2.06 grams/tonne
  • Proven and probable reserves of 2.0 million contained ounces of gold
  • Robust project economics
    • At $950 gold, pre-tax net present value (NPV) at 5% discount of $279
      million and internal rate of return (IRR) of 19.6%
    • At $1,300 gold, pre-tax NPV (5%) is $693 million; 37.6% IRR – see table
      below for sensitivities at various gold prices
  • Mine life in excess of 13 years at a mill throughput of 7,000 tons per
    day (tpd)
    • First year production of 172,000 ounces of gold
    • First 5 years production average 150,000 ounces gold per year
  • Average 83.7% gold recovery
  • Life of mine (LOM) strip ratio of 7.2:1
  • The Feasibility Study does not include:
    • Horseshoe, Snake Deep, West Ledbetter and some portions of Mill Zone,
      Small and Champion deposits. 
    • Inferred resources in the $950 pit
    • These zones required additional drilling and are the target of the 2011
      exploration program. 
  • The project will be designed and constructed to meet the International
    Cyanide Management Code standards

Proven and probable reserves and the mine plan were calculated using a
$950 per ounce gold price and drill data from the most recently
reported in-shell resource (calculated at $1,200 per ounce gold with
drill results through September 30, 2010).  The project has been
specifically designed to facilitate expansion early in the mine life. 
Studies are currently being conducted to evaluate both open-pit and
under-ground expansion alternatives.

Once the necessary permits have been received and financing is in place,
Romarco plans to proceed immediately with the construction and
commissioning of the project as the first phase of development in the
Haile district.  Detailed design work is currently underway on the
project.

Development of the Haile project will deliver significant, positive
impact on the economies of Lancaster and Kershaw counties, and the
state of South Carolina.  Romarco anticipates directly employing
approximately 500 persons at site during construction and approximately
300 persons on a sustaining basis once in production. Future expansions
at Haile would require additional personnel. The Company will continue
to hire locally and use local and regional suppliers as it has over the
past three years.  The Company currently spends in excess of $1 million
per month locally, including wages. Contractors and consultants provide
additional economic benefits.  The multiplier on the economic impact of
Haile to the local community and county will be significant. 

Financial Analysis

The financial analysis for the Base Case ($950 gold and $18 silver) indicates a pre-tax NPV at a 5% discount rate
of $279 million with an IRR of 19.6% and a payback period of 4.2 years.  On an after-tax basis, the NPV at a
5% discount rate is $191 million with an IRR of 15.7%.  The base case
is expected to generate $508 million in pre-tax operating cash flow.

Table 1 below outlines gold price sensitivities for the pre-tax NPV and
IRR of the Haile Gold Mine project:

Table 1: Pre-tax NPV and IRR Sensitivity to Gold Price

($ Millions, except gold price)

           
Gold Price

per oz

   NPV @ 0%    NPV @ 5%    NPV @ 10%     IRR %   Payback  

Years

$1,500 $1,426 $930 $621 47.0% 2.0
$1,400 $1,259 $812 $534 42.3% 2.2
$1,300 $1,092 $693 $447 37.6% 2.4
$1,200 $925 $575 $359 32.7% 2.7
$1,100 $758 $457 $272 27.6% 3.1
$1,000 $591 $339 $185 22.3% 3.8
   $950 $508 $279 $141 19.6% 4.2
   $800 $257 $102 $10 10.7% 7.6
   $700 $90 -$16 -$77   4.0% 9.4

Haile Mineral Reserves and Resources

The open pit mineral reserves and resources were completed by
Independent Mining Consultants (IMC), with John Marek, P.E. acting as
the Qualified Person (QP) for the calculations.  The proven and
probable reserves were developed from the block model and the mine plan
using a gold price of $950 per ounce. The mineral reserve is the total
of all proven and probable category mineralization in the Feasibility
mine plan. 

The floating cone algorithm provided guidance to the design of the
pushbacks and the final pits.  Multiple cones at a range of metal
prices were run in order to determine the best place to start mining,
initial pit openings, and guidance to final pit geometries.

The mineral reserves and resources are summarized in Table 2 and Table 3
below:

Table 2: Proven and Probable Reserves @ $950/oz Gold
             
Category Metric

tonnes

(000s)

Grade

g/tonne

Short

tons

(000s)

Grade

oz/ton

 Contained 

oz

(000s)

 Recovered 

oz (000s)

             
Proven 19,592        2.19      21,596      0.064 1,382 1,166
Probable      10,917 1.82 12,034 0.053 636 515
Proven+Probable 30,509 2.06 33,630 0.060 2,018 1,681
           
Table 3: In-Shell Resources @ $1,200/oz Gold*
           
Category Metric

tonnes

(000s)

Grade

  g/tonne  

Short

tons

(000s)

Grade

oz/ton

 Contained 

oz

(000s)

           
Measured      27,782 1.89      30,624      0.055 1,684
Indicated 25,596 1.75 28,215 0.051 1,439
Measured+Indicated 53,378 1.82 58,839 0.053 3,123
           
Inferred 24,944 1.34 27,496 0.039 1,072

*Previously released November 2, 2010 and filed December 14, 2010 on
SEDAR.

Exploration Potential – Potential Mineral Deposits

Significant upside potential exists within and surrounding the Haile
mineralized system, which continues to remain open in all directions
and at depth.  The Company’s focus is to expand the resource within and
near known deposits, upgrade inferred mineral resources, and discover
new deposits in areas surrounding the known deposits where drilling is
sparse. Romarco will also begin exploring further along trend, stepping
easterly of the Horseshoe zone, and westerly of the Champion and 601
areas that are over 1 km west of South Pit.  Additionally, as the
Company continues to expand its land position throughout the district,
exploration drilling will be initiated to evaluate these prospective
new target areas.  Romarco’s regional exploration team has identified
several new target areas beyond the Haile system with historical
drilling, and in some cases existing historical resources.  The 2011
exploration program consists of 110,000 meters of both RC and core
drilling.

Potential mineral deposits within the proposed mine site were created in
order to estimate potential zones of gold mineralization outside of the
in-shell resource estimate ($1,200 gold).  These zones are based on
trends, geology, and scattered drilling.  It should be recognized that
these zones list only the areas where current knowledge of Haile’s
mineralization is sufficient to indicate that these zones are viable
targets. These potential mineral deposits represent a small portion of
the Haile property.There are numerous additional targets at Haile that
are not listed here.  Therefore, these tonnages and grades should not
be construed as minimums or maximums.  Independent Mining Consultants
(IMC) has reviewed the geometries and procedures applied by Haile in
developing the potential mineral deposits.  As a result, IMC holds the
opinion that those procedures are a reasonable means to establish range
estimates of potential quantities and grades for future drill targets.

The conceptual estimates were based on projecting potential mineralized
zones through areas with limited drill information.  The zones were
developed by constructing 3-dimensional wireframes using Vulcan mine
planning software and a minimum grade of 0.34 g/t.

Quantity ranges were estimated using two scenarios: Scenario A used
geologic inference to determine the orientation and extent of the zones
along known mineralized trends based on the Haile geologic model and
current drill results.  Scenario B excluded the distal portions of the
potential mineralized zones.  Ranges of grade were assigned to the
potential mineralized zones using two cases:  Case A applied the
average grade for zones within the $1,200 per ounce gold shell to the
adjacent zones outside the shell, and Case B was determined by taking
an arithmetic average of all the drill composites within each zone
outside the $1,200 per ounce gold shell.  It should be noted that
averaging all composites has a tendency to reduce the grade versus
resource techniques that discard low-grade intervals.

The resulting potential ranges of quantities and grades listed below are
conceptual in nature based on geologic knowledge, interpretation and
wireframes.  There has been insufficient exploration to define a
mineral resource and it is uncertain if further exploration will result
in any of the targeted areas being delineated as a mineral resource. 
The Company currently plans to focus on further exploration drilling
within these potential mineral deposits during 2011 and beyond.  Tables
4.1 (Imperial Units) and 4.2 (Metric Units) display the potential
mineral deposits at Haile.

Table 4.1: Potential Mineral Deposits (Imperial Units)
         
Zone   Scenario A  

tons (000s)

  Scenario B  

tons (000s)

  Case A 

oz/t

  Case B 

oz/t

         
Horseshoe 18,200 15,384 0.099 0.061
Ledbetter 24,000 19,381 0.069 0.025
Snake 4,372   3,777 0.058 0.034
Chase Hill 1,800   1,670 0.031 0.027
Mill Zone 2,000   1,734 0.043 0.038
Small 5,555   4,573 0.019 0.018
601 Area 7,348   5,970 0.026 0.024
Champion 7,335   5,476 0.028 0.024
   Total 70,610 57,965 0.062 0.034
         
Table 4.2: Potential Mineral Deposits (Metric Units)
         
Zone Scenario A

  tonnes (000s)  

Scenario B

  tonnes (000s)  

  Case A 

g/t

  Case B 

g/t

         
Horseshoe 16,511 13,956 3.39 2.09
Ledbetter 21,772 17,582 2.37 0.86
Snake   3,966   3,426 1.99 1.17
Chase Hill   1,633   1,515 1.06 0.93
Mill Zone   1,814   1,573 1.47 1.30
Small   5,039   4,149 0.65 0.62
601 Area   6,666   5,416 0.89 0.82
Champion   6,654   4,968 0.96 0.82
   Total 64,055 52,585 2.11 1.18

Mining and Production

Romarco plans to use conventional open pit mining methods.  A
combination of hard rock and soft rock will be encountered in the
deposit during the mining process.  The majority of the material from
the mine will be hard rock, which will be drilled and blasted prior to
loading.  The initial mining fleet consists of fourteen100-ton haul
trucks, two 15 cu yd front-end loaders, and one 14.4 cu yd hydraulic
front shovel, with various support equipment.  The mine plan produces
2.55 million tons of ore per year for delivery to the process plant
(7,000 tpd).  A variable cutoff grade strategy was utilized for the
mining schedule in order to provide higher-grade mill feed during the
early years, while stockpiling low-grade material to be processed at
the end of the project life.  The pit design is based on variable pit
slope angles.  The inter-ramp slope angles utilized are 49 degrees for
the north walls, 38 to 45 degrees for the south walls, 40 degrees in
the saprolite, and 27 degrees for the coastal plains sand.

Metallurgy and Processing

The plant design incorporates conventional precious metals recovery
processes including jaw crushing, semi-autogenous and ball milling,
flotation, fine grinding of the flotation concentrate, and
carbon-in-leach cyanidation.  The plant will process nominal 7,000 tpd
based on 92% plant availability.  Gold recovery is calculated at 83.7%
based on an average head grade of 2.06 g/t.  Primary grind product size
is estimated at P(80 )= 74 microns.  Fine grind product size of the flotation concentrate is
estimated at P(80 )= 15 microns.  Nominal leach times for flotation tailing and flotation
concentrate are 20 hours and 40 hours respectively.  The design is
based on numerous tests that were conducted at various laboratories,
including Resource Development Inc. located in Denver, Colorado.  Final
plant tailing will be stored in a conventional tailing facility. 
Well-proven and commercially applied sulfur dioxide/air cyanide
destruction technology will be used as needed to ensure tailing meets
International Cyanide Management Code standards.

Land and Infrastructure

The Haile property is situated 4.8 kilometers northeast of the Town of
Kershaw in Lancaster County, South Carolina, USA.  The site is roughly
one hour south of Charlotte, North Carolina and one and one half hour
northeast of Columbia, South Carolina. The project is somewhat unique
in that it is situated wholly on private land 100% owned fee simple
(surface, water, and mineral rights) and no royalties.  Private lands,
unlike federal (BLM or USFS) lands are not subject to the proposed
amendment of the 1872 mining law imposing federal royalties on mining
properties.  To date the Company’s land position is approximately 8,000
acres.

The proximity to existing infrastructure reduces project costs because
the project is easily accessible and there is adequate housing, power,
phone, and water.  Natural gas, sanitary sewer, and potable water lines
run along Highway 601, which borders the Haile property to the west.
Haile has two sources of power available to it – Duke Energy and
Lynches River Power Cooperative.  The power transmission infrastructure
is well established, and less than 8 kilometers of new Duke or Lynches
River service will be required.

Operating Costs

The cash operating costs are provided in Table 5 below.  Life of mine
(LOM) unit costs per ton of ore is $18.92 and the unit cost per ounce
of gold produced is $379 including by-product credits.  The G&A
component of the cash operating costs includes property taxes of $0.62
per ton of ore, or $12.51 per ounce.

Table 5: Cash Operating Costs
     
  $ per ton of ore     $ per ounce of gold
Mining 9.62 192.84
Processing 7.67 153.61
G&A 2.26 45.28
Shipping/Refining 0.17 3.50
   Sub-Total 19.72 395.23
By-product (Silver) Credit (0.80) (15.96)
   Total After By-product Credit 18.92 379.27

Opportunities

  • Conversion of measured and indicated as well as inferred resources
    within the $1200 shell
  • Infill drilling to connect the pit bottoms of South Pit, Ledbetter, and
    Snake could lead to a lower overall strip ratio and increased gold
    ounces
  • Continued expansion of the high grade Mill Zone to maintain higher
    production levels beyond the first year
  • A throughput expansion early in the mine life to improve project
    economics
  • Further exploration:
    • at Horseshoe to develop higher grade underground potential
    • between Snake Deep and Horseshoe to connect mineralization
    • stepping out in all directions
  • Completion of the underground scoping study at Horseshoe for possible
    expansion scenario – this higher grade ore would lead to increased
    production and grade
  • Completion of analysis on tax matters including applying prior net
    operating losses to operations

Risks

  • Fluctuation in commodity prices
  • Increased costs or delayed availability of equipment
  • Timing of permits
  • Timing and availability of financing

Qualified Persons for Feasibility Study

The Feasibility study was prepared by leading independent industry
consultants, all Qualified Persons (QP) under National Instrument (NI)
43-101, with the collaboration of the Romarco technical group.  The
QP’s have reviewed and approved the content of this news release. 
Table 6 below details the following consultants that participated in
the study:

Table 6: Professional Qualifications
       
Responsibility Qualified Person   Registration     Company  
Process Plant Cost & Principal Author Joshua Snider PE M3
Process & Metallurgy Thomas L. Drielick PE M3
Environmental & Permitting Lee “Pat” Gochnour    MMSA G&A
Resources Modeling, Potential Mineral Deposits, Mine Planning, Reserves,
& Geology    
John Marek PE IMC
Tailing, Overburden & Site Water Management Derek Wittwer PE AMEC

An updated NI 43-101 compliant technical report reflecting additional
information in the Feasibility Study will be filed on the Company’s
website and on SEDAR as soon as it is completed.

Conference Call

Romarco will hold a conference call tomorrow (Thursday, February 10,
2011) at 10 am EST where senior management will discuss the Feasibility
study and respond to questions from analysts and investors.  To join
the call:

  In Canada and the United States –        1-877-974-0445
  International -     416-644-3426

The conference call will be recorded and playback of the call will be
available after the event by dialing toll free in Canada and the United
States 1-800-642-1687, or locally 416-640-1917, pass code 4409867#
(available up to February 17, 2011).

About Romarco Minerals Inc.

Romarco Minerals Inc. is a gold development company focused on
production primarily in the US.  The Company has completed a positive
Feasibility study and is continuing exploration drilling and permitting
for its flagship project, the Haile Gold Mine in South Carolina.

Please note:
This entire press release may be accessed via fax, e-mail, Romarco’s
website at www.romarco.com and through CNW Group’s website at www.newswire.ca. All material information on Romarco Minerals Inc. can be found at www.sedar.com

Forward-Looking Information

This News Release contains “forward-looking information” that is based
on Romarco’s expectations, estimates and projections as of the dates as
of which those statements were made. This forward-looking information
includes, among other things, statements with respect to the Company’s
business strategy, plans, outlook, financing plans, long-term growth in
cash flow, shareholder value, projections, targets and expectations as
to reserves, resources, results of exploration (including targets) and
related expenses, mine development, mine operations, mine production
costs, drilling activity, sampling and other data, estimating grade
levels, future recovery levels, future production levels, capital
costs, cost savings, cash and total costs of production of gold,
expenditures for environmental matters, projected life of Romarco’s
mines, reclamation and other post closure obligations and estimated
future expenditures for those matters, completion dates for the various
development stages of mines, availability of water for milling and
mining, future gold prices (including the long-term estimated prices
used in calculating Romarco’s mineral reserves), end-use demand for
gold, currency exchange rates, debt reductions, use of future tax
assets, timing of expected sales and final pricing of concentrate
sales, and the percentage of anticipated production covered by option
contracts or agreements.  Generally, this forward-looking information
can be identified by the use of forward-looking terminology such as
“outlook”, “anticipate”, “project”, “target”, “believe”, “estimate”,
“expect”, “intend”, “should”, “scheduled”, “will”, “plan” and similar
expressions. Forward-looking information is subject to known and
unknown risks, uncertainties and other factors that may cause Romarco’s
actual results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking information, and developed based on assumptions about
such risks, uncertainties and other factors set out herein, including
but not limited to:

  • uncertainties relating to the success of the Company’s gold exploration
    and development properties and the ability to develop a producing mine;
  • uncertainties associated with the highly speculative nature of the
    Company’s operations;
  • uncertainties associated with fluctuations in gold prices;
  • uncertainties relating to resources and reserves estimates; 
  • risk that the Company may yield less mineral production under actual
    conditions than is currently estimated;
  • risk that the Company may be unable to secure further capital necessary
    to carry out its operations;
  • uncertainties relating to the ability of the Company to secure the
    various permits to conduct its current and anticipated future
    operations;
  • inherent uncertainties associated with exploration and development
    activities;
  • uncertainties relating to actual capital costs, operating costs and
    expenditures, production schedules and economic returns;
  • risks associated with Romarco’s operations being subject to significant
    environmental laws and regulations, including change in governmental
    regulation;
  • risk that increased competition may adversely affect Romarco’s ability
    to attract necessary capital funding or acquire suitable producing
    properties or prospects for mineral exploration in the future;
  • risk of being subject to legal proceedings;
  • uncertainties relating to the ability of the Company to successfully
    acquire additional mineral rights;
  • uncertainties associated with integrating new acquisitions into existing
    operations;
  • risk that Romarco will be unable to attract and retain the necessary
    qualified management and technical personnel to meet the requirements
    of its anticipated growth;
  • uncertainties relating to the Company’s ability to effectively manage
    growth;
  • risks associated with the limited operating history of the Company and
    the lack of  history of earnings, positive cash flow or dividend
    payments;
  • risk that the Company’s insurance coverage may not cover all of its
    potential losses, liabilities and damage related to its business;
  • uncertainties related to recent market events;
  • uncertainties related to the current global financial conditions; and
  • conflicts of interest.

A discussion of these and other factors that may affect Romarco’s actual
results, performance, achievements or financial position is contained
in the filings by Romarco with the Canadian provincial securities
regulatory authorities, including Romarco’s Annual Information Form.
Forward-looking statements are based on assumptions management believes
to be reasonable, including but not limited to the continued operation
of Romarco’s mining operations, no material adverse change in the
market price of commodities, that the mining operations will operate in
accordance with Romarco’s public statements and achieve its stated
production outcomes, and such other assumptions and factors as set out
herein. Although Romarco has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to
be accurate.  Accordingly, readers should not place undue reliance on
forward-looking statements. Romarco disclaims any intent or obligations
to update or revise publicly any forward-looking statements whether as
a result of new information, estimates or options, future events or
results or otherwise, unless required to do so by law.

SOURCE ROMARCO MINERALS INC.


Source: newswire



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