Baja Mining Corp initiates production in Mexico

Baja Mining Corp. (“Baja” or the “Company”) (TSX: BAJ - OTCQX: BAJFF) is pleased to announce that it has commenced underground mining of copper-cobalt-zinc ore at its Boleo mine located near Santa Rosalia, Baja California Sur, Mexico. This is the first stage of an 18 month program, ramping up to full underground production in March 2013. The Company is also pleased to provide a project update. 

 

The Company’s first continuous mining unit was initiated at the 301 mine portal on September 5, 2011, as scheduled in the construction plan. It will mine ore from Boleo’s Manto 3 in the Texcoco Arroyo, which is 4 km directly west of the process plant construction site. Three main headings into Manto 3 ore will allow production of 159,000 wet tonnes over the next eight months, and along with two other underground mining areas, will meet Boleo’s initial consumption schedule of 11,400 wet tonnes per day. Current plans provide for one million tonnes of ore on the main stockpile by the start-up of the process plant in 2013, allowing for commissioning and providing up to three months of capacity reserve. 

 

The room-and-pillar continuous miner underground mining method uses standard equipment found in many coal, potash, and salt mines around the world. Over the initial 23 year life of the mine, 94% of ore will be derived from underground mining and the remaining 6% will come from surface mining.

 

As part of the 2007 definitive feasibility study, the Company conducted underground mining trials for seven months in 2005 and 2006, assessing equipment, mining methods and geotechnical ground responses. These trials confirmed the suitability of the room-and-pillar mining method and provided valuable geotechnical field data and information for the mine design. 

 

“The successful initiation of our first underground mining program marks another significant milestone in the development of Boleo,” said Baja’s President and CEO, John Greenslade. “Our operations and mining teams have worked diligently to reach this critical point.” 

 

Project Update

On August 26, 2011, Boleo’s desalination plant became operational, and is also the first permanent unit of the processing plant. It will produce 530,000 litres of fresh water per day, including all of the fresh water required for drinking and construction at the Boleo site. Two additional, significantly larger desalination plants will be constructed by Q3 2012 to provide all of the fresh water required for permanent operations at Boleo.

 

The Company also reports that it has completed the excavation of the Soledad Diversion Channel which will divert flash flood water away from the Boleo process plant and related infrastructure. Completion (armour rock placement, side slope grading, and catchment ponds) is now expected in time to ensure that Boleo’s water management techniques are operational for the current and subsequent hurricane seasons.

Finance Update

 

As referenced in the Company’s news release dated August 4, 2011, Baja has begun drawing its US$50 million subordinate debt facility, with the senior debt facilities scheduled to be drawn no later than October 2011.

 

The Company will continue to provide project updates, with updated pictures of construction and special events regularly posted on its website.