Cleveland Mining Co Ltd : Update of process plant commissioning

ASX Release

20 December 2013

Update of Process Plant Commissioning

Cleveland Mining Company Ltd ("Cleveland", ASX: CDG) is pleased to announce the early stage results of commissioning of the optimised plant at the Premier Gold Mine. The construction of a new hammer mill and fixed jaw crusher together with modifications to the existing ball mill was the central plank of management's move away from a contractor based operation to an owner operator model.
One of the main objectives of the new front end circuit was to allow for better control and management of the feed stock with the intention being to reduce the grind size and provide a more uniform plant feed. This was designed to enhance the gold recovery rates through gravity separation and also to allow for higher processing volumes.
The initial results of the commissioning process are showing success in both these key areas. Recovery rates averaging 70% have been achieved compared to the previous average of approximately 60%. This improved result is even more impressive when noting the average grade of the early commissioning feed stock is around 0.5 g/t. Typically recovery rates increase with higher grade material so the Company reasonably expects a further improvement over the next commissioning phase when the average grade of the stockpiled material rises to around 0.8 g/t. The explanation for the better recovery rate is found in the finer grind size now allowing around 64% of the processed material to pass over the 200 mesh which is much higher than previous rates.
The throughput of the new integrated plant is also increasing, with hourly rates of up to 46 tonnes per hour (tph), compared to the previous configuration which was averaging 33 tph. The key to improved throughput is the finer feed material that requires less residency time in the ball mill which is effectively the main gating factor within any processing plant.
While noting that sustaining these higher rates is critical once the plant moves into full production mode, the fact of a more uniform and finer grind size feed supply gives management the confidence that its upside targeted monthly rate of 30,000 tonnes looks very achievable particularly given that the site is achieving the current throughput prior to the installation of the second ball mill.
Cleveland Mining's Managing Director David Mendelawitz said, "These results have met our expectations and provide support for our processing assumptions under the recently completed AMC Mine Plan. If we can maintain these recovery and throughput rates, our overall mine plan economics become even more robust than forecast".
"The new front end when combined with the In Line Leach Reactor "ILR", which is currently en route to our mine site in Brazil, should further enhance recoveries."

- Ends -

Further Information Mr Rod Campbell Executive Director

[phone] [e-mail]

Corporate Information

ASX Code: CDG

Total shares: 241.3 million Listed options: 11.4 million Unlisted options: 34.7 million

Contact

Investor & Media Enquiries [e-mail]

Board of Directors

Non-Executive Chairman - Russell Scrimshaw Managing Director - David Mendelawitz Executive Director - Rod Campbell

Non-Executive Director - Rick Stroud

Head Office

Suite 3, Level 1, Rokeby Centre

254 Rokeby Road

Subiaco WA 6008

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About Cleveland Mining Company Ltd

Cleveland Mining Company Ltd is an Australian-managed, ASX-listed minerals company squarely focused on developing projects into mines.

The Company's management team have a track-record for building billion-dollar projects from the ground up, providing Cleveland with the expertise to secure and build robust projects.

Cleveland has gold and iron ore assets in Brazil in areas with excellent mining credentials:

• Mining and production are underway at Cleveland's Premier 50/50 Gold Mine JV in Goiás State in central Brazil. The Company is working to add throughput from the O Capitão project, which is less than 10km from the Premier Mine.

• Cleveland has formed a strategic alliance with ASX-listed company BC Iron Ltd (ASX: BCI) to co-acquire and co-develop new iron projects in Brazil as joint venture partners. The companies recently signed binding Option Agreements for three Brazilian iron projects.

Cleveland has a different approach to project selection with project economics driving target selection. Projects are chosen according to their likelihood of generating returns at the bottom of the economic cycle.

Forward-looking Statements

Forward-looking statements can be identified by the use of terminology such as 'intend', 'aim',

'project', 'anticipate', 'estimate', 'plan', 'believe', 'expect', 'may', 'should', 'will', 'continue' or similar words. These statements discuss future expectations concerning the results of operations or financial condition, or provide other forward looking statements. They are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this ASX update. Readers are cautioned not to put undue reliance on forward looking statements

Competent Person's Statement

The information in this report that relates to Exploration Results is based on information reviewed by David Mendelawitz, who is a Fellow of the AusIMM. Mr Mendelawitz has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the

'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Mendelawitz consents to the inclusion of the matters based on his information in the form and context in which it appears. Mr Mendelawitz is employed by Cleveland Mining Company Ltd.