Underground mining is likely to extend production from the Dikulushi operations until at least Q3 2014 and provides the opportunity for Mawson West to continue to evaluate further underground mining potential, as well as the economic viability of identified satellite deposits.

Overview

Mawson West is currently producing copper and silver at Dikulushi by processing stockpiled material from its open pit operations, which is scheduled to continue into December 2013.

Commencement of underground mining extends the mine life at Dikulushi. The current Mineral Reserve supports an initial mine life of nine months at a production rate, after initial ramp-up, of 800 tonnes of copper and 65,000 ounces of silver per month.

It is anticipated that the mine life could be extended by progressively converting the large Inferred Resource below the current Reserve. Increased production rates may be possible as Mawson West stabilizes production and assesses alternative, more productive mining methods.

The initial mine schedule will utilize approximately 60% of the current process plant capacity. Satellite deposits presently being evaluated may utilize the remaining capacity in future periods.

Mawson West Chief Executive Bruce McFadzean said:

"Commencement of underground mining at Dikulushi is a milestone for Mawson West as we pursue our strategy of prudent growth in copper production from our operations in the Democratic Republic of Congo. Dikulushi is a deposit that we know and understand. It has significant existing underground infrastructure in place, reducing the capital expenditure required to develop the project."

Underground Mining Strategy

The initial mining schedule plans for concurrent mining of multiple headings between the 720RL and 805RL (approximately 200 to 280 metres below surface), commencing from levels that were previously developed. A simple approach of strike driving followed by backfilling with cemented rock fill has been adopted to minimize the geotechnical risk.

The currently defined underground Mineral Reserve of 173,000t @ 5.2% Cu, 127g/t Ag (Table 1) is expected to provide an initial nine month mine life. The longer term mine schedule proposes extraction of material presently classified as Inferred Resources.

To view Figure 1 please click on the following link: http://media3.marketwire.com/docs/1111MWE.pdf

Capital and Operating Costs

Capital expenditure for the initial phase of underground mining at Dikulushi is estimated to be US$9 million. The bulk of the capital expenditure is for mining equipment and services related to the underground operations, with little or no capital required for the existing processing plant, surface infrastructure and administration.

Operating costs have been built up on a first principle basis from actual costs and industry experience. The mining cost estimates include employing experienced expatriate mining personnel for key operational, technical and managerial positions.

Mineral Resources and Reserves

Tables 1 and 2 summarize the initial underground Mineral Reserve and the depleted Mineral Resource after completion of the Dikulushi open pit in July 2013.

Presently, drill coverage limits Measured and Indicated Mineral Resources, from which the current Mineral Reserve is derived, to levels above approximately 775RL (225 metres below surface; 50 metres below the base of the completed open cut). Wider-spaced drilling defines Inferred Resources to approximately 650RL and isolated drill intercepts indicate that mineralization continues to at least 500 metres below surface. The Company anticipates that Mineral Resources and Reserves will be upgraded and extended as drilling and mining progress in 2014.