Etruscan reports 2009 fourth quarter and annual results

HALIFAX, Feb. 26 /CNW/ - Etruscan Resources Inc. (EET.TSX) has reported its financial and operating results for the fourth quarter and year ended November 30, 2009. All figures are reported in Canadian dollars unless otherwise noted.

During 2009, Endeavour Financial made a US$43 million strategic investment in Etruscan as part of its gold focused acquisition strategy. This investment facilitated a comprehensive financial restructuring which addressed Etruscan's near term financial needs and significantly increased Etruscan's leverage to rising gold prices as a result of reducing the Youga Gold Mine hedge position to less than 20% of current life of mine production. In 2009 the Company addressed major operational issues at its Youga Gold Mine resulting in a quarter over quarter increase in gold production and reduction in operating costs.

Highlights for the year ended November 30, 2009

    
    - The Youga Gold Mine produced 64,879 ounces during the fiscal year with
      production in the second half of the year improving by 30% as compared
      to the first half.
    - Operating costs at Youga declined 18% from US$812 per ounce in the
      first half of the year to US$661 per ounce in the second half of the
      year.
    - Comprehensive financial re-engineering facilitated by the US$43 million
      strategic investment by Endeavour Financial allowed for:
           - The elimination of 42% of Etruscan's US$700 gold hedge, leaving
             less than 20% of current Youga life-of-mine production hedged;
             and
           - The restructuring of Etruscan's debt facilities.
    - Feasibility study updated for Agbaou Project located in Cote d'Ivoire,
      Etruscan's most advanced development project, and a mining permit
      application completed.
    - Resources at the Finkolo Gold Project located in Mali were upgraded to
      610,000 ounces measured and 220,000 ounces inferred.
    

Objectives for 2010

    
    - Produce 80,000 ounces during fiscal 2010 at a total cash cost of
      between US$550 and US$650 per ounce.
    - Continue exploration at the Youga Gold Belt to identify additional
      resources/reserves to increase Youga Mine life.
    - Continue the focus on cost reduction at the Youga Mine through
      maintenance, purchasing and warehousing initiatives.
    - Continue the development process at the Agbaou Project including
      pursuing the granting of a mining permit and negotiating a mining
      convention.
    - Advance the Finkolo Project to feasibility.
    - Continue exploration on the Dietekro Project in Cote d'Ivoire and the
      Keniebandi Project in Mali.
    

Selected Financial information from the Audited Financial Statements

    
    -------------------------------------------------------------------------
                     2009 Year end operational Highlights
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                                              2009                    2008*
    -------------------------------------------------------------------------
    Revenues                           $69,791,015             $24,844,233
    -------------------------------------------------------------------------
    Total Assets                      $171,116,111            $173,719,773
    -------------------------------------------------------------------------
    Current Assets                     $32,393,473             $21,118,273
    -------------------------------------------------------------------------
    Current Liabilities                $32,689,144             $51,019,956
    -------------------------------------------------------------------------
    Total Cash Costs $US                      $751                    $618
    -------------------------------------------------------------------------
    Gold Production                         64,879                  29,305
    -------------------------------------------------------------------------
    Loss per share                          ($0.49)                 ($0.34)
    -------------------------------------------------------------------------
    Total Ounces hedged                     83,004                 190,422
    -------------------------------------------------------------------------
    * Commercial production at the Youga mine commenced July 1, 2008
    

The 2009 annual audited financial statements and management's discussion and analysis are available on the SEDAR website at www.sedar.com or at the Company's website at www.etruscan.com. The financial statements have been prepared in accordance with Canadian GAAP.

About Etruscan

Etruscan Resources Inc. is a gold-focused Canadian junior mining company with dominant land positions in district scale gold belts covering more than 9,000 square kilometers in West Africa. Its principal mine development projects include the Youga Gold Project in Burkina Faso, the Agbaou Gold Project in Côte d'Ivoire and the Finkolo Gold Project in Mali. Advanced and early stage exploration projects are on-going in Burkina Faso, Mali, Côte d'Ivoire, Ghana and Namibia. The common shares of Etruscan are traded on the Toronto Stock Exchange under the symbol "EET".

More extensive information on Etruscan can be found on its home page at www.etruscan.com.

This press release may contain certain forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements may include statements regarding exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, mine operating costs, production targets and timetables, future commercial production, strategic plans, market price of precious metals or other statements that are not statements of fact. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Various factors that may affect future results include, but are not limited to: fluctuations in market prices of precious metals; foreign currency exchange fluctuations; risks relating to mining exploration and development including reserve estimation and costs and timing of commercial production; requirements for additional financing; political and regulatory risks, and other risks and uncertainties described in the Company's annual information form filed with the Canadian Securities regulators on SEDAR (www.sedar.com). Accordingly, readers should not place undue reliance on forward-looking statements.

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE

For further information: Renmark Financial Communications Inc.: Maurice Dagenais, [email protected]; Barry Mire, [email protected], [phone]; [phone]; Etruscan Resources Inc.: Richard Gordon, Investor Relations, [email protected], [phone], Fax [phone]