Elgin Mining Reports Fourth Quarter and 2012 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 26, 2013) - Elgin Mining Inc. (ELG.TO)(TSX:ELG.WT) ("Elgin Mining" or the "Company") reports its operational and financial results for the three and thirteen month periods ended December 31, 2012 ("fourth quarter" and "fiscal year 2012", respectively). Elgin Mining owns and operates the Björkdal gold mine ("Björkdal") in Sweden, and is advancing the potential restart of operations at the Lupin gold mine ("Lupin") in Nunavut, Canada. All figures are in Canadian dollars ($ or CAD) unless otherwise indicated.

Fourth Quarter 2012 Highlights

• Gold production of 11,401 gold ounces;

• Cash cost per gold ounce sold of US$938;

• On-site cash cost per gold ounce produced of US$973;

• Cash cost per gold ounce produced of US$1,026;

• Cash provided by operating activities before working capital changes was $7.6 million for Björkdal;

• Net loss of $1.8 million attributable to exploration expenses of $2.1 million and Lupin pre-development costs of $1.6 million in the current quarter;

• Basic and diluted loss per share of $0.01;

• Gold production in the quarter was 9% higher than the previous quarter despite lost production days due to flooding from heavy rainfall in October in the underground unit, and lower ore movement in the open pit from the changeover of the load/haul mining contractor; and

• Strong gold production growth is attributable to higher plant head grades as a result of improving open pit and underground ore grades mined. Management expects this trend to continue into 2013 as operational improvements initiated earlier in 2012 progress.

Fiscal Year 2012 Highlights

Financial

• Gold production of 46,808 gold ounces which exceeded the Company's guidance of 44,000 to 46,000 ounces;

• Cash cost per gold ounce sold of US$1,023 which was below the Company's cash cost guidance of US$1,025 to US$1,075 per ounce;

• On-site cash cost per gold ounce produced of US$982;

• Cash cost per gold ounce produced of US$1,034;

• Cash provided by operating activities before working capital changes was $22.8 million for Björkdal;

• Net loss of $2.6 million attributable to exploration expenses of $11.5 million at the Lupin and Ulu gold properties, and to Lupin pre-development costs of $1.6 million in 2012; and

• Basic and diluted loss per share of $0.02.

Operational

• Recruitment of key senior technical and operational managers to advance operations at both Lupin and Björkdal;

• Commenced several initiatives to optimize the production and profitability of Björkdal, including the on-going implementation of grade control programs in both the open pit and underground, cable-bolting of underground stopes prior to mining to reduce dilution, and an approved plan to transition from contractor to owner-operated mining of underground production drifts upon expiry of the contractor's contract in August 2013;

• Drill results from the underground exploration program conducted in 2012 supports the Company's assertion that the Björkdal ore body remains open in several directions with strong resource upside. The Company intends to release an updated resource and reserve estimate in the second quarter of 2013;

• Conducted surface drilling on near mine targets surrounding Lupin and at the Ulu gold property to satisfy the Company's obligation to incur $9 million of flow-through eligible expenditures by the end of 2012; and

• Continued to further "de-risk" Lupin for a potential restart of operations by examining and repairing key surface infrastructure and by updating its health, safety and environmental activities to ensure on-going compliance with its key permits.

Liquidity and Capital Resources

• Cash and cash equivalents of $15.8 million at December 31, 2012;

• Working capital of $20.3 million at December 31, 2012;

• Gold concentrate inventory of 2,552 gold ounces at December 31, 2012; and

• Long-term debt of $0.9 million at December 31, 2012

Subsequent to December 31, 2012, the Company secured a 40 million Swedish krona (approximately $6.21 million¹) equipment loan facility with a local Swedish bank to assist with the funding of its 2013 capital program at Björkdal (see below).

¹ Assumes a SEK to CAD foreign currency exchange rate of 6.50

Along with the above financing, the Company expects that its cash on hand at December 31, 2012 and its budgeted operating cashflows for 2013 will be sufficient to meet its 2013 business plans. However, to improve the Company's liquidity, the Company is currently discussing debt financing options with a number of debt providers. Should Björkdal's operating results prove more favourable in the year, management may direct the proceeds received from any new debt financing towards accelerating the Lupin pre-development programs in 2013.

2013 Guidance and Plans

Björkdal

As more fully stated in its news release dated February 13, 2013, the Company is providing the following 2013 production and operational forecasts for Björkdal:

	Björkdal
2013 production guidance (gold ounces)	45,000 to 49,000
On-site cash cost per ounce produced (USD/ounce)	US$990 to US$1,090
Off-site treatment and refining charges per ounce (USD/ounce)	US$50 - US$55
Cash cost per ounce produced (USD/ounce)	US$1,040 to US$1,145
Capital expenditures (including capitalized exploration)	US$21.1 million
SEK per USD currency exchange rate assumption	6.50
CAD per USD currency exchange rate assumption	1.00

The production guidance reflects the organic growth that management expects to realize in the upcoming 2013 year through a combination of operational improvements (namely, better grade control and transition to self-mining in the underground unit) and capital investments that the Company has budgeted. However, 2013 cash costs are anticipated to be higher than those of 2012 and more importantly, the mine's longer-term cash costs as the full benefits of the Company's investment in various operational improvements will not be realized until the latter half of 2013 and into 2014.

The Company plans to continue with its underground and open pit diamond drill programs with the objective of growing the resource and reserve base at Björkdal to justify a future plant and mine expansion with the longer-term goal of increasing production to the order of 100,000 ounces annually.

Lupin

For 2013, the Company will be conducting a work program mainly focused on confirming the condition of the underground access and mine services at Lupin. This program will involve the purchase and mobilization of equipment to site to re-open the underground portal. Once access is secured, Lupin personnel will assess underground workings in preparation for a 2014 underground drill program and to gather pertinent information for a preliminary economic assessment on a Lupin restart.

Management expects to have the Lupin camp open for the entire year to allow for the above underground work; for minor mill and powerhouse repairs by contractors to facilitate a quicker restart of operations; and for certain health, safety and environmental activities to ensure on-going compliance with key permits.

Management is budgeting approximately $9.5 million in cash expenditures to carry out the above stated 2013 Lupin activities, including capital expenditures.

Commentary

Patrick Downey, President and CEO, commented, "I am pleased with the Company's many achievements during this past year and would like to thank the Company's employees, contractors, and consultants for their efforts. For 2013, we are focused on executing the operational improvement plans and production increases at the Björkdal gold mine, and making further advances at Lupin to de-risk this project for a future restart. By meeting our stated goals, the Company is well-positioned to deliver future returns to our shareholders and other stakeholders, through higher earnings, cashflows, and production."

Conference Call Details

Elgin Mining will host a conference call and a presentation/audio webcast on Wednesday, March 27, 2013 at 9:00 am (Eastern Time).

Live Dial-In Information

Toronto and International: 416-340-2216

North America (Toll Free): 866-226-1792

Participant Audio Webcast: www.elginmining.com

Replay Call Information

Toronto and International: 905-694-9451 passcode 3692421

North America (Toll Free): 800-408-3053 passcode 3692421

The conference call replay will be available from 2 pm (Eastern Time) on March 27, 2013, until 11:59 pm (Eastern Time) on April 10, 2013.

Elgin Mining Inc.

Elgin Mining is a Canadian based company focused on production at the Björkdal gold mine in Sweden, which surpassed its first millionth ounce of gold production in 2010, and on the exploration and development of the Lupin gold mine located in Nunavut, Canada. In addition, Elgin Mining's portfolio includes the Ulu gold project located approximately 155 kilometers north of the Lupin gold mine in Nunavut, Canada, a 29.5% interest in Auracle Resources Ltd., which is exploring the Mexican Hat property in Arizona, an exclusive right and option to earn a 60% interest in Lincoln Mining Corporation's Oro Cruz (California) and La Bufa (Mexico) gold projects and an option to earn a 60% interest in North Arrow Minerals Inc.'s Contwoyto gold project located adjacent to the Lupin gold mine in Nunavut, Canada. Elgin Mining also selectively reviews opportunities to add advanced stage development projects to its portfolio. The Company has a strong balance sheet, generates cash flow from gold sales, and remains un-hedged.

For further information, please visit the Company's web site at www.elginmining.com.

Cautionary Note Regarding Forward-Looking Information

This document contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements" are made as of the date of this report or as of the effective date of information described in this report, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, without limitation, statements with respect to: (i) the amount of mineral reserves and mineral resources; (ii) the amount of future production over any period; (iii) the amount of waste tonnes mined; (iv) the amount of mining and haulage costs; (v) cash costs; (vi) operating costs; (vii) strip ratios and mining rates; (viii) expected grades and ounces of metals and minerals; (ix) expected processing recoveries; (x) expected time frames; (xi) prices of metals and minerals; (xii) mine life and mine plans; (xiii) capital expenditures; and (xiv) success of exploration activities. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions of future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "envisages", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

All forward-looking statements are based on the Company's or its consultants' current beliefs as well as various assumptions made by and information currently available to them. These assumptions include, without limitation: (i) the presence of and continuity of metals of the Company's mines and mineral properties at modeled grades; (ii) the capacities of various machinery and equipment; (iii) the availability of personnel, machinery and equipment at estimated prices; (iv) exchange rates; (v) metals and minerals sales prices; (vi) appropriate discount rates; (vii) tax rates applicable to the mining operations; (viii) cash costs; (ix) anticipated mining profits; (x) metals recovery rates, (xi) reasonable contingency requirements; and (xiii) receipt of regulatory approvals on acceptable terms. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rate of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, but specifically include, without limitation, risks relating to variations in the mineral content within the material identified as mineral reserves and mineral resources from that predicted, changes in development or mining plans due to changes in logistical, technical or other factors, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices and currency exchange rates, possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate resources, changes in project parameters as plans continue to be refined, changes in project development and production time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, successful completion of proposed acquisitions, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes, as well as those risk factors discussed or referred in the AIF dated March 22, 2013, a copy of which may be found under the Company's profile on SEDAR at www.sedar.com. The foregoing list of factors that may affect future results is not exhaustive.

When relying on our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on behalf of the Company, except as required by law.

The forward-looking statements contained herein is presented for the purpose of assisting investors in understanding the Company's expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company's plans and objectives and may not be appropriate for other purposes. The reader is also cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability.