Acadian Mining reports first profit from operations

    Trading Symbol: ADA:TSX; C2Z-Frankfurt
    Shares Outstanding: 142,312,907

    HALIFAX, May 16 /CNW/ - Acadian Mining Corporation (TSX: ADA) ("Acadian"
or the "Company") announced its first quarter financial results for the three
months ended March 31, 2008 and information on its Scotia Mine operations,
highlights of which are presented in Tables 1 & 2 below. Complete financial
statements, management's discussion and analysis of results, and letter to
shareholders are available on the regulatory filing site, www.sedar.com and
the Company's website, www.acadianmining.com, and should be read in
conjunction with this news release.
    The Company realized net income of $912,173 on revenues of $9,832,088
from zinc and lead concentrate sales for the quarter. This quarter marks the
first profits the Company has had as a producer of base metals.

    Table 1 - Financial Highlights

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                                                      Quarter ended March 31
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                                                      2008              2007
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                                                         $                 $
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    Revenue                                      9,832,088                 -
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    Operating income (loss)                        950,997          (867,370)
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    Net income                                     912,173           600,061
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    Income per share                                  0.01              0.01
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                                            March 31, 2008 December 31, 2007
    -------------------------------------------------------------------------
    Cash and equivalents                         1,285,667         3,022,687
    -------------------------------------------------------------------------
    Working capital                              5,483,883         6,920,319
    -------------------------------------------------------------------------
    Total assets                                64,223,241        63,043,437
    -------------------------------------------------------------------------

    Operating profit of $950,997 did not meet management's target for the
period and was principally due to the unanticipated interruption of operations
in the pit. This event resulted from extreme volumes of run-off water due to
heavy rains and spring thaw which overwhelmed the polishing pond discharge
weir, necessitating shutting down the pit pumps. While corrective measures
were implemented to avoid future problems of this nature, this event also
negatively impacted production levels for much of April, during which time the
plant processed material from low grade, higher level pit benches and stock
piles. The mine returned to normal operating conditions in late April, and as
such, improvements in production and financial results are anticipated in the
second quarter of 2008.
    Cash cost per pound of payable metal (zinc and lead) sold for the period
was $0.72, which exceeded the cost for the six month operating period in 2007
by $0.04. The slightly increased cost of production reflects the above
described production issues experienced in March.
    Operational highlights for the quarter are presented in Table 2 below.

    Table 2 - Operational Highlights - Quarter ended March 31, 2008

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    Production                                        Q1 - 2008    YE - 2007
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    Ore milled                    Tonnes                173,433      336,534
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    Head grade - zinc             Percent                  1.99         2.13
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    Head grade - lead             Percent                  1.09         0.88
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    Recovery - zinc               Percent                 75.21        73.11
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    Recovery - lead               Percent                 87.42        76.41
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    Zinc concentrate              Tonnes dry              4,253        9,200
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    Zinc concentrate              Grade %                 54.64        55.49
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    Zinc metal                    Tonnes                  2,324        5,105
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    Zinc metal                    Pounds              5,123,862   11,255,307
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    Lead concentrate              Tonnes dry              2,116        3,579
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    Lead concentrate              Grade %                 70.15        60.43
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    Lead metal                    Tonnes                  1,484        2,163
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    Lead metal                    Pounds              3,272,680    4,768,537
    -------------------------------------------------------------------------
    Metals Sold - Cost of Production
    --------------------------------
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    Zinc                          Tonnes                  2,568      4,910.7
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    Zinc                          Pounds              5,661,589   10,826,085
    -------------------------------------------------------------------------
    Lead                          Tonnes                  1,895      1,140.0
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    Lead                          Pounds              4,178,026    2,515,440
    -------------------------------------------------------------------------
    Zinc & lead                   Total pounds        9,839,615   13,341,525
    -------------------------------------------------------------------------
    Cost of production sold                          $7,124,843   $9,068,838
    -------------------------------------------------------------------------
    Cost of production sold       Per pound zinc &
                                  lead               $     0.72   $     0.68
    -------------------------------------------------------------------------
    Cost of production sold       Per tonne milled   $    35.06   $    32.36
    -------------------------------------------------------------------------

    The Company's first quarter zinc and lead production was 34% and 22%,
respectively, below target, which was due to a combination of not reaching the
planned mine benches in accordance with the pit schedule and operational
disruptions described above. Failing to reach the planned mine benches in
accordance with the pit schedule resulted in lower head grades to the mill.
The average zinc head grade for the period was 2.00%, which was 77% of plan
for the period and the average lead head grade was 1.09% which was 84% of
plan. Zinc and lead recoveries in the mill were 75.21% and 87.42%
respectively, which was 11.7% and 2.9% below plan, and can be attributed
principally to lower head grades during the month of March. Improvements in
recoveries continue to be made with May (month to date) zinc recoveries at
83.38% with a concentrate grade of 59.13% zinc, and lead recoveries at 89.34%
with a concentrate grade of 71.61%. Mill throughput for the quarter averaged
2,000 tpd at 95% mill availability. Planned improvement to the crushing
circuit in Q2 is expected to increase throughput to 2,400-2,500 tpd.
    Despite reduced levels of production in March and April, the Company
remains confident of achieving the targeted production of 30,000 tonnes of
zinc concentrate and 12,000 tonnes of lead concentrate in 2008. The projected
production is approximately 31.6 million pounds of payable zinc and
16.7 million pounds of payable lead.

    Management Opinion
    ------------------

    Will Felderhof, President & CEO stated: "Despite various challenges that
surfaced during Q1 we are pleased with the present status of operations. The
outlook for Acadian Mining in 2008 remains positive."

    Proposed Spinout of Gold Assets
    -------------------------------

    The Company recently announced the proposed spin-out of its gold assets
into a separate public company, Annapolis Gold Corporation ("Annapolis"),
shares of which will be distributed to shareholders on the basis of one share
of Annapolis for every four shares held in Acadian. The proposed "plan of
arrangement" is subject to receipt of all necessary shareholder, court and
regulatory approvals. For details, see the Company's News Release No. 05-08,
April 18, 22008 and the Management Information Circular recently mailed to
shareholders and filed on SEDAR. Shareholders are being asked to approve this
corporate restructuring at the Company's Annual and Special Meeting scheduled
for June 9, 2008.

    About the Company
    -----------------

    Acadian is a Halifax, Nova Scotia, Canada based mining company which
operates a zinc-lead mine (Scotia Mine) at Gays River, Nova Scotia and is
exploring and developing gold, zinc-lead, and barite properties in Atlantic
Canada.
    The Scotia Mine operates as an open pit mine and is expected to produce
30,000 tonnes of high grade zinc concentrate and 12,000 tonnes of high grade
lead concentrate per year. See the Company's News Release No. 16-06, July 17,
2006 for further details.
    The Company is also focused on developing four advanced gold properties,
Beaver Dam, Tangier, Forest Hill and Goldenville, which form the core holdings
of the Scotia Goldfields project. Each of the four advanced properties host
gold resources described in technical reports prepared in compliance with
National Instrument 43-101 and are available on www.sedar.com. A summary of
gold resources for Goldenville, Forest Hill and Tangier is provided in News
Release No. 01-06, January 5, 2006, under the paragraph titled "About Acadian
Gold". A summary of gold resources for Beaver Dam is provided in News Release
No. 23-07, July 16, 2007. The Company is bringing a new approach to the
development of Nova Scotia gold deposits by pursuing a multiple mine, central
processing, managing and servicing strategy.
    The Company holds a 44.42% equity interest in Royal Roads Corp. ("Royal
Roads") (RRO-TSX-V). Royal Roads' principal asset is a 16,075 hectare
(approximately 32 km x 5 km) mineral property known as the Tulks North
property which is strategically located in the centre of the world-class
Buchans base metal camp in central Newfoundland, Canada. In addition, Royal
Roads holds a 26.4% equity interest in Buchans River Ltd. ("Buchans River")
(BUV-TSX-V), which also holds a highly prospective property portfolio in the
Buchans camp. Acadian's indirect interest in Buchans River is 11.7%.

    Forward Looking Statement
    -------------------------

    Certain information regarding the Company contained herein may constitute
forward-looking statements within the meaning of applicable securities laws.
Forward-looking statements may include estimates, plans, expectations,
opinions, forecasts, projections, guidance or other statements that are not
statements of fact. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. The Company
cautions that actual performance will be affected by a number of factors, many
of which are beyond the Company's control, and that future events and results
may vary substantially from what the Company currently foresees. Discussion of
the various factors that may affect future results is contained in the
Company's 2006 Annual Report which is available at www.sedar.com. The
Company's forward-looking statements are expressly qualified in their entirety
by this cautionary statement.

    For additional information on the Company's properties and activities,
please visit our web site at www.acadianmining.com. If you wish to be added to
the Company's e-mail or fax distribution list for future news releases and
updates, please contact Acadian at phone: 902 444-7779, fax: 902 444-3296,
email: mail@acadianmining.com.

    No regulatory authority has approved or disapproved the contents of this
    release.

For further information: G. William Felderhof, President & CEO; Terry F.
Coughlan, Vice President, (902) 444-7779, Toll Free: (877) 444-7774,
mail@acadianmining.com