EMED Reports Progress in Developing its Detva Gold Project by Entering into a Collaboration Agreement including an Option to Acquire Industrial Property Adjacent to its Biely Vrch Gold Deposit
EMED Mining Public Limited ("EMED Mining" or the "Company"), the Europe-based minerals development and exploration company, is pleased to announce that it has executed a formal collaboration agreement with Slavia Tools, owner of a factory facility directly adjacent to the Biely Vrch Gold Deposit.
The collaboration agreement is aimed to ensure that, upon the development of the Biely Vrch Gold Deposit, EMED Mining will have the right to fund the transfer of Slavia Tools to new special-purpose premises within the same district and subsequently convert the old Slavia Tools premises for EMED Mining's own gold production infrastructure requirements. Both companies have formally agreed to work collaboratively with the affected workforces, the relevant communities, the regulatory authorities and other stakeholders to maximise the increase in local employment and avoid any business interruption to either organisation. The principal elements of the collaboration agreement include:
· completion of EMED Mining's legal due diligence during the current month;
· EMED Mining to pay an option fee to Slavia Tools of €340,000, which Slavia Tools will apply to detailed planning for its possible new facilities on alternative sites in the same district. The site selection will be up to Slavia Tools;
· For the next ten years, EMED Mining will have the option to pay €11 million to fund construction of new premises for Slavia Tools and to acquire the old premises for its own use, upon the permitting of Biely Vrch and the Company's commitment to develop a mine.
Chief Executive of Slavia Tools, Dr Halil Erdal Parlar said, "We welcome the collaboration with EMED Mining. We will work together to protect our respective local businesses from any interruption. At the same time, we will work together to generate further employment opportunities in the local district which is experiencing a deterioration in economic prospects. This arrangement is a win for Slavia Tools, a win for the local communities and a win for EMED Mining. We have a mutuality of interests."
Managing Director of EMED Mining, Mr Harry Anagnostaras-Adams said, "Our agreement with Slavia Tools is an important step for de-risking the potential development of the Biely Vrch Gold Deposit. During the past month we have also held discussions with the newly formed Government, its administration and the local communities. To increase community understanding and consultation at this early stage of assessing project alternatives and feasibility, the Company has voluntarily agreed to prepare two reports on our project: a Preliminary Social Impact Study and a Preliminary Techno-Economic Study. This is now a project of recognised regional and national importance."
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Detva Gold Project Description
EMED Mining is advancing its 100%-owned Biely Vrch gold deposit, which is a potential greenfields development of an open pit gold mine. Biely Vrch gold deposit contains Indicated Resources of 461,000 ounces (17.7 million tonnes at 0.81g/t gold) and Inferred Resources of 596,000 ounces (24.0 million tonnes at 0.77g/t gold).
A revised Scoping Study completed by AMC Consultants (UK) Ltd in June 2010 confirmed the attractive economics of developing a mine at Biely Vrch based on a gold price of US$800/ounce (currently >US$1,600/ounce). The envisaged project has the following parameters:
· Initial capital cost of ~US$64 million including the acquisition of additional lands;
· 3 million tonne per annum, heap-leach operation;
· Open-pit mine with average waste-to-ore strip ratio of 0.84 to 1;
· Mine plan tonnage of 27.5 million tonnes at 0.86g/t gold, containing 756,000 ounces of gold;
· Overall gold recoveries averaging 81%;
· Annual gold production of 60,000 ounces at an average C1 cash cost of ±US$530/ounce, and
· An indicative net present value in the order of US$200 million at current gold prices.
The Scoping Study is preliminary in nature and includes Inferred Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as ore reserves, and there is no certainty that the preliminary assessment will be realised. The capital cost noted above is a preliminary estimate derived in 2010 which will be updated in due course.
Detva Gold Project Permitting
The Group has been granted Protective Deposit Status over the Biely Vrch gold deposit and an application for a Mining Lease Area has been made. Thirty eight state, regional and local regulatory bodies have consented to the Company being granted its Mining Lease Area. A non-opposition resolution was also signed by the local Landowners Co-operative in the Mining Lease Area over Biely Vrch.
EMED Mining is working towards reaching various agreements with local parties directly impacted by the potential development. However, there has been recent opposition by anti-mining lobby groups and a series of community briefings and consultations are being conducted in the local towns and villages on a regular basis with direct participation by the Group Managing Director and Slovakian Managing Director.
In response to public consultations, the Company has voluntarily commissioned a Preliminary Social Impact Study and a Preliminary Economic/Technical Study and will invite input from local communities and action groups. Community and other stakeholder communications and consultations will be the primary focus for 2012 and priorities will be re-assessed as practical possibilities are developed.
This announcement contains "forward looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, the future price of metals, the estimation of ore reserves and resources, the conversion of estimated resources into reserves, the realization of ore reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Accordingly, readers should not place undue reliance on forward looking statements.
Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; the future costs of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorist attacks, insurrection or war; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in the Company's annual information form.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward looking statements contained herein are made as of the date of this announcement and the Company disclaims any obligation to update any forward looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.
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