Altyngold Regulatory News (ALTN)

29 Jan 2007 07:01

Hambledon Mining PLC29 January 2007 PRESS INFORMATION 29th January 2007 HAMBLEDON MINING PLC US$16m Placing, two Acquisitions Update on Sekisovskoye (All references to "£" are to the British Pound, "$" are to United States dollars and "ounces" are to troy ounces) Hambledon Mining plc ("Hambledon" or the "Group" or the "Company"), theAIM-listed mining and exploration company developing precious metal deposits inKazakhstan, is pleased to announce it has raised a total of $16 million (afterexpenses) by way of a placing ("the Placing") of new ordinary shares of 0.1pence in the Company ("Ordinary Shares") to fund two acquisitions and associatedplanned developments, and to provide working capital for the Group. The Companyalso confirms that its Sekisovskoye project remains on schedule with productionexpected to start in mid-2007. Highlights •Acquired "TOO Ognyovka", owner of the Ognyovka treatment plant •Entering final negotiations to acquire a Kazakh company which holds the rights to gold deposits estimated to contain 600,000 ounces of gold •Raised $16 million from a placing of the Company's shares to finance the acquisitions and the associated planned developments Sekisovskoye update •Mining operations continuing over winter at planned rate •All foundations and major plinths completed •Erection of leach tanks commenced •Tertiary mill installed •Notification of readiness for shipment of first primary mill received •Jaw crusher being installed, retaining wall, feed bin and vibrating feeder completed •Store building completed •Boiler received on site •Start of commissioning of process plant on schedule for the second quarter 2007 Nicholas Bridgen, Chief Executive of Hambledon Mining plc, commented: "At Sekisovskoye, mining and construction of the process plant are proceedingwell. We are on budget and on schedule. We expect commissioning to start in thesecond quarter of this year. "The two acquisitions mark a significant stepping up of the scale of ouroperations. They not only add additional resources to our growing existingdeposits but, more importantly, provide near term cash flow and are capable ofmultiplying our free cash flow several times over. This will increaseprofitability and will provide us with a stronger financial base". Placing The Company has raised a total of $16 million (after expenses) by way of thePlacing to new and existing investors of 57,022,000 new Ordinary Shares at anissue price of 15p per Ordinary Share. The capital raised will provide the Company with funds to finance theacquisition of Ognyovka and of a second Kazakh company with gold deposits, aswell as associated planned developments and working capital for the Group. Esterel Trust, a discretionary trust of which George Eccles, the Chairman ofHambledon, is a potential beneficiary, acquired 33,000 ordinary shares pursuantto the Placing and, accordingly, Mr Eccles is now interested in 144,750 ordinaryshares representing 0.003 per cent. of the issued ordinary share capital of theCompany. Application has been made for the admission of the new Ordinary Shares totrading on AIM and dealings are expected to commence on 31 January 2007. Ognyovka processing facility We are pleased to announce the acquisition of TOO Ognyovka, owner of theOgnyovka processing facility. The processing facility is configured to treat up to 350,000 tonnes per year ofthe copper, gold and silver-containing residues (slag) from zinc smelters.By-product concentrates of iron ore and coke will also be produced. The firststages of a significant expansion of the facility have already been completed bythe previous owners, including an extension of the mill building, constructionof the ore handling system and mill-feed storage bins. Maximum production from the existing facility will depend on the content of theslags treated. Typically, these may contain from 1.5% to 2.2% copper, 1 to 4grammes per tonne of gold and around 150 grammes per tonne of silver.Metallurgical recoveries will be lower than those typical from the treatment ofprimary ores but nevertheless are expected to lead to a highly profitableoperation. Contracts for the procurement of slag and for the sale of the main concentrateare in place. The processing facility has been closed for over two years and TOO Ognyovka iscurrently undergoing a process of rehabilitation under court protection fromcreditors which currently total some $3.8 million. Hambledon will acquire thedebts of the principal creditor, with a nominal value of $2.7 million, for acash payment of $1.7m, and will then have the right to buy TOO Ognyovka itselffor approximately $8,000. Of the remaining debts, $0.3m must be paid in cashimmediately. Under the rehabilitation plan submitted, which is expected to beapproved, the remainder will be paid over the following three years out ofearnings. The process facility, though old, is in good condition. The Company plans torecommission the existing facilities and is likely to complete the plannedexpansion. Acquisition of gold company Negotiations are currently being finalised for the acquisition of a companywhich holds the rights to two deposits with resources approved by the Kazakstanauthorities totalling some 600,000 ounces. Further details will be publishedupon completion and signature of the acquisition agreement. The Directors consider that the acquisition, which has been agreed in principleby all parties, is highly likely to be completed. In the event that it is not,the funds allocated to this will be used to accelerate the development ofunderground mining at Sekisovskoye, further exploration, and for other corporatepurposes. On completion, the acquisitions announced today are expected to enhance anddiversify the Company's portfolio, thereby providing a firm base for theCompany's future growth. Sekisovskoye update Mining operations have recommenced after a brief shut down over the Christmas /New Year period. Excavation activities continue to operate at planned rates withexcellent results being obtained from the local blasting contractor. Currently,waste material being mined is being used for the construction of the tailingsdam and the completion of the ore stockpile pad. Ore mining is being deferreduntil March for direct placement on the stockpile. Orders for the final two BelAZ dump trucks and second bulldozer have been placedwhich will complete the entire planned mining fleet for the life of the openpit. Maintenance agreements with Atlas Copco and Hitachi have been put in place toensure that the initial high equipment availabilities are maintained and thetraining of the Sekisovskoye maintenance team is enhanced. Construction of the process plant continued through the Christmas and New Yearperiod. Erection of the main CIL leach tanks commenced in early January. All steelwork and sandwich panelling for the process plant building has beenreceived and is either stored on site or in Ust-Kamenogorsk. Erection of thebuilding commenced in mid January. Manufacture of the two main 1.2 megawatt ball mills is complete with dispatch ofthe primary mill scheduled for before the end of January and the second in midFebruary. The mill plinths for the primary and secondary mills have beencompleted. The mechanical installation of the tertiary mill is already complete. Installation of the crushing circuit is progressing with the completion of theretaining wall, installation of the feed bin and vibrating feeder. The jawcrusher is ready for installation. All crushing and conveying foundation work iscomplete and all conveyor frames and belts have been received and are currentlystored on site. All foundation work for the boiler house has been completed and the modularboiler has been received. Technicians from the Russian manufacturer are expectedonsite in late January to supervise the installation and commissioning. Construction of the site store building is now complete. The electrical substation site is complete. The main 16MW transformer has beendelivered to site and the installation of the power line is nearing completion.All small 6kV/440V transformers have been received and are awaitinginstallation. The 500kVA back-up generator has also been delivered. Overall, the process plant construction is on schedule for start-up in Quarter2, 2007 and the Directors are very pleased with the progress made to date. Exploration drilling was temporarily stopped for the holiday period andrecommenced in mid January. Enquiries Hambledon Mining plcNicholas Bridgen, Chief Executive Telephone: +7 701 733 8915 Bankside ConsultantsMichael Spriggs / Michael Padley Telephone: +44 207 367 8888 Note to Editors' Hambledon Mining plc is an AIM-listed mining and exploration company which isdeveloping an open pit mine and constructing an 850,000 tonnes per yeartreatment plant at its Sekisovskoye gold deposit in East Kazakhstan. After thestart of open pit processing, the Company plans to develop the much largerunderground resources. Production from the open pit will average over 40,000 ounces per annum for fiveyears, though this is expected to rise to around 100,000 ounces when the highergrade underground ore is added to the feed. The Company also holds the rights toand is exploring the adjacent Tserkovka licence territory which includes severalareas of interest including the Tserkovka deposit itself. Ends This information is provided by RNS The company news service from the London Stock Exchange