Altyngold Regulatory News (ALTN)

10 Mar 2008 07:02

Hambledon Mining PLC10 March 2008 HAMBLEDON MINING PLC (AIM: HMB) Sekisovskoye Update - Inquiry conclusions and restart of operations Hambledon Mining plc ("Hambledon" or the "Group" or the "Company"), theAIM-listed gold mining and processing company operating in Kazakhstan, announcesthe partial restart of operations at its gold mine at Sekisovskoye. Thisfollows the conclusion of the investigation into the boiler accident on 12February 2008. A replacement boiler has been ordered and this is expected to beon site and installed in time for the overall plant to be in full operation bymid April. Conclusions of the investigation The committee appointed by the Department of Labor and Social ProtectionMinistry of the Republic of Kazakhstan in Eastern Kazakhstan Region (the "Committee") has completed its investigations. The Committee found that, although there had been a comprehensive testing ofequipment and process at the plant, the cause of the accident was a smallexplosion in the burner side of the boiler, resulting from incorrect adjustmentof the fuel-air mixture, causing the rupture of the main liquid vessel. Faultwas attributed to incorrect procedures and modifications by several of theCompany's employees, manufacturing faults in the boiler itself, incorrectselection of equipment and operation of the boiler by non-specialist staff. TheCommittee concluded that the Company was responsible and no fault was attributedto the operator who died. The Committee ordered that four employees be removedfrom their positions, one of whom the Company has subsequently dismissed. Threefurther employees have been fined. No fines were imposed on the Company. Restarting of operations The Company is permitted to restart all operations at the plant immediately,except for the redesigned elution boiler which will need to be inspected andapproved by the Committee for State Control over Emergencies and IndustrialSafety. The crushing plant will be restarted shortly, with the intention ofbuilding up a stockpile of crushed ore prior to the restart of the overall plantby mid April 2008. Mining operations, which were suspended after the accidentto conserve cash, will not be restarted until the beginning of May as astockpile of some 150,000 tonnes of ore already exists. In addition to a small quantity of gold and silver in dore form, approximatelysix kilogrammes of gold are on steel wool ready for smelting and a further 30kilogrammes are on carbon awaiting the recommissioning of the elution system. In order to safeguard the availability of the workforce, no employees have beenlaid off or put on short-time working. During the closure, employees have beentransferred to other activities and have received additional training.Additional suitably qualified personnel are being employed in readiness tooperate the replacement boiler, once the plant is in full operation again. Replacement boiler The Company is using specialist boiler-consultants, who were approved by theCommittee for State Control over Emergencies and Industrial Safety, to design,specify and install the new elution boiler and associated equipment. Thisdesign, which meets all of the points raised by the Committee in its findings,has already been completed and a suitable, ready-made boiler has been locatedand ordered from a manufacturer in Beesk, just 300 miles from the mine siteacross the Russian border. The manufacturer has agreed to procure and fit thenecessary peripheral equipment, ready for shipment by the end of March with afurther two weeks for it to be trucked to site and installed. The Companyanticipates that approval will be given shortly thereafter, enabling alloperations at Sekisovskoye to be up and running again by mid April 2008. Funding position The Company is closely monitoring the impact on the cash flow and presentindications are that the Company's current funds are sufficient. The Company isin negotiations with its bankers for stand-by finance as an option in case itshould be needed. Nick Bridgen, Chief Executive of Hambledon, commented: "We appreciate the speed with which the Ministry has completed its report andwill action all its recommendations. We are now working to bring the operationback into production as quickly as possible and we expect to be fullyoperational by mid April. We extend our deepest sympathies to the family of theoperator and are offering personal support to them at this difficult time." Enquiries Hambledon Mining plc Telephone: +44 7791 327 180Nick Bridgen Bankside Consultants Telephone: +44 20 7367 8888Michael Padley Seymour Pierce Telephone: +44 20 7107 8000Nicola Marrin Note to editors Hambledon Mining plc is an AIM-listed gold mining and exploration company, whichis operating the Sekisovskoye gold mine and the Ognevka processing plant, bothof which are close to Ust Kamenogorsk in East Kazakhstan. At Sekisovskoye, the Company is mining from an open pit and has constructed an850,000 tonnes per year treatment plant. Production from the open pit willaverage over 40,000 ounces per annum. After the re-start of open pitprocessing, the Company plans to develop the much larger underground resourcethat is expected to lead to a combined production rate of around 100,000 ouncesper year. The Ognevka processing plant is producing concentrates containing gold, silver,copper, iron and coke from the re-treatment of zinc smelter residues. This information is provided by RNS The company news service from the London Stock Exchange