Altyngold Regulatory News (ALTN)

19 Nov 2007 07:01

Hambledon Mining PLC19 November 2007 PRESS INFORMATION 19 November 2007 HAMBLEDON MINING PLC Update on Sekisovskoye & Ognevka and Placing to raise c.£4 million (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 processing company operating in Kazakhstan, is pleased toannounce continuing progress in mining, construction and commissioning of theSekisovskoye gold project and the Ognevka treatment plant for production ofcopper/gold/silver concentrates. Highlights Sekisovskoye: €1.3 million cubic metres of material moved since the start of operations •Stockpile of 145,000 tonnes of ore with a grade of 1.46 grammes per tonne •Mill commissioning commenced, production scheduled to start mid December •Mining costs lower than projected Ognevka: •Test work confirms expected metallurgical recoveries •Refurbishment of process plant nearing completion and commissioning started •Production scheduled to start in early December •Sampling and testwork of the pegmatite tailings has commenced Finance: •Placing of 22,967,606 shares to raise approximately £4 million before expenses Nicholas Bridgen, Chief Executive of Hambledon Mining plc, commented: "Both projects are nearing completion and will become operational very shortly.Sekisovskoye has been delayed by the late delivery of equipment and an acuteshortage of skilled construction staff, but everything is now in place and weare expecting our first gold bar by Kazakhstan's Independence Day on 16thDecember. "Our expectations for Ognevka have always been far higher than its smallpurchase price indicated, so it is very good news to have these expectationsconfirmed by the testwork and sampling that we have carried out. Therefurbishment of Ognevka is on budget and we appear to have acquired a veryvaluable asset for a very low price." Enquiries Hambledon Mining plcNicholas Bridgen, Chief Executive Telephone: +7 701 733 8915+44 7791 327180 Bankside ConsultantsMichael Spriggs / Michael Padley Telephone: +4420 7367 8888 Seymour PierceNicola Marrin Telephone: +4420 7107 8000 Sekisovskoye Mining operations have continued and the initial tailings dam has beencompleted. Over 145,000 tonnes of ore grading 1.46 g/t Au have been stockpiledpending milling start-up. Mining efficiencies have exceeded expectations andmining costs are lower than projected. Some 1.29 million cubic metres ofmaterials had been moved by the end of October 2007. In addition to the Company's mining fleet, which has been operating for over ayear now, the Company has purchased its own tailings dam construction fleet,including two MoAZ scrapers, a second Dressta 534 front-end loader and twoKamAZ, 20 tonne capacity trucks. Most of this equipment has now arrived and willallow all future tailings dam construction for the project to be carried out bySekisovskoye, resulting in considerable cost savings in tailings damconstruction over the life of the mine. A feasibility study on the development of the large underground ore resource isnearing completion by AMC Consultants (Perth, Australia). Underground minedevelopment is expected to begin late in 2008 through a decline roadwayintercepting Orebody 11, a near surface high grade ore zone. This access roadwaywill ultimately tie in with the existing underground infrastructure on the 320level (120 metres below surface), thereby allowing relatively easy access to theother ore zones. Mill construction is nearing completion and commissioning activities havecommenced. The crushing plant is already operating to produce gravel forroadways and other construction purposes but will be switched to crushing oreonce the mill is started. Various items of mill equipment have now beentest-run, including Ball Mill 3, the smaller leach and reagent agitators, sumppumps, water pumps and the vibrating screens. All the main electrical cabling iscomplete, including backup power for emergencies, and water pipelines have beenpressure and leak tested. Following the very late delivery of our main ballmills, installation is now complete and test running is imminent. All permitting is in place with the exception of the hazardous chemicals storageand cyanide use licences, which have been affected by recent changes toKazakhstan legislation. We have completed all requirements and are expecting thegranting of the licences by the end of November 2007. Start-up of operations isexpected to commence soon after. Initial gold production is expected to be 40,000 oz per year increasing to100,000 oz per year when higher grade underground ore is processed. Geology & exploration As part of mining grade control activities, some 220 angle drill holes have beendrilled in the current and near-term mining areas to provide additionalinformation for the orebody model. As previously announced, a significantincrease in contained gold has been indicated compared with the model on whichthe Company's estimate of resources is based. Exploration drilling has focussed on several significant targets within the mainSekisovskoye lease area, most of which are known or projected extensions of themain Sekisovskoye ore zones. Certain targets on the Tserkovka licence arearemain to be explored and a decision will be taken on these next year. Ognevka processing facility The processing facility is configured to treat up to 350,000 tonnes per year ofthe copper, gold and silver-containing residues (sinter slag or "clinker") fromthe zinc smelters in East Kazakhstan and Russia. A single concentrate containingthe copper gold and silver will be produced for sale to copper smelters andby-product concentrates of iron and coke will be sold separately. Initial production will involve the re-treatment of 150,000 tonnes of high gradetailings of previously treated clinker. Thereafter, clinker will be procuredfrom other companies that have large stockpiles, for which they currently payenvironmental penalties. The flexibility of the plant will allow for thetreatment of various other feedstocks, including feldspar tailings (recovery ofsaleable feldspar, lithium and tantalum concentrates), pegmatite ores (tantalum,tin, mica and feldspar concentrates) or other clinker or smelter slagscontaining valuable metals, via gravity, magnetic separation or flotationmethodologies. The plant building has been expanded to allow for an increase inthroughput. Refurbishment of the processing and infrastructure facilities, includingreplacement of key equipment items, is very near completion, and test-running ofall mills, vacuum pumps, tailings pumps, concentration devices, flotation cells,and the crushing plant has already taken place. Final installation andcommissioning of new filters should be completed in November along withpreparation of the tailings storage facility to allow for the start ofproduction around the beginning of December 2007. Although high in grade, clinkers are difficult to treat and expectedmetallurgical recoveries are low compared with those obtainable from primaryore. Although records had indicated the grades of clinker currently on site andthe likely level of metallurgical recovery to be achieved, the Company chose tosample the clinker and to carry out testwork to confirm the choice of treatmentregime and expected recoveries. Preliminary results have confirmed previousexpectations: Component Grade of Average grade of on-site Percentage of material sample used clinkers determined from recovered in testwork in test work sampling Copper 1.15 % 2.1 % 58 %Gold 2.6 g/t 1.22 g/t 32 %Silver 120 g/t 118.7 g/t 51 %Iron 23.2 % 24.3 % 46 %Carbon 15.8 % n.a. 69 % Work is outstanding to test the recoveries obtainable from further treatmentregimes developed by the Company and these may result in higher recoveries thanthose indicated above. The copper concentrate produced by this process is of lower grade than standard,resulting in a discount from customers compared with usual concentrate prices.Currently available prices are 45% of LME for copper content and 70% of spotmetal prices for gold and silver. Toll-treatment options are being investigatedwhich are likely to improve these terms significantly. At the expectedmetallurgical recoveries and currently available prices, the revenue from eachtonne of clinker treated, including by-products, is expected to be over $75. First production of copper-gold-silver concentrate is expected in early December2007. A sampling and testwork programme has already started on the potentially muchmore valuable pegmatite tailings. The pegmatite tailings include not only themain mineral, feldspar, but also high grades of lithium, beryllium, and othermetals. The deposit, which contains the primary pegmatite, lies underneath theOgnevka processing plant and although the rights to this deposit are notcurrently held by the Company, consideration will be given to applying for theserights. Placing The Company previously announced that it had negotiated a loan facility with alocal Kazakhstan bank for working capital and to complete the commissioning ofthe processing facilities. As a result of the international restrictions on theavailability of credit in recent months the expected funds were not availableand the Company sought a more certain means of funding. For this reason, theCompany has placed 22,967,606 shares of newly issued stock to raiseapproximately £4 million before expenses. This sum is considered by thedirectors to be adequate to cover not just the immediate needs of the companybut also a significant contingency in case of unexpected commissioning problemsin either project. Any surplus will be used to accelerate the development of theunderground mine at Sekisovskoye and the expansion of Ognevka. Note to editors Hambledon Mining plc is an AIM-listed gold mining and exploration company whichis developing the Sekisovskoye gold mine and owns the Ognevka processing plant,both of which are close to UstKamenogorsk in East Kazakhstan. At Sekisovskoye, the Company is mining from an open pit and constructing an850,000 tonnes per year treatment plant. Production from the open pit willaverage over 40,000 ounces per annum. After the start of open pit processing,the Company plans to develop the much larger underground resource that isexpected to lead to a combined production rate of around 100,000 ounces peryear. The Ognevka processing plant is being refurbished and will produce concentratescontaining gold, silver, copper, iron and coke from the re-treatment of zincsmelter residues. Ends This information is provided by RNS The company news service from the London Stock Exchange