Last checked at 14 Nov 2008 07:00
AIM: EMED 14 November 2008
APPOINTMENT OF LEAD-ARRANGER FOR FINANCING
EMED Mining Public Limited ("EMED Mining" or "the Company") announces that it has appointed Goldman Sachs International ("Goldman Sachs") as lead-arranger for arranging and structuring the project finance, copper price hedging and related guarantee and finance facilities (the "PRT Project Financing and Commodity Hedging") required by its wholly-owned subsidiary in Spain EMED Tartessus S.L ("EMED Tartessus") for the potential restart of operations at Proyecto de Rio Tinto ("PRT"").
The appointment of Goldman Sachs as lead-arranger of the PRT Project Financing and Commodity Hedging is another step forward in the preparations for restart of the PRT. The project and PRT Project Financing and Commodity Hedging may only proceed after all regulatory requirements are satisfied and the relevant approvals from government agencies and EMED Mining shareholders are received. In the meantime EMED Mining continues to make preparations at the operating site, to progress the permitting process and to resolve the remaining negotiations with private landholders and government agencies.
Harry Anagnostaras-Adams, Managing Director of EMED Mining, commented:
"We have done a lot of work in Spain to clean up the complicated legal structure and overcome the disputational relationships we inherited. We have also been busy at site to prepare for the restart in a safe and efficient manner. These tasks have been carried out with the advice and support of leading international legal and industry specialists such as our legal advisers Baker McKenzie and international mining experts AMC Consultants.
Local stakeholders have held historical distrust of parties associated with the project however we believe that we are beginning to demonstrate the benefit of our endeavours and to establish trust in our local relationships. The Company is certainly determined to ensure that PRT is restarted in a responsible manner. EMED Mining's major shareholders, Directors and management are all industry specialists with extensive international mining experience and have no association with the past problems or parties at this site. The Company prides itself on its integrity, transparency and its focus on progress in accordance with relevant local and international standards."
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Enquiries
| EMED Mining | Fox-Davies Capital | RFC Corporate Finance | Bishopsgate Communications |
| Harry Anagnostaras-Adams | Daniel Fox-Davies | Stuart Laing | Nick Rome |
| +357 9945 7843 | +44 (0)207 936 5230 | +618 9480 2500 | +44 (0)207 562 3350 |
Notes to Editors: About EMED Mining Public Limited
EMED Mining Group Activities
EMED Mining is the parent company of a European-focused group of companies formed in late 2004 by mining industry specialists from Australia, where there are 100's of mining enterprises and which operate in compliance with international standards. In May 2005 EMED Mining was admitted to trading on AIM, the London Stock Exchange market for international high-growth companies and is registered in Cyprus which is a member of the European Union and the British Commonwealth. EMED Mining has a strong commitment to responsible development of metal production operations in Europe, with an initial focus on copper and gold.
The Group's region of interest are the tectonic belts spanning across Europe and over to the Middle East. The strategy is to evaluate exploration and development opportunities in several jurisdictions throughout this quality mineral belt and to promote sustainable development practices through implementation of European Union and other leading-edge international standards. The Company strictly implements its Environmental & Community Policy which includes:
Integrating environmental management into our business, planning and reporting processes.
Promoting a strong environmental ethic throughout the Company and the community.
Complying with, as a minimum, all applicable local and European Union laws and regulations.
Communicating with community stakeholders in a responsible and transparent manner.
EMED Mining has now established a strong position in the following selected zones:
Exploration areas in Slovakia are focused on a cluster of volcanic centres. Low-detection geochemical methods are being applied to these areas for the first time together with open-pit bulk mining concepts. The principal targeted mineralisation style is low-grade, bulk-mineable porphyry gold. The Company has announced gold discoveries at Biely Vrch, Kralova and Slatinske Lazy in Slovakia.
The mines in Cyprus and at Rio Tinto in Spain, located in the Iberian Pyrite Belt, which is probably among the best known in the world for its mineral endowment. EMED Mining's goal is to restart copper production at its projects in both of these well-endowed, historical mining districts. Both Spain and Cyprus are progressive members of the European Union and EMED Mining has been made to feel welcome in both host countries. The styles of mineral deposits and production techniques are similar in both mining districts.
Exploration areas in Turkey were vended into 32%-owned KEFI Minerals Plc which was admitted to AIM in December 2006. KEFI Minerals owns carefully selected licence areas in Turkey, as well as an extensive proprietary database of regional and specific exploration data providing a pipeline of further projects to evaluate. See www.kefi-minerals.com.
For further information on the Company's activities, visit www.emed-mining.com or www.emed.tv.
Shareholders of EMED Mining
The shareholders of EMED Mining are as follows (the figures in brackets are on a fully-diluted basis):
Management and Board 10% (20%)
Resource Capital Funds 15% (13%)
MRI Group 13% (11%)
OZ Minerals (formerly Oxiana) 10% (8%)
Financial institutions 17% (fully-diluted 15%)
(Altima 6% (5%), Fidelity International 5% (4%), RMB Australia 4% (4%))
The Company now has a total of 240,560,661 shares in issue (277,676,726 fully-diluted).
Board and Management
The Board of Directors of EMED Mining now comprises:
Non-Executive Chairman, Ronnie Beevor - Australia-based investor and director of several mining companies. Former Head of Investment Banking , Rothschild Australia;
Group Managing Director, Aristidis (Harry) Anagnostaras-Adams - chief executive in mining investments and mining. Former Deputy Chair Australian Gold Council;
Group Finance Director, John Leach, CFO specialising in international mining companies;
Non-Executive Director, Ross Bhappu - metallurgical engineer. Partner of USA and Australia-based Resource Capital Funds;
Non-Executive Director, Ashwath Mehra - commodities trader. CEO of Swiss-based MRI Group.
Non-Executive Director, Mike Price - mining engineer. UK-based mining finance specialist and former head of resources lending teams at Societe General & Rothschild (UK); and
Non-Executive Director, Gordon Toll - mining engineer. UK-based investor and Director of several mining companies. Formerly senior executive of BHP & RTZ.
The board of directors for EMED Spain S.L., one of the Company's Spanish subsidiaries, report to group management and holding companies and effectively oversees the EMED Group's Spanish activities, including those EMED Tartessus. Plans are now also being formulated to start an exploration subsidiary for the Iberian Pyrite Belt to evaluate other expected opportunities in due course. The Board of Directors of EMED Spain S.L includes:
Guillermo Guiterrez, Chairman - Spain, former Minister for Industry in Andalucia - the responsible minister at the time of its closure in 2001;
Bill Enrico, Managing Director - Spain, experienced CEO for companies involved in copper production in several countries;
John Leach, Finance Director, experienced CFO for various international mining companies.
The management team for EMED Tartessus is being built and includes selected longstanding project management and staff along with transferees from EMED Mining such as Chief Geologist John Ingram and new recruits such as Maintenance Manager Richard Earlam. Staff numbers at site currently total 30, most of whom are long-standing project employees.
After the restart is committed to, over 250-person workforce will initially be required at the Rio Tinto Mine. EMED Tartessus personnel became members of the Socialist Party union in September 2008.
Company Activities in Spain
EMED Mining, through its now wholly-owned subsidiary EMED Tartessus, has been refining plans since early 2007 to restart this long-standing and essentially intact major copper production complex. The Company completed a full Restart Plan in August 2007 (updated since and being updated again) and submitted initial applications to the regulatory authorities in December 2007. Major accomplishments since EMED Mining became involved with the project are:
confirmation that only EMED Tartessus is eligible to be awarded the right to mine at PRT
transformation of the ownership structure;
verification of resources and reserves;
successful testing of key sections of the processing plant; and
establishing trust with court-sanctioned and other legitimate stakeholders and establishing a credible corporate reputation in Spain.
In considering the likelihood of being granted the regulatory consent to proceed with this operationally straightforward restart, it is notable that in recent years there have been more permits for new mine developments and redevelopments in the world class Iberian Pyrite Belt than any other part of Europe. These projects include Las Cruces, Aguas Tenidas and Aguasblancas in Andalucia and Neves Corvo in Portugal.
The Rio Tinto Mine is the most significant known mineral deposit in Andalucia and its potential restart would be a major event. The region is suffering an economic downturn and all major stakeholders are engaging constructively. However the Company's progress has been slower than originally expected due to the financial and other issues related to the relationships inherited and which have now mostly been resolved.
Principal External Specialist Consultants and Advisers
The principal external experts assisting the due diligence of EMED Mining and EMED Tartessus are:
AMC Consultants UK Ltd ("AMC") - mining operational and project economics;
GBM Minerals Engineering Consultants Ltd - plant inspections and assessment;
United Research Services Espana S.L. - tailings dam classification;
LN Metals International Ltd - product marketing;
Oakvale Capital Ltd - hedging and currency advice;
Baker McKenzie - Spanish legal;
Leon y Olarte - Spanish legal;
Field Fisher Waterhouse LLP- UK legal; and
Chrysostomides & Co - Cyprus legal.
Operationally, the project involves restarting the existing open-pit mine, copper concentrator and associated infrastructure. It is anticipated that the reactivation of the mine and plant will take six months following financial commitment, with commencement of copper-concentrate production now forecast for the fourth quarter of 2009 subject to receipt of all restart approvals by the second quarter of 2009.
The Board believes that Rio Tinto Mine will be the largest employer in the area. Most local townships have been financially distressed since the mine's closure eight years ago and local support is therefore understandably strong. The mine operated successfully in the past at the same levels of throughput proposed by the Company in its restart plan.
Risk management-planning has been in train since early 2007. A consequence of EMED Mining's careful approach to risk management is that the process has taken longer than the Company's initial timetable. A contributing factor to the delay was a judicial decision in Spain earlier this year which led to previous controllers of the vendor company being replaced by the MRI Group.
AMC has verified the input parameters and economic evaluation process (confirmed by EMED Tartessus) and considers Rio Tinto Mine to be a robust project that meets EMED Mining's investment criteria at current long-term metal price forecasts..
Proyecto de Rio Tinto Financial Overview
The EMED Mining and EMED Tartessus approach to this project has been exemplified by a series of steps to clean-up and secure control of the ownership structure and to normalize stakeholder relationships.
The Company considers that the investment opportunity is attractive because of:
Relatively low technical risk with established mine and infrastructure intact.
Relatively low financial risk as copper-concentrate production is planned to restart relatively quickly after permits are received and forecast cash flows provide a rapid payback of investment, and
Realistic expectation of expanding the operation to increase copper-concentrate production.
Permitting risk will be removed prior to drawdown of debt-funding. The Company remains highly confident that the project will proceed. Coupled with the Company's impressive equity investor base, discussions with other potential sources of finance remain encouraging in challenging conditions. Finance plans are focused on the following approach:
minimising expenditure pending the receipt of the various approvals required;
all pre-permitting financing to be by way of equity, advances repayable with equity or pre-sales of metal, to minimise finance risk;
triggering the restart upon receipt of shareholder approval, securing of finance and receipt of regulatory approval; and
post-permitting financing structured so as to minimise equity dilution for EMED Mining shareholders to the extent market conditions permit.
The Company believes that it is poised to build significant value for shareholders but is doing so in the midst of global financial turmoil. In this challenging environment it is important to note that EMED Mining is majority-owned by long-term investors who are especially experienced in the mining industry.
Company Reg No: 152217