Atalaya Mining Regulatory News (ATYM)

12 Oct 2009 07:00



EMED 12 October 2009

POSITIVE SCOPING STUDY OUTCOME FOR THE DEVELOPMENT OF

THE BIELY VRCH GOLD MINE (or "BV GOLD MINE")

EMED Mining Public Limited ("EMED Mining" or "the Company"), the European-based minerals exploration and development company formed by international specialists, is pleased to announce positive results for the Scoping Study assessing the development of the wholly-owned BV Gold Mine in Central Slovakia.

The Scoping Study, undertaken by AMC Consultants (UK) Ltd ("AMC"), has indicated that the development of a ten-year 3 million tonnes per annum mining and metal production operation producing approximately 60,000 ounces of gold per year has attractive economics based on the project's technical parameters, current cost estimates and gold prices. 

In particular, further metallurgical testwork undertaken as part of the Scoping Study has confirmed that the ore is not refractory and indicates metal recovery of approximately 81% of the gold. Recovered grade is estimated at 0.6-0.7g/t gold.

Based on the parameters detailed further below and a gold price of US$1,000/ounce, the BV Gold Mine Scoping Study by AMC indicates a base case with:

Net present value to shareholders ("NPV") of US$80 million at a 10% discount rate, internal rate of return ("IRR") of approximately 39%;

Initial expenditure of US$45 million with a payback period of 2 years; 

Expenditure in the surrounding region of over US$400 million during the project life with average cash operating cost of US$590/ounce and cumulative cash surplus (undiscounted) of approximately US$194 million, and

Employment of approximately 200, mainly local, personnel.

The Company has also committed to implement, in partnership with local municipal authorities, the EMED Mining social licence programs including the provision of seed capital to local new enterprises and facilitation of industrial diversification where feasible. One of the major enterprises in the district today is notably a long-standing producing mine, the Rosalia Gold Mine with which EMED Mining also has an exploration alliance.

The version of this announcement which has been uploaded onto the Company website includes some images depicting the Biely Vrch deposit.

The Company is assembling a comprehensive update for shareholders on its exploration programs in Slovakia which to date have cost, in aggregate, less than $5/oz Resource (compliant with the JORC standard). This will also be released this month.

EMED Mining is also pleased to announce that at the National Mining Museum of Slovakia in Banska Stiavnica, Mr Harry Anagnostaras-Adams, Managing Director of EMED Mining and Mr Demetrios Constantinides, Managing Director in Slovakia, were made Honorary Members of the Association of Miners. 

Mr Anagnostaras-Adams commented: "We are honoured to be accepting this recognition on behalf of the team and we undertake to continue working hard to protect the trust which the local community and industry have placed in us.

"Our first Project Scoping Study provides strong evidence of the potential value that developing the deposit at Biely Vrch would create for all stakeholders.

"Exploration continues to provide encouragement that further porphyry gold deposits similar to Biely Vrch will be discovered by EMED Mining. And we also plan to test other styles of mineralisation in this once-world-class precious metals province.

"The Biely Vrch Gold Mine project has a short payback period of only two years based on a forecast gold price at today's price of approximately US$1,000/ounce.

"The next steps are to select and procure the land sites for mine infrastructure, finalise any restrictions in relation to the industrial complex nearby, resolve the rate of government royalty and agree with the authorities the timetable and conditions of permitting. Upon satisfactory progress on these fronts we will commence the reserve drill-out and detailed engineering required for a Definitive Feasibility Study. If all that goes well, the Board will trigger development in 2012."

Enquiries

Further Details on BV Scoping Study work and conclusions 

Background and Mineral Resource

The BV Scoping Study addresses the Biely Vrch Project which forms part of the 100%-owned Detva licence area in Central Slovakia, granted to EMED Mining in late 2005. 

EMED Mining drilled a total of 44 drill holes at Biely Vrch over several campaigns from late 2006 through to late 2008. 

Based on this drilling, the initial JORC-standard Mineral Resource (Indicated & Inferred) for the Biely Vrch porphyry gold deposit totals 41.7 million tonnes at 0.79g/t gold, containing 1.1 million ounces of gold. The Mineral Resource measures approximately 350m north-south and 300m east-west and extends from surface to a depth of 250m. Mineralisation within a vertical pipe-shaped structure continues well below this depth.

Full details of the Biely Vrch Mineral Resource are contained in the announcement released by EMED Mining on 23 February 2009.

Metallurgical Testwork

During 2009, composite samples were collected from the drill core. These samples were selected to represent the four ore types (oxide, argillic, transition and primary), which might be expected to have different metallurgical responses in a leaching operation. 

The distribution of ore types within the modelled open-pit is estimated to be oxide 11%, argillic 66%, transition 12% and primary 11%.

AMMTEC Ltd in Perth carried out intermittent bottle-roll testwork that confirmed the ore is not refractory. The results suggest that the heap-leach recovery for oxide and argillic ore types would be in the upper 80% range and are generally not sensitive to the crush size. The transition and primary ore types leach far less readily (about 60% recovery) and have a clear recovery to crush size relationship.

More than 75% of the ore is either argillic or oxide and hence falls into the group that leaches well and it not sensitive to crush size. Based on the testwork results to date and preliminary financial analysis, it is suggested that a crush size of around 12mm would optimise returns. This relatively coarse crush size is expected to result in a reasonable >57% recovery from both the primary and transition material and significantly higher for the oxide and argillic material, without the significant additional capital and operating costs that a finer crush size would entail.

Overall, the testwork indicates that leaching will recover approximately 81% of the gold from the modelled open pit. The current focus is on "valley leaching" to minimise the impact on land and maximise recovery.

Project Parameters

Based on the current knowledge of the Biely Vrch deposit, AMC envisaged the following parameters for developing Biely Vrch:

3.0 million tonne per annum, valley-leaching operation;

Waste to ore stripping ratio of 0.9 to 1.0;

Processing a total of 27.5 million tonnes at an average grade of 0.86g/t gold;

Overall gold recoveries averaging 81%;

Average cash operating cost of US$590/ounce or US$13/tonne processed, split 42% for contract mining costs and the remainder for processing and administration costs;

Total development capital costs of US$45 million; and

Gold production averaging 60,000 ounces per annum.

Contractor mining costs for the deposit have been developed using AMC cost benchmarks relevant to the deposit type, size and spatial distribution. Mining costs are estimated to be approximately US$2.20/tonne of in-situ material near the surface, then increasing with depth due longer haul distances and harder rock being blasted.

Based on the estimated operating costs, the breakeven cut-off grades were calculated for each ore type over a range of gold prices. Pit optimisations were carried out and evaluated at breakeven cut-off grades based on estimated operating costs and a range of gold prices from US$700/ounce to $1,200/ounce. The optimisation open-pit shell based on a US$800/ounce gold price was selected as the base case for financial modelling of the mining parameters.

The Scoping Study envisaged a 600 tonnes per hour, three-stage crushing plant. An ore processing rate of 3.0 million tonnes per annum is scheduled to be achieved even with crushing operations suspended for two months during winter. The crushed and agglomerated ore is to be transported to the heap-leach pads via a series of overland conveyors and a radial stacker.

The BV Scoping Study included assessments of the various potential impacts of the project on the environment, as well as reviewing key mining legislation.

Several key areas of immediate focus identified from the Scoping Study are: 

Identification and procurement of the land areas, which are required for the project, particularly the leaching pads and the waste dumps;

Understanding the limitations imposed by a large industrial complex in proximity to the open pit;

Refining pit slopes based on geotechnical drilling; and

Determining the saleability of waste material as gravel for local road-building.

Once these issues are understood the timetable for permitting will be finalised and the next phase of geological, geotechnical and metallurgical work will commence.

Competent Person

Information in this announcement that relates to Mineral Resource estimates and exploration results is based on information compiled by Mr Ron Cunneen, BSc (Hons.)  Geology. Mr. Cunneen is Head of Exploration for EMED Mining and a full-time consultant to that company. He is a Member of The Australian Institute of Geoscientists. Mr. Cunneen has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activities he is undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Cunneen consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears

Notes to Editors: About EMED Mining Public Limited

EMED Mining was admitted to trading on AIM in May 2005. The Company is based in Cyprus and 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 the implementation of European Union and other leading-edge international standards. The Company strictly implements its Environmental & Community Policies which includes:

Integrating environmental management into its 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 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 centred 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 had a significant gold discovery at Biely Vrch and has announced the identification of many targets with apparently similar geological characteristics, in its wholly-owned exploration licenses in Central Slovakia. 

The mines in Cyprus and those at Rio Tinto in Spain located in the Iberian Pyrite Belt, are probably among the best known in the world for their base metal 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. It is the operator of joint ventures in Turkey with Centerra Gold Inc of Canada and in the Kingdom of Saudi Arabia with local construction and investment group ARTAR. See www.kefi-minerals.com. 

For further information on the Company's activities, visit 

www.emed-mining.com or www.emed.tv.