Atalaya Mining Regulatory News (ATYM)

25 Nov 2008 07:00



AIM: EMED 25 November 2008

EXTENSION OF MINE PLAN FROM 10 TO 14 YEARS AT PROYECTO DE RIO TINTO 

EMED Mining Public Limited ("EMED Mining" or "the Company") announces that the Directors have, after consulting its project advisers AMC Consultants (UK) Limited ("AMC"), refined the restart plans for Proyecto Rio Tinto ("PRT"). The proposed initial mine life has been extended from 10 to 14 years and the forecast production rate expanded to 37,000 tonnes per annum of copper-in-concentrate from processing 9.0 million tonnes of ore per annum. Further expansion is expected and will be evaluated following planned drilling programs after production has restarted. 

In assessing the project's economic characteristics, particular attention is made to the following currencies: Euro for unit costs and revenues and GBP for reported earnings.

Key results from financial modelling of the refined PRT plan are summarised as follows:

17% internal rate of return ("IRR") based on current exchange rates and the copper price in the forward market - this averaged $1.83/lb (€1.46/lb or €3,219/tonne) of copper at 21 November 2008.

€1.22/lb (€2,684/tonne) breakeven copper price (i.e. - IRR zero) required for the project to recover all project acquisition, capital and operating costs (~ US$1.52/lb at €1.00:US$1.25).

£37M projected earnings before interest, tax, depreciation and amortisation ("EBITDA") in the Company's wholly-owned subsidiary EMED Tartessus S.L. which owns 100% of PRT (based on assumed price of US$2.50/lb or €1.87/lb or €4,114/tonne of copper). 

PRT analyses are reviewed by AMC, the product sales agent is MRI Trading, the restart financing lead-arranger is Goldman Sachs International and legal advisor in Spain is Baker McKenzie.

Harry Anagnostaras-Adams, Managing Director of EMED Mining, commented:

"Proyecto de Rio Tinto remains robust despite the decline in US$ spot market copper prices. Offsetting factors are the appreciation of the US$ against the Euro and GBP, the escalation in the forward market US$ prices for copper and the careful project planning leading to the extension to the mine life. The infrastructure is maintained in readiness for the restart.

"The foundation for the regulatory permits has been laid. We have acquired 100% of the mineral rights and processing facilities. We have settled with most counterparties, submitted restart applications as requested and have official support from the local municipalities, the labour unions and the employer groups. Arrangements with the relevant government departments and the relevant landholders are currently under negotiation".

The principal assumptions for PRT are as follows, all are within the range historically achieved:

Ore processed after initial ramp-up period = 9.0Mtpa at average ore grade = 0.5% copper;

Waste stripping ratio = 1.1 tonnes of waste to 1.0 tonne of ore;

Average metallurgical recovery = 84%; Concentrate shipped = 167,000 tpa; and

Copper-in-concentrate sold = 37,000 tpa; Silver-in-concentrate sold = 500,000 ounces pa.

 Enquiries

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

The mines in Cyprus and at Rio Tinto in Spain are 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. It recently announced a joint venture at the Artvin Project with Centerra Gold Inc of Canada. See www.kefi-minerals.com. 

For further information on the Company's activities, visit www.emed-mining.com or www.emed.tv.