Atalaya Mining Regulatory News (ATYM)

2 Aug 2007 07:36

EMED Mining Public Limited02 August 2007 AIM: EMED 2 August 2007 EMED MINING PUBLIC LIMITED ("EMED Mining" or "the Company") SUBSTANTIAL PROGRESS ON EMED MINING'S POTENTIAL ACQUISITION OF RIO TINTO PROJECT IN SPAIN EMED Mining Public Limited ("EMED Mining" or "the Company") reports substantialprogress with due diligence and negotiations aimed at the staged acquisition of100% ownership of the Proyecto de Rio Tinto ("PRT") copper project in Spain andrestart of copper production in Q2 2008. Highlights: • The Company's Spanish subsidiary, EMED Tartessus SL, has submitted its proposals for the restart of production to the Junta de Andalucia ("Government"). Accordingly, the Company has begun to address the conditions precedent with a view to committing in Q4 2007 to the restart. A shareholder meeting will be called at the appropriate time to seek approval to proceed if all conditions precedent have been met to the satisfaction of the Government and the Company. • Results of independently reviewed (by AMC Consultants) due diligence to date include: • JORC-compliant Mineral Resources increased to 255 million tonnes at 0.57% copper (containing 1.44 million tonnes copper) and Ore Reserves increased to 69 million tonnes at 0.65% copper (containing 0.45 million tonnes copper). Exploration planning in progress to convert more resource to reserve. • 10-year Base Case for production expanded by approximately 50% to 40,000 tonnes per annum of copper-in-concentrate, based on processing 7.5 million tonnes of ore per annum. This represents 83% of historical maximum capacity through the existing treatment plant at PRT. Planning in progress to further expand the project. • Annual average EBITDA of approximately £50 million for 100% of PRT based on a copper selling price of US$2.50/lb (current spot price is over US$3.60/lb). Total costs US$1.31/lb (capital expenditure and operating costs). Operating costs include site operating costs of US$0.93/lb which also cover exploration, royalties and rehabilitation. • In compliance with the Memorandum of Understanding described in the Company's announcement of 11 May 2007, definitive agreements have now been executed which reflect: • The exclusivity of the Company's option over 100% of PRT via subsidiary EMED Tartessus SL; and • The Company's right to withdraw if it is not satisfied that conditions precedent are met. Harry Anagnostaras-Adams, Managing Director of EMED Mining said: "We are makingsignificant progress in our due diligence and have formulated production restartplans which we believe will fulfil all local and regional requirements. We haveformed an excellent leadership team at EMED Tartessus which will be augmented bypersonnel to be recruited upon our receipt of all regulatory clearances,shareholder approvals and the requisite financial commitments from our bankersand shareholders". Enquiries EMED Mining RFC Corporate Fox-Davies Parkgreen Finance Capital CommunicationsHarry Anagnostaras-Adams Stuart Laing Daniel Fox-Davies Justine Howarth+357 9945 7843 +61 8 9480 2500 +44 207 936 5220 +44 20 7851 7480www.emed-mining.com www.emed.tv Background to Proyecto de Rio Tinto and the Company's Opportunity to Acquire100% Ownership On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire,in stages, 100% of Proyecto de Rio Tinto ("PRT"). Strong progress has been madeon due diligence and negotiations with stakeholders. However, this proposalremains subject to all the conditions precedent set out previously: • Regulatory approvals by the Government (Junta de Andalucia), support of the local community and approvals by the relevant statutory authorities in respect of performance bonds; • Settlement satisfactory to EMED Mining of the PRT-vendor's liabilities, liens and contractual arrangements with a number of third parties including landholders. These various obligations arose over the past decade as a result of the ongoing care and maintenance funding and from bankruptcy of various entities and litigation amongst some parties; • Completion of technical due diligence for: • planning the restart of the mine, processing plant and product marketing operations, and • planning for a fast-track approach to site rehabilitation where reasonable to be undertaken concurrently with ongoing long-term production; and • Complete all due diligence to EMED Mining's satisfaction including environmental considerations and infrastructure needs. The Company's due diligence (independently reviewed by AMC Consultants)indicates that the potential restart of operations, based on the Company'scurrent redevelopment plan for the project, would achieve the following: • Commencement of production in 2008 which would continue for a minimum of 10 years; • Production of approximately 40,000 tonnes of copper-in-concentrate based on processing 7.5 million tonnes of ore per annum from 2010. This represents 83% of historical maximum capacity through the existing treatment plant at PRT. Planning in progress to further expand the project; • Annual average revenues of approximately £108 million at a copper price of US$2.50/lb or (current spot market price is over US$3.60/lb); • An average waste-to-ore ratio for the life of mine of approximately 1.3 to 1.0; • Site operating costs of approximately US$0.93/lb including exploration, rehabilitation and royalty costs but excluding smelting, refining and transport (of approximately US$0.33/lb); • Total costs US$1.31/lb including capital, operating, exploration, royalties, and rehabilitation costs; • Annual average EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of approximately £50 million per annum for 100% of PRT based on a copper selling price of US$2.50/lb (current spot price is US$3.57/lb); • Employment of approximately 400 to 450 employees and contractors at full production; • Potential to extend the mine life through conversion of more resources to reserves. EMED Mining will continue refining operating plans and verifying cost and otheranalyses in consultation with its independent consultants. This may result inchanges to the above figures. Anticipated investment to achieve production restart, settle the PRT vendor'screditors, expand to 7.5 million tpa and to acquire 100% of project equityremains consistent with the disclosures made in the Company's announcement of 11May 2007 ie an aggregate of approximately £79 million. Subject to receipt ofregulatory approvals, these expenditures would be planned over the four yearscommencing from when the Company triggers the restart, targeted for Q4 2007. The Company has commenced discussing alternative financing strategies withpotential financiers. The potential sources of funds remain debt-finance,mezzanine finance, arrangements with customers, equity issues and operating cashflows. The financing plan would be outlined in due course when conditionallyagreed with potential financiers and set out in detail when shareholder approvalis sought. Mineral Resource and Ore Reserve Statement The PRT Mineral Resource and Ore Reserve is reported below in Tables 1 and 2 inaccordance with the most widely accepted international reporting standard, theAustralasian Code for Reporting of Exploration Results, Mineral Resources andOre Reserves, prepared by the Joint Ore Reserves Committee of the AustralasianInstitute of Mining and Metallurgy, Australian Institute of Geoscientists andMinerals Council of Australia, December 2004 (The JORC Code). The earlier published Mineral Resource and Ore Reserve Statement (referannouncement of 11 May 2007) subdivided the estimates into the Cerro Coloradodeposit and the Salomon deposit. Subsequent evaluation has determined that thesetwo deposits are in fact part of the same mineralised system. The separateestimates have been renamed Cerro Colorado West (replacing Cerro Colorado) andCerro Colorado East (replacing Salomon) as this naming convention betterreflects the continuity of the mineralisation. An upgrade to the Mineral Resources and Ore Reserves has resulted from workcarried out by EMED Mining and its independent consultants AMC Consultants. Inthe past Mineral Resources and Ore Reserves have been reported at cut-off gradesof 0.25% copper for Cerro Colorado West and 0.35% copper for Cerro ColoradoEast. Based on a more detailed analysis of costs and operating parameters thecut-off grade for Cerro Colorado East has been reduced to 0.25% copper. Furtherreviews will follow in due course. Mineral Resources have increased from 209.1 million tonnes at 0.57% copper (1.19million tonnes of contained copper) to 254.9 million tonnes at 0.57% copper(1.44 million tonnes of contained copper). This increase is due to the reductionof cut off grade of Cerro Colorado East from 0.35% copper to 0.25% copper. The Ore Reserves of 52.8 million tonnes at 0.65% copper (342,000 tonnes ofcontained copper) stated on 11 May 2007 were based on a Mineral Resourceestimate to which a tonnage reduction factor of 20% had been applied. Subsequentwork reconciling the Mineral Resource to mill production showed that theapplication of the tonnage reduction factor was not warranted. The elimination of the tonnage reduction factor and the reduction in the cut-offgrade of Cerro Colorado East have resulted in an increase in the Ore Reserve to69.1 million tonnes at 0.65% copper (450,000 of contained copper). The Mineral Resource is based on data and information supplied by the previousowner of PRT, and is reported at a cut-off grade of 0.25% copper and is shown inTable 1 below: Table 1 - Mineral Resource Statement for PRT Cerro Colorado West Mt Cu % Cu ktMeasured 35.9 0.57 205Indicated 105.4 0.50 527Inferred 35.4 0.68 243Total (Cerro Colorado West) 176.7 0.55 975 Cerro Colorado East Mt Cu % Cu ktMeasured 33.1 0.70 232Indicated 34.1 0.50 171Inferred 11.1 0.58 64Total (Cerro Colorado East) 78.3 0.60 467 Total Mineral Resource 254.9 0.57 1,441 The PRT Ore Reserve estimate is based on the 'Measured' and 'Indicated' portionsof the Mineral Resource, constrained within the 10-year pit designed by theprevious owner of PRT. All Proved Ore Reserve has been derived from the MeasuredMineral Resource and all Probable Ore Reserve has been derived from theIndicated Mineral Resource. The Ore Reserve is reported at a cut-off grade of0.25% copper for both Cerro Colorado West and Cerro Colorado East and is shownin Table 2 below: Table 2 - Ore Reserve Statement for PRT Cerro Colorado West Mt Cu % Cu ktProved 21.1 0.55 117Probable 16.4 0.65 106Total (Cerro Colorado West) 37.5 0.60 223 Cerro Colorado East Mt Cu % Cu ktProved 25.2 0.76 191Probable 6.3 0.58 36Total (Cerro Colorado East) 31.5 0.72 227 Total Ore Reserve 69.0 0.65 450 Ore Reserves represent 33% of the Measured and Indicated Resources at PRT. A report by AMC Consultants providing further information on the MineralResources and Ore Reserves will be uploaded onto www.emed-mining.com duringAugust 2007. Competent Persons for Reporting of Resources and Reserves References in this announcement to exploration results and potential have beenapproved for release by Mr Ron Cunneen, B.Sc. (Honours). Mr Cunneen is Head ofExploration for EMED Mining and has more than 20 years' relevant experience inthe field of activity concerned. He is a member of The Australian Institute ofGeoscientists ("AIG"). The specific information in this announcement that relates to JORC-Compliantmineral resource and ore reserves is based on information compiled by Ms SoniaKonopa (Senior Geologist), MSc (Economic & Mining Geology), BAppSc (HonoursGeology) with 20 years relevant experience in the mining industry, and Mr AndyRobb (Principal Mining Consultant), BSc (Mining Engineering), with 30 yearsrelevant experience in the mining industry, who are both employees of AMCConsultants (UK) Limited. Ms Konopa is a Member of the Australasian Institute of Mining and Metallurgy andhas sufficient experience relevant to the style of mineralisation and type ofdeposit under consideration to qualify as Competent Person as defined in the2004 Edition of the JORC Code. Ms Konopa is responsible for the reporting of themineral resource estimate. Mr Robb is a Member of the Australasian Institute of Mining and Metallurgy andhas sufficient experience relevant to the style of mineralisation and type ofdeposit under consideration to qualify as Competent Person as defined in the2004 Edition of the JORC Code. Mr Robb is responsible for the reporting of theore reserve estimate. Ms Konopa and Messrs Cunneen and Robb consent to the inclusion in theannouncement of the material in the form and context in which it appears in thisannouncement. Notes to Editors: About EMED Mining Public Limited EMED Mining was admitted to trading on AIM in May 2005 following a placing ofits shares. The Company is based in Cyprus and has a strong commitment toresponsible development of metal production operations in Europe, with aninitial focus on copper and gold. The Company has moved rapidly reflecting the experience of its specialist teamand the clarity of its strategy. The Group's region of interest are the tectonic belts spanning across Europe andover to Iran. The strategy is to evaluate exploration and developmentopportunities in several jurisdictions throughout this quality mineral belt andto promote sustainable development practices through implementation of EuropeanUnion and other leading-edge international standards. EMED Mining recentlyco-hosted with the Green Party of Cyprus an international conference onResponsible Mining and Environmental Management. The Company has, from theoutset, strictly implemented its Environmental & Community Policy whichincludes: • 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 selectedzones: • Spain/Cyprus The mines at Rio Tinto, Andalucia, Spain are probably mongst the best known in the world. They are, with the possible exception of those in Cyprus, the oldest capable of still being worked. It is now EMED Mining's goal to restart production in both of these well-endowed 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 of production techniques are similar. • Slovakia exploration areas are centred on a cluster of volcanic centres in Slovakia and Romania. Low-detection geochemical methods are being applied to these areas for the first time together with open pit bulk mining concepts. The targeted mineralisation styles are high-grade epithermal gold, or bulk-mineable epithermal gold and porphyry copper-gold. The Company has discovered a porphyry gold system at Biely Vrch in Central Slovakia which the focus of a major drilling program over 2007. • Georgia exploration areas form a cluster of gold prospects with EMED Mining's main prospects being within the Upper Racha Licence, the country's largest minerals licence with many untested prospects. The Company has confirmed Russian Resources of 1.0 million ounces gold at the Zopkhito Prospect and discovered high grade mineralisation at surface at other prospects. • Turkey exploration areas were vended into 34%-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. The KEFI Minerals team has mobilized into the field to explore the company's tenements and to expand the portfolio of licenses as opportunities warrant. See www.kefi-minerals.com. For further information on the Company's activities, visit www.emed-mining.comor www.emed.tv . -Ends- This information is provided by RNS The company news service from the London Stock Exchange