Atalaya Mining Regulatory News (ATYM)

6 Aug 2007 07:01

EMED Mining Public Limited06 August 2007 EMED MINING QUARTERLY REPORT SUMMARY OF ACTIVITIES FOR THE THREE MONTHS TO JULY 2007 6 AUGUST 2007 EMED Mining Limited ("EMED Mining") (AIM:EMED) publishes its first quarterlyreport, summarising activity from May to July 2007: Key Points Slovakia - Porphyry gold system discovered • Porphyry gold system discovered at Biely Vrch in Central Slovakia. • Porphyry gold deposits typically occur in clusters and are usually large ( > 100 million tonnes), low-grade (0.7g/t to 1.8g/t gold), bulk-mineable deposits. • Initial drilling has already defined 15 to 23 million tonnes at an average grade of 1.0g/t gold, containing approximately 0.5 to 0.7 million ounces. Further work is required to define and then expand a JORC-compliant Mineral Resource. Spain - Option acquired over copper project currently on care & maintenance • Acquired an option over 100% of the RTZ-built copper mine and processing plant, Proyecto de Rio Tinto ("PRT") in Spain (announced 11 May 2007). • Acquisition completion subject to satisfactory completion of due diligence, regulatory consent to the restart of operations and securing of finance. Progressing towards triggering in Q4 2007 of production re-start in 2008 with initial 51% equity and subsequently 100%. • JORC-compliant Mineral Resources total 255 million tonnes at 0.57% copper and Ore Reserves total 69 million tonnes at 0.65% copper (containing 0.45 million tonnes copper). • 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 over US$3.60/lb); Cyprus - Progressing feasibility study on copper-zinc project • Exploration drilling continues with the aim of increasing Inferred Resources totalling 6.6 million tonnes at 0.7% copper-equivalent. • Independent review of Company's Preliminary Feasibility Study scheduled for Q4 2007. Georgia - Exploring large licence area for gold • Russian Resources of 1.0 million ounces gold confirmed at the Zopkhito Prospect. • First-sampling of prioritized prospects continues. About EMED Mining Public Limited EMED Mining Public Limited was admitted to AIM, the London Stock Exchange marketfor high-growth international companies in May 2005. The Company's marketcapitalisation has since increased from approximately £4 million toapproximately £21 million and its share price from 8 pence per share to thecurrent share price of £0.1675 per share. Significant shareholders includeOxiana Limited (12%) and Gold Fields Limited (10%). EMED Mining is based in Cyprus and has a strong commitment to responsibledevelopment of metal production operations in Europe, with an initial focus oncopper and gold. EMED Mining also owns 34% KEFI Minerals Plc (TIDM: KEFI) which was admitted toAIM in December 2006 and is focused on exploring Turkey for gold and copperdeposits. Further information is available at www.kefi-minerals.com. MANAGING DIRECTOR'S OVERVIEW This is EMED Mining's inaugural quarterly report. AIM does not require thatcompanies provide a quarterly summary of activities. However, EMED Mining isplanning on providing quarterly reports to assist shareholders in keepingabreast of the Company's rapid progress. The Company's rapid progress reflects the experience of its team and the clarityof its strategy. The Group's region of interest is the tectonic belts spanningacross Europe to the Middle East. The strategy is to evaluate exploration and development opportunities in severaljurisdictions throughout this quality mineral belt and to promote sustainabledevelopment practices through implementation of European Union and otherleading-edge international standards. EMED Mining recently co-hosted with theGreen Party of Cyprus an international conference on Responsible Mining andEnvironmental Management. A similar initiative is planned for Slovakia later in2007. Two potentially company transforming events have occurred in the past fewmonths: • The recognition of a porphyry gold system discovered within our large Detva Licence Area in Central Slovakia; and • The PRT agreements potentially providing an opportunity to quickly re-start a significant copper mine and generate significant cash flows as from mid-2008. These events provide strong catalysts for EMED Mining's continued progress. SLOVAKIA Exploration areas in Slovakia are centred on a cluster of volcanic centres.Low-detection geochemical methods are being applied to these areas for the firsttime together with open-pit, bulk-mining concepts. The targeted mineralisationstyles are high-grade epithermal gold, or bulk-mineable epithermal and porphyry. In late 2006, EMED Mining announced a gold discovery at Biely Vrch prospect incentral Slovakia. The first four drillholes at Biely Vrch targeted a 500m by300m soil geochemical anomaly and all four drillholes intercepted goldmineralisation over their entire length. Drilling at Biely Vrch recommenced in mid-March 2007 with a programme designedto define the extent and grade of the near-surface mineralisation: • Drillhole DVE5 extended gold mineralisation associated to a vertical depth of 460m, with an intercept of 331m averaging 1.1g/t gold from 228m to the bottom of the hole. • Drillhole DVE8 extended known mineralisation (to 250m east-west in total) with an intercept of 154m at 1.3g/t gold from surface. • Drillhole DVE9 extended known mineralisation (to 350m north-south in total) with an intercept of 41m at 0.7g/t gold from 62m down hole. Gold mineralisation is contained in a broadly pipe-shaped quartz-veinletstockwork zone associated with an andesitic porphyry intrusion. Based on the limited drilling to date and the porphyry gold deposit model, thedimensions of a vertical pipe-shaped structure of currently known goldmineralisation within the stockwork zone at Biely Vrch are approximately 250meast-west, 100m north-south and 460m vertical. The Company estimates that this zone of mineralisation roughly contains 15 to 23million tonnes at an average grade of 1.0g/t gold, containing approximately 0.5to 0.7 million ounces. This estimate is conceptual in nature and it remainsuncertain if further exploration will result in the determination of a MineralResource as defined in the JORC Code. The extent of known mineralisation provides substantial encouragement for theultimate delineation of a significant Mineral Resource at Biely Vrch in adeposit style that would be amenable to bulk tonnage mining methods. Over the remainder of 2007, EMED Mining plans to undertake the work required tobetter define the area of mineralisation at the Biely Vrch Prospect. This workwould include further drilling to confirm the continuity of the mineralisationthroughout the targeted zone. Good potential remains to define extensions to the mineralisation to the southand north; and most drill holes terminated in mineralization. Biely Vrch Deposit Model During May 2007, Dr. Richard Sillitoe, a leading global expert on the geologyand mineralisation of porphyry systems, visited Biely Vrch and other Companyprospects in Slovakia. Dr. Sillitoe advised that: "The Biely Vrch prospect conforms precisely to the porphyry gold model,exemplified by several deposits, including Lobo, Marte and Refugio, in theMaricunga gold belt, high Andes of northern Chile. As such, the prospect is thegold-only end member of the porphyry copper-molybdenum-gold spectrum. Viewedworldwide, porphyry gold deposits are not common and have not been recognisedpreviously in the Carpathians, although at least two prospects are known inTurkey. There, the Kisladag deposit, currently under development, is also ofporphyry type, but assignable to the somewhat different alkaline rock-hostedgold-molybdenum category." Porphyry gold deposits differ to the more common porphyry copper-gold deposits,and typically: • are low-grade (0.7g/t to 1.8g/t gold), multi-million ounce deposits; • are large ( > 100 million tonnes), bulk-mineable deposits; • are metallurgically simple and gold is recoverable via conventional heap leaching; • occur in clusters of several similar deposits; and • contain very minor amounts of copper and molybdenum. Regional Exploration Near Biely Vrch The recognition of Biely Vrch as a porphyry gold deposit has provided valuableinsights which assist EMED Mining's plans for exploration of its Slovakianlicences. Several prospects have already been recognised as having potential tohost porphyry gold mineralisation. At the Kralova Prospect, the Company is planning initial drilling of an untestedgeochemical anomaly analogous to the soil geochemical anomaly which led topositioning the Biely Vrch discovery drillhole. The size of the soil anomaly atKralova is 400m by 500m within the > 100 ppb gold contour. At the Banisko Prospect, quartz veinlets in altered andesitic rocks indicate thepotential proximity of a porphyry gold centre. Drill targets will be defined viageological mapping and geochemical surveys of these prospects. A regional stream geochemical survey and follow-up geological mapping isexpected to define further areas within the Company licences that areprospective for gold porphyry deposits. SPAIN On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire,in stages, 100% of the RTZ-built Proyecto de Rio Tinto ("PRT") in Spain. The main assets of PRT are an established open-pit mine and processing plantadjacent to the town of Rio Tinto 65 kilometres northwest of Seville inAndalucia, Spain. The mine was placed on care and maintenance in 2000 due toprevailing low copper prices below $US1.00/lb at that time. PRT has JORC-compliant Mineral Resources of 255 million tonnes at 0.57% copper(containing 1.44 million tonnes copper) and Ore Reserves have increased to 69million tonnes at 0.65% copper (containing 0.45 million tonnes copper), whichhave been independently verified by AMC Consultants. There is significant scopeto convert to Ore Reserves more of the 255 million tonnes of Measured andIndicated Resources. Strong progress has been made on due diligence and negotiations withstakeholders. However, this proposal remains subject to all the conditionsprecedent 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; 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 over US$3.60/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. CYPRUS EMED Mining's exploration areas in Cyprus are centred on the Troodos ophiolitecomplex. The targeted mineralisation style is volcanic-hosted massive sulphide("VHMS") copper deposits, similar to the larger past Cyprus copper mines - threeof which exceeded 10 million tonnes of ore running at grades between 1% and 4%copper. The highlights of the Cyprus exploration programme for 2006 were theidentification of initial resources for the Klirou Copper-Zinc Project andfurther encouraging results at several other nearby locations including theNorth Alestos Prospect. Rising metal prices have materially improved the economics of certain knownmineralisation systems in Cyprus. This prompted EMED Mining to re-evaluate theCyprus prospects in the context of exploration insights developed internally.This re-evaluation has identified the set of prospects within the KlirouCopper-Zinc Project as a high priority because of an initial resource at shallowdepth, extensive untested potential and the availability of a disused plantcapable of cost-effective refurbishment. JORC-compliant Mineral Resources for the Klirou Copper-Zinc Project total 6.6million tonnes at 0.7% copper-equivalent, for contained metal of 18,500 tonnescopper and 53,600 tonnes zinc. The Klirou resource extends from the surface to approximately 200 metres belowsurface and is potentially mineable by open-pit methods. Potential remains toincrease these resources by infill drilling and step-out drilling. EMED Mining has reached agreement in principle to utilise the nearby Mitseroprocessing plant owned by its 5% partner Hellenic Mining Company to treat oreand produce saleable concentrates. An independent review of the Klirou Copper-Zinc Project preliminary feasibilitystudy is being undertaken and will be completed in Q4 2007. Recent drilling has focussed on infill drilling of the Klirou resource.Exploration has yet to focus on some deeper drilling targets identified bygeophysical techniques. This will soon be possible because of the Company'srecent purchase of its own diamond drill rig. GEORGIA EMED Mining's main prospects in Georgia are within the Upper Racha Licence innorthern Georgia, the country's largest minerals licence with many untestedprospects. The Company has confirmed Russian Resources of 1.0 million ounces gold at theZopkhito Prospect and discovered gold mineralisation at surface at otherprospects which are being systematically sampled for the first time. Field programmes during 2007 have primarily comprised geological mapping andsample collection over the large Upper Racha Licence area. Follow-up sampling ofgold mineralisation discovered at the Ipari Prospect in 2006 has not providedfurther encouragement. Exploration of the Upper Racha Licence is primarily focussed on discoveringgold, however several copper prospects are also being assessed during 2007. Competent Person 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") and has consented to the inclusion of the material in theform and context in which it appears. CORPORATE DIRECTORY EnquiriesEMED Mining RFC Corporate Finance Fox-Davies Capital Parkgreen CommunicationsHarry Anagnostaras-Adams Stuart Laing Daniel Fox-Davies Justine Howarth+357 9945 7843 +61 8 9480 2500 +44 20 7936 5220 +44 20 7851 7480www.emed-mining.com Directors Ronald (Ronnie) Hugh Beevor (Non-Executive Chairman) Aristidis (Harry) Anagnostaras-Adams (Managing Director) John Edward Leach (Finance Director) Dr Michael Price (Non-Executive Director) Gordon Leonard Toll (Non-Executive Director) Nominated Adviser RFC Corporate Finance Brokers Fox-Davies Capital Limited Lewis Charles Securities Ltd Public Relations Parkgreen Communications Share Registrar Computershare Investor Services Plc Issued Capital 126.3 million shares on issue 27.7 million options on issue, with exercise prices ranging from 8.0p to 20p per share. Significant Shareholders • Management and Board (15%), (fully-diluted 27%) • Oxiana Limited (12%) • Gold Fields Limited (10%) • RAB Special Situations Fund (8%) • Paul Curtis (5%) • RMB Australia Holdings Limited (4%) EMED Mining is listed on AIM (TIDM: EMED) To view this announcement in PDF format including images click on the link below: http://www.rns-pdf.londonstockexchange.com/rns/5568b_1-2007-8-6.pdf This information is provided by RNS The company news service from the London Stock Exchange