Atalaya Mining Regulatory News (ATYM)

26 Nov 2007 07:01

EMED Mining Public Limited26 November 2007 EMED MINING QUARTERLY REPORT SUMMARY OF ACTVITIES FOR THE THREE MONTHS TO OCTOBER 2007 26 NOVEMBER 2007 EMED Mining Limited ("EMED Mining") (AIM:EMED) publishes its quarterly report,summarising activity from August to October 2007: Key Points Slovakia - Porphyry gold system extended and second deposit discovered O Biely Vrch porphyry gold system extended in Central Slovakia and is nowestimated to contain approximately 1.2 million ounces of gold. Further work isrequired to define and then expand a JORC-compliant Mineral Resource. O Second porphyry gold deposit discovered at nearby Kralova prospect. O Seven additional exploration licences in the Central Slovakia were grantedduring the quarter. These licences total 1,107 square kilometres and coverseveral additional porphyry gold targets. O 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. Spain - Due diligence progressing well at PRT copper project O Required work is progressing well towards enabling EMED Mining to exerciseits option for the full acquisition of Proyecto de Rio Tinto ("PRT") copper mineand processing plant in Spain. O Shareholder approval is planned to be sought at the Company's Annual GeneralMeeting in April 2008 for the exercise of the PRT option and associatedfinancial arrangements, potentially enabling immediate 100% acquisition andproject restart in third quarter of 2008; O JORC-compliant Mineral Resources total 255 million tonnes at 0.57% copper andOre Reserves total 69 million tonnes at 0.65% copper (containing 0.45 milliontonnes copper). O Estimated annual average EBITDA (Earnings Before Interest, Tax, Depreciationand Amortisation) of approximately £40 million per annum for 100% of PRT basedon a copper selling price of US$2.08/lb (current spot price is US$3.40/lb); Cyprus - Progressing feasibility study on copper-zinc project O Exploration drilling continues with the aim of increasing Inferred Resourcestotalling 6.6 million tonnes at 0.7% copper-equivalent. O Independent review of Company's Preliminary Feasibility Study scheduled forQ4 2007. Georgia - Exploring large licence area for gold O Russian Resources of 1.0 million ounces gold confirmed at the ZopkhitoProspect. O First-sampling of prioritized prospects continues. About EMED Mining Public Limited EMED Mining Public Limited ("EMED Mining") was admitted to AIM, the London StockExchange market for high-growth international companies in May 2005 (AIM Code:EMED). The Company's market capitalisation has since increased fromapproximately £4 million to approximately £31 million and its share price from£0.08 per share to the current share price of £0.21 per share. Significantshareholders include Oxiana 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 (AIM Code: KEFI) which was admittedto AIM 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 second quarterly report. AIM does not require thatcompanies provide a quarterly summary of activities. However, EMED Mining isplanning on providing quarterly reports to assist shareholders to keep abreastof 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 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-hostedinternational conferences on Responsible Mining and Environmental Management inCyprus and Slovakia . EMED Mining continues to focus on progressing two potentially companytransforming projects during the next 12 months: O Drilling and extending the porphyry gold system discovered within our largeDetva Licence Area in Central Slovakia; and O The PRT agreements provide an opportunity to potentially re-start asignificant copper mine and generate significant cash flows. Both of these projects have been strong catalysts for the progressive re-ratingof EMED Mining's share price. EMED Mining Share Price (pence) SLOVAKIA During the quarter, EMED Mining continued to advance the Biely Vrch golddiscovery announced in late 2006. Located within the Company's 100%-owned DetvaLicence, Biely Vrch has been recognised as a porphyry gold deposit, whichtypically occur in clusters and are usually large (> 100 million tonnes),low-grade (0.7g/t to 1.8g/t gold), bulk-mineable deposits. EMED Mining recently announced that initial drilling results confirmed theKralova Prospect as the second gold porphyry deposit discovered by the Companyin Slovakia. The Company was granted a total of seven exploration licences in the CentralSlovakian Volcanic Field during the quarter. These licences total 1,107 km2 andcover several additional porphyry gold targets identified by prospecting andgeological mapping. Drilling at the Biely Vrch Prospect during the quarter extended the zone ofmineralisation to an estimated 50 million tonnes with a grade range of 0.2g/t to1.9g/t gold (typically 0.8g/t to 1.1g/t gold), containing approximately 1.2million ounces of gold based on these preliminary estimations. This estimate isconceptual in nature and is based on 15 drillholes completed at Biely Vrch. Itremains uncertain if further exploration will result in the determination of aMineral Resource as defined in the JORC Code. In-fill drilling will seek todefine an initial JORC-compliant Mineral Resource at Biely Vrch at the earliestopportunity. The zone of mineralisation remains open, north and south. Gold mineralisation at Biely Vrch is contained in a broadly pipe-shapedquartz-veinlet stockwork zone associated with an andesitic porphyry intrusion. Drilling at the Kralova Prospect has intercepted extensive low-grade goldmineralisation in the initial two drillholes. Drillholes KVE1 and KVE2 werecollared on the same drill pad and inclined at 60 degrees away from each other.KVE1 intersected 158m at 0.37g/t gold from surface and KVE2 averaged 0.42g/tgold over the entire 250m length of the hole. The long intercept in KVE2includes 56m at 0.80g/t gold from 77m downhole. KVE1 and KVE2 have tested only asmall portion of the targeted large 1,000m by 500m soil anomaly. Located 20 km southwest of Biely Vrch, Kralova's mineralisation is very similarto Biely Vrch and is hosted in a quartz-vein stockwork in a potassic-alteredandesite porphyry. Gold grade at Biely Vrch has been noted to generally increasewith quartz-vein content and notably drillhole KVE3 (assays awaited) has agreater quartz-vein content than the first two drillholes. Porphyry gold deposits differ to the more common porphyry copper-gold deposits,and typically: O are low-grade (0.7g/t to 1.8g/t gold), multi-million ounce deposits; O are large (> 100 million tonnes), bulk-mineable deposits; O are metallurgically simple and gold is recoverable via conventional heapleaching; O occur in clusters of several similar deposits; and O contain very minor amounts of copper and molybdenum. Further information on EMED Mining's porphyry-gold prospects in Slovakia isavailable in announcements dated 9 July 2007, 21 August 2007, 29 October 2007and 8 November 2007. SPAIN On 11 May 2007, EMED Mining announced an opportunity for the Company to acquire100% of the RTZ-built Proyecto de Rio Tinto ("PRT") in Spain. Since that time,EMED Mining has been making good progress on the work required prior to exerciseof this option, primarily due diligence, technical studies and discussions withregulatory and government authorities and other stakeholders. 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. Support for restarting PRT has been received from unions, environmentalists,local community and employer groups. EMED Mining's shareholders and financiersare also providing solid support. AMC, project management experts, lead the preparation of the detailed restartplan and the site team is being rapidly expanded from the current 40 personnelas the workload grows and accelerates. In order to facilitate testing of themothballed processing plant, an application has been lodged for a temporaryconnection to the local electricity grid. URS, environmental experts, indicate that the tailings dam classification forenvironmental bonding is consistent with the Company's restart plans andproposals. Discussions have commenced with the community leaders in respect of thefacilitation of long-term sustainable enterprises which benefit from the plannedmining operations but can continue beyond the ultimate cessation of mining. Itis the Company's intention to make PRT its international operational base and toprovide export services from PRT, such as drilling and laboratory services. The exercise of EMED Mining's PRT option and proposed restart of copperproduction remains subject to significant conditions precedent, including: O Regulatory approvals by the Government (Junta de Andalucia), support of thelocal community and approvals by the relevant statutory authorities; and O Settlement satisfactory to EMED Mining of the PRT-vendor's liabilities, liensand contractual arrangements with a number of third parties. It is now the intention of the Company, if it proceeds to exercise its option,to seek to acquire as soon as possible 100 per cent of PRT rather than aninitial 51 per cent. 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: O Production of approximately 40,000 tonnes of copper-in-concentrate based onprocessing 7.5 million tonnes of ore per annum from 2010. This represents 83% ofhistorical maximum capacity through the existing treatment plant at PRT.Planning in progress to further expand the project; O An average waste-to-ore ratio for the life of mine of approximately 1.3 to1.0; O Total costs of US$1.20/lb including capital and operating expenditure, whichis below the average for major new copper projects; O Annual average EBITDA (Earnings Before Interest, Tax, Depreciation andAmortisation) of approximately £40 million per annum for 100% of PRT based on anaverage copper selling price of US$2.08/lb over 10 years (current spot marketUS$3.40/lb). The Company currently intends to arrange price-protection viahedging during the first two years, although this will depend on the financingarrangements that it ultimately enters into. Price forecasts have been based ontracking the London Metal Exchange forward price curve down to US$2.70/lb at theend of year 5 and thereafter assuming US$1.50/lb flat; and O Employment of approximately 400 to 450 employees and contractors at fullproduction. Based on current engineering and financial analysis the estimated fundspotentially required for the restart, acquisition and other group activitiestotal approximately £60 million (€90 million or US$120 million) rather than theoriginal estimate of £79 million, due to refined scheduling of expenditure andrevenues. The latest projections show that the earliest that the PRT productionrestart could occur would be the third quarter of 2008. 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. EMED Mining's Annual General Meeting will be called in April 2008 at whichshareholder approval will likely be sought for the exercise of the PRT optionand associated financial arrangements, subject to satisfaction of all conditionsprecedent including receipt of all regulatory permits. PRT Resources and Reserves SRK Consulting has provided the following JORC-compliant estimates for PRT: • Mineral Resources totalling 255 million tonnes at 0.57% copper,containing 1.44 million tonnes copper; and • Ore Reserves totalling 69 million tonnes at 0.65% copper, containing0.45 million tonnes copper. It is notable that only 40% of resources are currently converted to reserves.Further drilling and other evaluation work is expected to significantly increasereserves by converting an increased percentage of resources to reserves. The mineral concession also includes additional significant resources which willnot be published until EMED Mining undertakes further exploration to enable aJORC-compliant estimate to be made. Further information on the PRT Ore Reserve and Mineral Resource estimates arecontained in EMED Mining's announcement dated 2 August 2007. 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 program to date were the identificationof initial resources for the Klirou Copper-Zinc Project and further encouragingresults at several other nearby locations including the North 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 programs 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. Competent Persons Mr Ron Cunneen, B.Sc. (Honours) has approved for release the references in thisannouncement relating to: • exploration results and potential in Slovakia; • JORC-Compliant mineral resources in Cyprus; and • Russian resources in Georgia. Mr Cunneen is Head of Exploration for EMED Mining and has more than 20 years'relevant experience in the field of activity concerned. He is a member of TheAustralian Institute of Geoscientists. The specific information in respect of PRT in this and the previous announcementthat relates to JORC-Compliant mineral resource and ore reserves is based oninformation compiled by Ms Sonia Konopa (Senior Geologist), MSc (Economic &Mining Geology), BAppSc (Honours Geology) with 20 years relevant experience inthe mining industry, and Mr Andy Robb (Principal Mining Consultant), BSc (MiningEngineering), with 30 years relevant experience in the mining industry, who areboth employees of AMC Consultants (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. CORPORATE DIRECTORY EnquiriesEMED Mining RFC Corporate Finance Fox-Davies Parkgreen Capital CommunicationsHarry Anagnostaras-Adams Stuart Laing Richard Hail Justine Howarth+357 9945 7843 +61 8 9480 2500 +44 207 936 5220 +44 20 7851 7480 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 GMP Securities (Europe) Ltd Lewis Charles Securities Ltd Public Relations Parkgreen Communications Share Registrar Computershare Investor Services Plc Issued Capital 147.9 million shares on issue 29.7 million options on issue, with exercise prices ranging from 8.0p to 20p per share. Significant Shareholders O Management and Board (15%), (fully-diluted 27%) O Oxiana Limited (12%) O Gold Fields Limited (10%) O RMB Australia Holdings Limited (4%) O Resource Capital Funds (4%) O Fidelity International (4%) EMED Mining is listed on AIM (Code: EMED) To view this announcement in PDF format including images click on the link below: http://www.rns-pdf.londonstockexchange.com/rns/4467i_-2007-11-26.pdf This information is provided by RNS The company news service from the London Stock Exchange