Atalaya Mining Regulatory News (ATYM)

21 Nov 2007 07:01

EMED Mining Public Limited21 November 2007 AIM: EMED 21 November 2007 EMED MINING PUBLIC LIMITED ("EMED Mining" or "the Company") STATUS OF EMED MINING'S POTENTIAL ACQUISITION OF RIO TINTO PROJECT IN SPAIN AND RESTART OF COPPER PRODUCTION IN 2008 EMED Mining announces that it is making good progress towards triggering itsoption for the full acquisition of the Proyecto Rio Tinto (PRT) in Spain and therestart of copper production in 2008. The Company has support from unions, environmentalists, local community andemployer groups. The Company's shareholders and financiers are also providingsolid support. Project management experts AMC Consultants are leading the preparation of adetailed restart plan and the site team is being expanded from the current 40personnel as the workload accelerates. An application has now been lodged fortemporary electricity connection to facilitate more plant testing. Environmentalexperts URS indicate that the tailings dam classification for environmentalbonding is consistent with the Company's restart plans and proposals. 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. Based on current engineering and financial analysis the estimated fundspotentially required for the restart, acquisition and other group activitiestotal approximately £60million (€90million or US$120million) rather than theoriginal estimate of £79million, 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's Annual General Meeting will be held 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. Speaking at this week's Mines and Money event in London, Mr HarryAnagnostaras-Adams, Managing Director of EMED Mining said: "EMED Mining's current asset portfolio is shaping very well, especially thewholly-owned significant gold discovery in Slovakia. The Company also continuesto steadily build its confidence that PRT copper project in Spain will proceedand will be worthwhile for all stakeholders. We are making steady progress inour due diligence and we are convinced that our restart plans should fulfill allrequirements and standards at the local, regional, national and internationallevels. We respect the Government's understandable caution in dealing with sucha high-profile project with a poor recent history. We remain optimistic that wewill receive all necessary permits as the Government becomes satisfied with ourCompany's professional and financial credentials, together with the progress wedemonstrate and our clear independence from previous owners." Other results of due diligence to date (reviewed by: AMC Consultants, projectmanagement experts; URS, environmental experts; and Baker McKenzie, legalexperts, as appropriate) include: o This proposal remains subject to significant conditions precedent, essentially: - Regulatory approvals by the Government (Junta de Andalucia) and by the relevant statutory authorities; - Satisfactory settlement, where required, of the PRT-vendor's liabilities, liens and contractual arrangements with a number of third parties; o 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. Whilst striving to satisfy these remaining conditions precedent, EMED Mining andits subsidiary EMED Tartessus continue refining operating plans and verifyingcost and other analyses in consultation with past operating managers andspecialist consultants. Key aspects include: o JORC-compliant Mineral Resources 255 million tonnes at 0.57% copper(containing 1.44 million tonnes copper) and Ore Reserves 69 million tonnes at0.65% copper (containing 0.45 million tonnes copper); o 10-year Base Case for production of 40,000 tonnes per annum ofcopper-in-concentrate, based on processing 7.5 million tonnes of ore per annum.This represents 83% of historical maximum capacity through the existingtreatment plant at PRT; o The adoption of more conservative copper price assumptions forfinancial modelling purposes results in the estimated annual average EBITDAbeing £40million for 100% of PRT for its years of full production (ignoring partyears) based on: - an average copper selling price of US$2.08/lb over 10 years (currentspot market US$3.40/lb). The Company currently intends to arrangeprice-protection via hedging during the first 2 years, although this will dependon the financing arrangements that it ultimately enters into. Price forecastshave been based on tracking the London Metal Exchange forward price curve downto US$2.70/lb at the end of year 5 and thereafter assuming US$1.50/lb flat; - total costs of US$1.19/lb including all capital and operatingexpenditure expenditure, which is below the average for major new copperprojects; - The adoption of the same copper selling price assumptions used in theCompany's previous announcements on PRT would result in the estimated annualEBITDA being £70million. Those price forecasts were based on tracking the LondonMetal Exchange forward price curve down to US$2.87/lb and thereafter remainingflat at that level. o The Company also considers that there is considerable scope forincreasing the current Ore Reserves through conversion of existing MineralResources, as well as significant potential for increasing Mineral Resourcesthrough exploration of known mineralisation on the mineral concession; Further information on the PRT Ore Reserve and Mineral Resource estimates arecontained in EMED Mining's announcement dated September 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. The specific information in this and the previous announcement that relates toJORC-Compliant mineral resource and ore reserves is based on informationcompiled by Ms Sonia Konopa (Senior Geologist), MSc (Economic & Mining Geology),BAppSc (Honours Geology) with 20 years relevant experience in the miningindustry, 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. -Ends- EnquiriesEMED Mining RFC Corporate FinanceHarry Anagnostaras-Adams Stuart Laing+357 9945 7843 +61 8 9480 2500www.emed-mining.com www.emed.tv Fox-Davies Capital Parkgreen CommunicationsRichard Hail Justine Howarth / Erica Nelson+44 207 936 5220 +44 20 7851 7480 Notes to Editors: About EMED Mining Public Limited EMED Mining was admitted to trading on AIM in May 2005 following a placing ofits shares. In the two years since then the share price has increased from 8p tothe current 27p and market capitalisation has increased from approximately£4million to approximately £40million. The Company is based in Cyprus and has astrong commitment to responsible development of metal production operations inEurope, with an initial focus on copper and gold. The Company's rapid growth reflects the experience of its specialist team andthe clarity of its strategy. The Group's region of interest are the tectonic belts spanning across Europe andover to the Middle East. 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. 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. In the framework of our community relations policy, we will co-host with theFaculty of Environment of the Technical University of Zvolen, Slovakia and thelocal municipalities an international conference on Responsible Mining andEnvironmental Protection. The conference took place in Detva (Central Slovakia)on 12 November 2007. EMED Mining has now established a strong position in the following selectedzones: • 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 gold discovery at Biely Vrch in Slovakia. • The mines in Cyprus and at Rio Tinto in Spain, located in the Iberian pyrite belt, are probably amongst the best known in the world. 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. • EMED Mining's main prospects in Georgia are gold prospects 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 (detailed in 2006 Annual Report). • Exploration areas in Turkey 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. This information is provided by RNS The company news service from the London Stock Exchange