Atalaya Mining Regulatory News (ATYM)

21 Oct 2009 07:00



AIM: EMED 21 October 2009

UPDATE ON GOLD EXPLORATION IN SLOVAKIA 

EMED Mining Public Limited ("EMED Mining" or "the Company"), the European-based minerals exploration and development company formed by international specialists, is pleased to announce an update on its gold exploration program in Slovakia for 2009 and to also provide background information about this program within the strategy implemented since the Company's formation and first visit to Slovakia four years ago. 

In late 2008 the European Union ("EU") published a Communication "The raw materials initiative - meeting our critical needs for growth and jobs in Europe" which highlighted, among other things, the need for Europe to develop its internal sources for raw materials. Parts of Europe have significant minerals endowment and metals industry specialists are being welcomed in selected areas. 

In 2008 Slovakia passed legislation specifically permitting gold extraction with conventional cyanidation techniques subject to compliance with EU and other applicable standards. Slovakia is a progressive new member of the EU, was a major source of precious metals in the past but has not yet had the benefit of modern minerals exploration and the application of the principles of modern sustainable development practices as applicable in the minerals sector.

The areas held by EMED Mining historically yielded over 120 million ounces of silver and 3 million ounces of gold. The Company has been active in Slovakia for four years and has demonstrated that its licence holdings host significant gold mineralisation. EMED Mining has recently completed a positive scoping study for the development of its first Slovakian gold discovery at Biely Vrch. 

Highlights of EMED Mining's Program in Slovakia

Overview of EMED Mining's strategy and activities:

EMED Mining was formed by experienced exploration and development managers and investors based on its assessment that selected parts of Europe would become supportive of the development of a modern metal production industry. The minerals endowment in Europe was well demonstrated and the major challenge was geopolitical;

EMED Mining selected a few projects to focus on from a large number evaluated and prioritised a part of Slovakia where it owns 100% of its exploration licences via subsidiaries;

The Company's licence holdings are regularly refined and this continued during 2009. The licences currently cover in aggregate 1,009km2 - the largest such holding in Slovakia;

The team is based in Banska Stiavnica located in the centre of our exploration holdings and comprises mostly Slovak personnel, supported by other specialists based mainly in Spain; 

Including the Biely Vrch Deposit discovered in 2006, the Company has tested seventeen gold porphyry targets since refining the relevant geological models and tools in 2007. Ten of those targets were tested during 2009 including drilling at four targets; and

Total expenditure over the four years in Slovakia is €5.2 million, primarily at Biely Vrch. The 2009 budget for all activities is €1 million, less than half the 2008 level. This will be revised in due course as the project warrants and as capital markets continue to recover from the global financial crisis. Priorities in Slovakia for Q4-2009 are to commence the land-selection and permitting process at Biely Vrch and to complete the 2009 exploration program. 

Biely Vrch Project:

In 2008 the Company drilled-out a 1.1 million ounce gold resource (compliant with JORC Standard) at the Biely Vrch Deposit - see announcement 23 February 2009; 

In 2009 the Company and its consultant AMC Consultants, a global leader in mining project assessment and advice, completed a scoping study on the potential development of the Biely Vrch Deposit, showing a Base Case undiscounted Net Cash Surplus of €130 million (US$194 million or £117 million) or a Net Present Value ("NPV") of €54 million (US$80 million or £49 million) - see announcement of 12 October 2009. This is based on the recovery of approximately 600,000 ounces of gold by open-cut mining methods from the top of the Biely Vrch mineralised system over a 10 year period, assuming a gold price of US$1,000/ounce and currently estimated costs; 

The aggregate discovery cost to date of the Biely Vrch Deposit is in the order of US$5 per ounce resource as against the indicative NPV (of the open cut mine designed to date) in the order of US$80 per ounce resource; and

For accounts purposes all expenditure in Slovakia has been written off pending a development commitment which will follow the granting of relevant regulatory permitting expected in due course.

Biely Vrch Deeps:

Drilling results indicate a higher-grade core to the Biely Vrch mineralisation system, with increasing grade at depth and also that mineralisation is open at depth. The Company has to date only completed limited drill-testing of mineralisation below the resources defined at Biely Vrch ("Biely Vrch Deeps"). Biely Vrch Deeps is considered to have multi-million ounce potential and of particular interest is the possibility that the higher-grade core increases in grade sufficiently to render it economic for bulk mining by underground methods. 

Prospecting gold porphyries other than Biely Vrch:

All four gold porphyries drill-tested in 2009 are extensively gold-mineralised, but two are clearly of sub-economic grade. Drilling continues at the other two which are interpreted as similar to but potentially larger mineralised systems than Biely Vrch. The drilling results are encouraging but inconclusive. Drilling will continue as weather permits.

Prospecting other mineralisation styles:

Other mineralisation styles on EMED Mining's licence holdings have begun to be assessed by the Company, partly in collaboration with the owners of a high-grade underground gold mine operating on a mining lease surrounded by our exploration licences.

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

"Our major achievements in Slovakia are the completion of a positive scoping study at our Biely Vrch porphyry gold discovery and the establishment of an efficient system for quickly and cheaply testing the many other porphyry gold systems on our ground. Our team is quite well practiced at this task and we consider the odds are in the Company's favour for making this a multi-mine district.

"Biely Vrch Deeps has multi-million ounce potential and we have other gold styles to test which we think have similar potential.

"We are well supported by local communities and feel very welcomed in our endeavours."

Enquiries

Exploring Regional Prospects 

Porphyry Gold

EMED Mining has discovered a gold district containing a large number of previously unrecognised mineralised prospects of the category known as "porphyry gold", similar to certain deposits in South America and Turkey. So far, in addition to discovering Biely Vrch, EMED Mining discovered porphyry gold systems worthy of testing on all its licences in the Central Slovakia Volcanic Field. Seventeen have been tested to date and another five are currently being prepared for testing. 

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.

Porphyry gold targets tested to date:

The Company considers it important to test many targets quickly and cost-efficiently so as to optimise the probabilities of success and the risk/return balance of the program;

Seventeen porphyry gold systems have been tested over the past two years with a combination of prospecting techniques including database interrogation, geological mapping, geochemical sampling of soils and stream sediments and drilling. Of the seventeen targets, six were rejected prior to drilling, seven have qualified for drill-testing and four are still being worked up to drilling stage; 

Of the seven that qualified for drill-testing so far, one proved economic, two are still being assessed and four were rejected as sub-economic.

For the 2009 program, we budgeted drill-testing four prospects (originally scheduled to be Zlatno, Sementlov, Stozok and Beluj). Two (Zlatno and Sementlov) yielded negative drilling results and one was rejected before drilling began (Stozok). The Beluj prospect warrants further drilling based on assay results from two EMED Mining drill holes and from a past government drilling program; 

During 2009, many more porphyry gold systems have been identified and five of these systems are currently being focused on (Pstrusa, Zupkov, Jakalovci, Strbov Stal and Prencov). Drilling is in progress at Pstrusa; 

The results of the 2009 regional porphyry gold exploration program will be reported at the end of the year. Further drilling is currently planned for Pstrusa and Beluj during 2009, both of which are interpreted as larger mineralised systems than at Biely Vrch;

At Biely Vrch Deeps the principal observations to date include:

The deposit has been delineated by drilling for JORC compliant resource reported in early 2009. The deposit is well defined in "X and Y" directions and is open at depth. The deepest holes at Biely Vrch go down to "0 RL", which means approximately 400m below existing surface. All drill holes are inclined, mostly at 60°.

Gold grade increases towards depth and holes in the core of the deposit ended in mineralisation with a grade over 1.5 g/t and increasing. Results from three drill holes are summarised below, focusing on grade variability as the holes deepened:

*extreme values excluded 

Summary of the 17 Porphyry Gold Systems Tested to date

Tables of drilling results and maps showing, inter alia, the location of these prospects are provided in the version of this announcement uploaded to the Company website.

Other Mineralisation Styles

Several other gold mineralisation styles have been identified on EMED Mining's licences, including:

High grade gold veins of the so-called Rozalia mine type;

Epithermal low-sulphidation veins;

Epithermal low-sulphidation stockworks; and

Epithermal high-sulphidation ore bodies. 

The gold potential of the above mineralisation styles is judged to be as large as that of the porphyry gold systems which have been the focus of EMED Mining's exploration to date.

The key characteristics of these four mineralisation styles are summarised below.

High grade gold veins - Rozalia style:

The Rozalia Gold Mine is being exploited by a third party on a mine lease surrounded by our exploration licences;

Mineable by underground methods; 

Never-tested potential for bulk underground mining; and

High grade gold: 100-1000g/t in veins; 5-20g/t diluted average.

Epithermal low-sulphidation veins:

Underground mineable deposits; 

Occur in system of parallel vein zones accompanied by large alteration zones;

Never-tested potential for bulk underground mining; and

Also contain silver (1:10 to 1:50 gold:silver).

Epithermal low-sulphidation stockworks:

Metallurgically simple; gold is recoverable via conventional heap leaching;

Contain 1:10 to 1:30 gold:silver;

One target drilled (2006, Banska Bela), one mineralised zone rejected before drilling (Barenleuten-Rabenstein-Hadova-Banky). Several prospects being assessed; and

Others are being evaluated.

Epithermal high-sulphidation bodies:

Have been mined by open-pits from surface for silica: up to 0.7g/t gold (Sobov, Varta);

Interesting never-tested potential for bulk underground mining; and

Typically contain 1:10 gold:silver.

Social Licence

A core value of EMED Mining is to invest in a socially and environmentally responsible manner, with a view to creating significant social benefits via collaborative working partnerships. A matter of equal importance to the assessment of the technical merits of our projects in Slovakia is the degree of social licence earned. The recent admission of the Company's Chairman and Managing Director in Slovakia (Harry Anagnostaras-Adams and Demetrios Constantinides) as Honorary Members of the Miners' Association reflects the Company's standing locally. Other recent admissions help to demonstrate the standing of our industry in Slovakia and include the current and previous Presidents of the Slovak Republic, other Members of the Slovak Parliament and the General Secretary of the United Nations Educational, Scientific and Cultural Organization ("UNESCO").

EMED Mining personnel have built up relationships with the Slovak government, local communities, business chambers, scientific societies and other stakeholders that are based on integrity, transparency and progress. These stakeholders have been very supportive of the responsible development of metal production operations in Slovakia. 

EMED Mining carries out an open dialogue with stakeholders to ensure that its exploration and potentially its mining and metal production activities are undertaken in appropriate locations and in an appropriate manner. The public endorsements of EMED Mining by regulators, Government spokesmen and other community leaders has been previously reported.

As part of our community relations process, the Company will again organise the local Clean Up the World day in November 2009 in association with the Municipalities of Banska Stiavnica and Detva, the Faculty of Environmental Sciences at the Zvolen Technical University and various local communities and organisations. Volunteers will clean-up the Geo-park of Banska Stiavnica hills. 

The Company is clearly benefiting from the Slovak governments supportive mining policies. Unlike some of its neighbours, Slovakia supports gold and other metal production which is developed and operated in accordance with international standards and practices.

Permitting Process

Permitting in Slovakia with regard to exploration for and mining of mineral resources is administered by the Ministries of Environment ("MOE") and Economy ("MOEc"), respectively.

The Division of Geology and Natural Resources at MOE evaluates applications and grants exploration licenses. Following the submission and assessment of the final exploration report, MOE approves the resources/reserves of exclusive minerals and issues respective statement thereof, in cases where exploration has delineated a potentially economic accumulation of minerals/metals.

The state authority in the field of mining is the Main Mining Bureau ("MMB"), which is overseen by the MOEc, and its five regional mining offices. MMB's headquarters are in Banska Stiavnica on the same street as EMED Mining's office in Slovakia. 

The main phases to the Mining Permit Process are as follows: 

A title on a protected mineral deposit to be granted

A title on Mining Field to be granted

Mine planing preparation

EIS and associated studies preparation

Land acquisition

Option agreements

Definite agreements and acquisition, or

Compulsory expropriation 

Plans and studies to be approved

Mining permit to be granted

Following the recent completion of the Biely Vrch Scoping Study, the permitting timetable is currently being discussed with the authorities with a view to initiating permitting submissions in the next six months and starting development in 2012.

Competent Person

Information in this announcement that relates to Mineral Resource estimates and exploration results is based on information compiled by an appropriate team of geologists and specialists consultants under the monitoring and supervision of Mr Ron Cunneen, BSc (Hons.) Geology. Mr. Cunneen is Head of Exploration for EMED Mining and a full-time officer of that company. He has had more than 20 years' experience in the field concerned and is a Member of The Australian Institute of Geoscientists. Mr. Cunneen has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activities he is undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Cunneen consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Sampling and Assaying Procedures

All drilling on the Biely Vrch Prospects has been done with PQ (85.0mm diameter), HQ (63.5mm diameter) and NQ (47.6mm diameter) size core samples. Core recovery has averaged 95% throughout the mineralised zones. All core has been logged and separated into 1.0m lengths. PQ size core has been quartered, while HQ and NQ sized core have then been cut in half by a diamond saw. The split core has then been sent for assay.

Sample preparation has been done by ALS - Chemex in Romania and assayed for gold by 30gm fire assay (method Au-AA25). Both standards and blanks have been used in the sample batches sent by EMED Mining to ALS - Chemex in line with EMED Mining company quality control procedures.

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 the implementation of European Union and other leading-edge international standards. The Company strictly implements its Environmental & Community Policies which includes:

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

The mines in Cyprus and those at Rio Tinto in Spain located in the Iberian Pyrite Belt, are probably among the best known in the world for their base metal 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 is the operator of joint ventures in Turkey with Centerra Gold Inc of Canada and in the Kingdom of Saudi Arabia with local construction and investment group ARTAR. See www.kefi-minerals.com.

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

Appendix - Tables of Drilling Results and Geological Maps

Summary of Key Drilling Results for the Four Porphyry Gold Systems Drilled during 2009

Summary of Key Drilling Results for the Porphyry Gold Systems Drilled Prior to 2009

Note that grades over the whole of porphyry gold systems so far typically averages between 0.2g/t and 2.0 g/t. At Biely Vrch, there is a higher grade core and, outside that core, 1 in 3 drill intersections averaged under 0.4g/t gold. The management task of judging whether or not to continue drilling at sites like Beluj and Pstrusa (the current focus of drilling) is based on a combination of interpretative techniques aimed at quickly dropping "duds" but persevering where the combination of factors is encouraging, including scale of the system as interpreted from geological mapping.

Slatinske Lazy drillhole intersections:

Kralova drillhole intersections:

Biely Vrch drill hole intersections: