BHR.L Regulatory News (BHR)

31 Jan 2008 07:01

Carnegie Minerals plc31 January 2008 31 January 2008 Carnegie Minerals Plc ("Carnegie" or the "Company") Production & exploration update for the quarter ended 31st December 2007 In line with a statutory update for the quarter ending 31st December 2007released today on the ASX by the Company's joint venture partner in The Gambiaand Senegal, Astron Limited ("Astron"), Carnegie Minerals Plc (AIM - CME)announces the following update to its operations in West Africa. (Alldevelopment and operating expenditure in the Gambia is funded by Astron and theyare a 50% contributing joint venture partner in Senegal) Summary • Stopping of production pending clarification from the Gambian Government • 252,194 tonnes of mineral sands mined at an average grade of 9% heavy minerals • 22,767 tonnes of heavy mineral concentrate produced • 42% increase in HMC production from previous quarter • Shipments of 17,900 tonnes of HMC to China • 32,000 tonnes of HMC stockpiled as at 31st December • Joint Venture board approval to award engineering company DRA Pacific contract to construct and commission the concentrate upgrade plant in The Gambia enabling the Company to produce higher value product Government Action On 16 January 2008, the joint venture company received an instruction from theGovernment of The Gambia directing it to stop all operations and to providecertain information in relation to production, grades and prices. An additionalletter with a request of further information was received by the company on 18January 2008. Both letters received from The Gambian Government required theinformation requested to be supplied within 24 business hours in default ofwhich there would be a risk of the cancellation of the Gambian joint venturecompany's licence and other potential action. The Company responded to each ofthe letters within the prescribed time limits. The Company has not received anynotice from The Gambian Government that the licence has been cancelled. TheCompany believes it has supplied all the required information includingindependent SGS laboratory assays and offered to fund an independent industryexpert to assist them in interpreting these results. As at the date of thisannouncement, we await the Gambian Government's response. Given the uncertaintyover the Gambian licence that this action has produced, the directors of theCompany have decided to take the most prudent approach available to it andprovide fully against the carrying value of the Gambian assets on its balancesheet. Given this new development in The Gambia's risk profile, a full provisionagainst the Company's Gambian assets will remain, even in the event theGovernment of The Gambia allows the joint venture company to fully resume itsoperations. Following the supply of the necessary information to the Gambian Government, theCompany awaits a response. Whilst the Company is making arrangements to meetwith the Gambian Government in order to resolve any concerns, the directors ofthe Company currently have no indication or visibility on the timing of theresponse from the Gambian Government on this issue. The Company will makefurther announcements as appropriate when responses from the Gambian Governmentare received. Q4 Gambia Production A total of 252,194 tonnes of mineral sands was mined and processed at an averagegrade of 9% for a total production of 22,764 tonnes of heavy mineral concentrate(HMC). This is a 42% increase in HMC production from the previous quarter. Significant improvements have been made in production rates and mechanicalavailability of mining units. Production Summary October November December Q4 2007Ladder Dredge 22,282 26,090 28,174 76,546Suction Dredge SD1 15,430 21,490 21,095 58,015Suction Dredge SD2 19,165 22,385 24,996 66,546Suction Dredge SD3 16,190 17,042 17,855 51,087Total mined tonnes 73,067 87,007 92,120 252,194HMC tonnes 7,102 6,370 9,292 22,764 Dredge Performance 4th Quarter 2007 October November December tph Availability tph Availability tph Availability % % %Ladder Dredge 45.9 66.5 48.4 74.9 50.9 74.5SD1 34.8 59.5 35.1 85.1 34.1 83.2SD2 34.6 74.5 37.3 83.3 40.2 83.6SD3 27.8 78.4 28.4 83.3 28.0 85.8 HMC Stocks Monthly HMC stockpile surveys were carried out by an independent surveyor. Stockpile totals at 31 December 2007 were 13,484.7m3 for 32,363 tonnes using abulk density of 2.4 tonnes per m3. HMC Shipments A total of 720 containers with 18,596.8 wet tonnes of HMC were trucked to Banjulport during the quarter. Eleven shipments of HM concentrate containing 17,905.7wet tonnes were despatched to China. HMC Shipments 4th Quarter 2007 October November December Q4 2007Containers to port 218 287 215 720Net wet weight trucked 5,541.6 7,352.4 5,702.8 18,596.8No of shipments 2 4 5 11Containers shipped 64 294 337 695Net wet weight shipped 1,644.0 7,386.0 8,875.7 17,905.7 Human Resources At 31 December 2007, a total of 166 personnel are employed in The Gambiacomprising 135 Gambians and 31 expatriates. Senegal During the December quarter independent laboratories in Perth continued toprocess the remaining drill samples obtained during the 2007 drilling programmein Southern Senegal. Based on the final assay results and subject to theavailability of an air-core drilling rig, the company plans to follow upmineralised intersections in the northern and southern parts of the licence areaas well as to drill test in the eastern part of the licence area whereidentified geophysical targets were not drilled during the 2007 programme due tothe onset of the rainy season. The Carnegie Joint Venture signed a contract for the statutory environmentalimpact assessment (EIA) of the Niafarang mining project with reputableSenegalese consulting firm IMCG Sarl, which is awaiting the approval of theTerms of Reference for this study by the Senegalese environmental authorities tostart the environmental impact assessment. - Ends - For further information, call: Alan Hopkins, Managing Director, Carnegie Minerals Plc 020 7831 3113 Romil Patel / Olly Cairns, Blue Oar Securities Plc 020 7448 4400 / + 61 8 6430 1631 Billy Clegg /Edward Westropp, Financial Dynamics 020 7831 3113 This information is provided by RNS The company news service from the London Stock Exchange