eEnergy Group Regulatory News (EAAS)

26 Feb 2008 07:00

Alexander Mining PLC26 February 2008 Alexander Mining plc Leon Project Update 26th February 2008 Alexander Mining plc ("Alexander", the "Company"), the AIM-listed mining andmineral processing technologies company announced today: Leon Project Update Since Alexander's shares were admitted to trading on AIM in 2005, the Companyhas focussed its investment strategy in Latin America, specifically Argentina,where until recently the Company had found support for its developmentactivities at both the local and national levels. Following a change of nationalgovernment in October 2007, a 10% export tax on existing mines was imposed inviolation of the Argentinean 30-year tax stability law and 3% royalty capintroduced in 1989, under which the country's mining industry had benefited fromstrong investment and activity. Prior to this, the ability of individualprovinces to arbitrarily increase mining taxes prevented any fiscal stabilityand satisfactory operating environment for mining companies. This decision hasdamaged both the prevailing fiscal regime and investors' country and investmentrisk assessment. Moreover, this development was coincident with the ongoingsub-prime banking crisis. Notwithstanding the change in legislation, the Company is continuing to advancethe debt financing of its Leon copper and silver project in Salta Province,northwest Argentina. However, it is taking longer than initially envisioneddue, in significant part, to these recent Argentine national and provincialgovernment developments which are beyond the control of management and whichhave led to uncertainties over the future fiscal regime for new miningoperations and attendant financing challenges. Whilst we believe that we will be able to finalise the outstanding technical and related aspects of thefeasibility study in the next few months, it will be a financing and developmentdecision prerequisite that there is complete clarity and confidence in theprevailing fiscal regime for mining companies in the country. These uncertainties are not specific to Alexander, indeed several miningcompanies, including some of the world's largest, have stated their intention to take legal action to prevent the government imposing the new export duties. Whilst there is uncertainty about the fiscal regime for mining companies, thepre-tax project economics of the Leon copper and silver project remain robust,and with development of its AmmLeach(R) process, the economic value of anymining operation at Leon is magnified beyond absolute project investmentreturns. This is due to the benefit that it brings in the efforts in marketingthe AmmLeach(R) process to the mining industry by having a commercial operationusing the technology. Accordingly, the Company is taking a pragmatic view on its options for thescale, and associated financing requirements, of a mine at Leon. It willmaintain a prudent approach by tightly controlling costs and conserving itssignificant cash position. Further updates will be made in due course. For further information please contact: Martin Rosser Matt SutcliffeChief Executive Officer Executive ChairmanMobile: + 44 (0) 7770 865 341 Mobile: +44 (0) 7887 930 758 Alexander Mining plc1st Floor35 PiccadillyLondonW1J 0DW Tel: +44 (0) 20 7292 1300Fax: +44 (0) 20 7292 1313Email: mail@alexandermining.comWebsite: www.alexandermining.com Nominated Advisor and BrokerAlasdair Younie/John PriorArbuthnot Securities LimitedArbuthnot House20 Ropemaker StreetLondonEC2Y 9ARTel: +44 (0) 20 7012 2000 Public/Media RelationsTim BlackstoneBritton Financial PR62 Britton StreetLondonEC1M 5UYTel: +44 (0) 20 7251 2544Mobile: +44 (0) 7957 140 416 This information is provided by RNS The company news service from the London Stock Exchange