Orogen Gold Regulatory News (ORE)

6 Aug 2008 07:15



Aricom plc

("Aricom" or "the Company" or "the Group")

Interim Report for the six months to 30 June 2008

Aricom plc (LSE:ORE, OREW), the Anglo-Russian developer of mineral resources, issues these interim financial results for the six months to 30 June 2008 ("the Period") further to the interim management statement released in May.

Highlights of the interim financial results and progress during and following the Period include:

Pavel Maslovskiy, Chairman, said:

"I am delighted to report that Aricom has continued its strong performance in the first half of 2008 and has reached another milestone in the progress of the Group from developer to revenue producer. In June, we completed our first sales from Kuranakh proving a critical stage in the Group's evolution. All the team at Kuranakh can be immensely proud of what has been achieved to date and I look forward to the official opening of the mine in the second half of the year after the expected commencement of regular shipments in September.

The achievements at Kuranakh stand us in good stead for the development of our larger projects, K&S and Garinskoye, both of which continued their good progress in the first half of the year. We are due to deliver project studies in the second half of the year which I am confident will re-emphasise the robustness of both investment propositions and provide us with a strong platform for our approach to the debt markets. These studies will benefit from the optimisation programme that foresees both K&S and Garinskoye ore being beneficiated at a plant at K&S. In that regard, in May 2008 we announced the appointment of a leading international investment bank to act as financial adviser for the funding for further development of both projects and we have had positive initial discussions with a number of banks.

Our acquisition programme continued in the first half of 2008 with the purchase of options to acquire the Garinskoye Flanks and Kostenginskoye licences. Both these projects are in areas the Group knows well and will be an exciting expansion to the portfolio, virtually doubling our attributable reserves and resources. Aricom is now in the enviable position of having both a near term and a long term organic growth pipeline.

I believe that Aricom remains in an excellent position to capitalise on the continuing strong fundamentals for its business. Iron ore markets remain strong, particularly with the recent settlement of contract prices at record levels and with the pig iron price also rising to unprecedented levels."

For further information: 

CONFERENCE CALL

A conference call to discuss the announcement will be hosted by Aricom, on Wednesday 6 August 2008 at 11:00 UK time.

Details to access the conference call are as follows:

- Dial-in number in the UK will be: 020 3140 9064 and internationally will be +44 20 3140 9064

Participant PIN code in both cases: 176444# In advance of this call, participants should find the results presentation on Aricom's website from 10:00 UK time.

Project Update

KURANAKH PROJECT - Titanomagnetite Deposit nearing Commissioning Stage

H1 2008 Highlights

First sales of iron ore concentrate

Crushing and screening plant at pre-commissioning phase

Background: OOO Olekminsky Rudnik ("Olekma"), a 100% owned subsidiary of Aricom, holds the licence for the exploration and exploitation of the Kuranakh ilmenite and titanomagnetite deposit in the north west of the Amur Region.

The licence covers an area of 85 square kilometres and was explored extensively both during the Soviet era and subsequently by Aricom.

Eight individual ore zones were identified within the licence area along a strike length of five kilometres and over a width of 1.5 kilometres. Two ore zones, Ore Zone 1 and Ore Zone 3, are scheduled for mining by open-pit methods, as they are currently believed to host the highest grades and lowest stripping ratios. According to the feasibility study these two ore zones support a mine life of 15 years. However the Directors believe that with further successful exploration this period could be extended as the other six ore zones may be exploited.

2008 Construction Progress:

First Shipment

On 19 June 2008, Aricom announced that it had completed the first product sales from Kuranakh. The shipped product was an iron ore pre-concentrate that was mined and processed from the Kuranakh deposit. This was an initial sale from previously stockpiled material and was delivered from the Group's loading yard at the Olekma railway station, proving Aricom's ability to deliver to market. It is expected that regular monthly shipments will commence in September 2008.

Crushing and Screening Site

The construction works at the crushing and screening site are approaching completion following delays earlier in the year due to bad weather and equipment supply issues. In January / February the works were stopped for a period due to extremely low temperatures and in March high winds delayed the erection of building panels.

The current status of the works is as follows:

The administration and maintenance building is complete and operational and was used for storing equipment and machines during winter.

The foundations and metal cladding for all of the other buildings are complete.

Primary crusher - the 32 tonne bridge crane, the jaw crusher and the feeder have all been installed; the foundation for the hopper platform is being constructed; and installation of the conveyor to the primary stockpile is in progress. The cable ducts are being installed ready for automation.

Secondary crusher - the installation of the roof and wall panels and the bridge crane is complete; the cone crushers have been installed.

Foundation works for the coarse and fine ore stockpiles and conveyor galleries are almost complete.

All of the boiler equipment has been delivered to the site and is being installed. The heating plant is expected to be ready by the end of August 2008.

Mining works

Good progress has been made with the stripping works in the Saikta open pit during the Period. Horizons 740-770 have been mined using two EKG shovels, seven Volvo articulated trucks, one Atlas Copco L8 drill, an ANFO truck and T35 bulldozers.

25,728 linear metres of blast holes had been drilled by the end of June. A surveyed total of 350,700 cubic metres of overburden had been moved by the end of June. The first ore body was exposed at the 745 horizon. The overburden material is being moved to the dumps or used to build the haulroads in and around the site.

 Click on, or paste the following link into your web browser, to view the associated PDF document

http://www.rns-pdf.londonstockexchange.com/rns/7381A_-2008-8-6.pdf