Update on Rio Rinto Project

31 Jan 2008 07:01

EMED Mining Public Limited31 January 2008 AIM: EMED 31 January 2008 EMED MINING PUBLIC LIMITED ("EMED Mining" or "the Company") UPDATE ON POTENTIAL ACQUISITION OF RIO TINTO PROJECT EMED Mining announces a report on the progress towards the Company's fullacquisition of the Proyecto Rio Tinto ("PRT") in Spain and the restart of copperproduction. If the Board of EMED Mining formally decides to exercise its optionover PRT, which is subject to various conditions precedent, then it will thenseek shareholders' approval to proceed. Preparations and Planning For The Potential Restart of Production The Company plans to send a circular to all shareholders in April containingdetailed information on PRT, in time for them to consider it at the AnnualGeneral Meeting in May. Assuming that a formal decision is made in Q2 2008 to go forward with theacquisition and potential re-start of production at PRT and that regulatory andshareholder approval are in place, the Company currently plans to initiate there-start of production at PRT in Q4 2008. EMED Mining has begun work on theplanning, documentation and financing required to affect a re-start in order tominimize potential delays once a decision is made and shareholder approvalgranted. As part of its planning process, the Company has made certain keymanagerial appointments, marshaled its advisers, and appointed independentconsultants to prepare a Competent Person's Report. Recruitment of Production Leadership Team and Workforce The Company has appointed Mr William Enrico as Group Chief Operating Officer. Hewill shortly be based in Rio Tinto and, subject to the re-start of production atPRT, will lead the production team in Spain and the establishment there of thegroup's operational headquarters. Mr Enrico has extensive experience as a seniorexecutive of copper smelting, concentrating and mining operations in SouthAmerica, North America and Europe. Given the significance of PRT to EMED Mining, Managing Director HarryAnagnostaras-Adams and Head of External Relations Dr Demetrios Constantinidesbased themselves in Seville and Rio Tinto last year to work with the Chairman ofthe Company's subsidiary in Andalucia, Mr Guillermo Gutierrez. Mr Gutierrez is aleading figure in Andalucia and the former Minister for Industry. Other members of the Company's senior management are now starting to move intothe significant office facilities at the PRT site to facilitate the PRT re-startdecision. This includes Chief Geologist Mr Ron Cunneen and Chief OperatingOfficer Mr Enrico, both of whom will work on preparations with the projectmanagers and advisers on-site. Finance Director Mr John Leach has just moved toNicosia as has newly appointed Chief Financial Officer Mr Lakis Katsamas toexpand the group's treasury and marketing subsidiary for the potential re-startat PRT. Since EMED Mining acquired its option over PRT, staff numbers on the PRT sitehave increased from approximately 20 to approximately 40 personnel, includingconsultants and other technical specialists involved with preparing for thepotential re-start. Recruitment of the permanent workforce of approximately 250personnel is planned to commence once regulatory approvals are received. Furtherappointments would follow as production is raised towards plant capacity overthe first two production years. Update on Operational Matters at PRT Over the past 6 months EMED Mining has undertaken various activities in order toboth maintain and prepare the PRT facilities for the potential re-start. TheCompany is currently scheduling various repairs and preparations to theproduction plant including: • Reconnection of mains electricity, initially only for plant testing • Procurement of critical spares • Replacement of worn or missing parts • Re-commissioning Testing has commenced on certain parts of the plant where diesel power sufficesand submissions have been invited from Andalucian construction contractors toremove and replace the asbestos sections of the roofs of buildings at the sitein compliance with safety standards. Submissions will now be invited from international laboratory companies to takeover the operations of the extensive environmental and metallurgicallaboratories at PRT. EMED Mining has to date spent approximately €5 million in evaluating andmaintaining PRT. Expenditure continues on PRT at approximately €300,000 permonth while the restart decision is pending. Conditions Precedent It is necessary that all conditions precedent be satisfied in order for theCompany's shareholders to be asked to fully approve the exercise of the optionand to re-start of production at PRT at the Annual General Meeting. Theseconditions include receipt of all regulatory permits and the arrangement offinance set out previously, and in summary are: Regulatory approvals of the Restart Plan by the Provincial Government (Junta deAndalucia), support of the local community and approvals by the relevantstatutory authorities in respect of ancillary applications and performancebonds; •Settlement satisfactory to EMED Mining of the disputes and liabilities of PRT's vendor, including liens and contractual arrangements where required with a number of third parties including landholders; •Completion of all due diligence to EMED Mining's satisfaction including environmental considerations and infrastructure requirements. EMED Mining will report any further progress it makes on satisfying theconditions precedent as and when such progress occurs. Potential Financing of PRT EMED Mining currently has cash at bank of €3.5 million (£2.5 million) and hasyet to fully draw on its Standby Equity Facilities. The Company is activelypursuing discussions on potential financing arrangements for the restart andfull acquisition of PRT with potential providers of finance who have commencedsite visits and are conducting detailed technical and financial due diligence onPRT. Speaking at Rio Tinto, Mr Harry Anagnostaras-Adams, Managing Director of EMEDMining and its subsidiary in Andalucia EMED Tartessus S.L said: "We remain optimistic that we will receive all necessary permits once theGovernment becomes satisfied with our Company's professional and financialcredentials, and that we can deliver the remaining conditions precedent and sobe in a position to create significant value for the various stakeholdersassociated with this attractive copper mine." -Ends- Enquiries:EMED Mining RFC Corporate Fox-Davies Capital Parkgreen Communications Finance Harry Stuart Laing Richard Hail Justine Howarth / Anagnostaras-Adams Erica Nelson+357 9945 7843 +618 9480 2500 +44 20 7936 5200 +44 20 7851 7480www.emed-mining.comwww.emed.tv 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 18.75p and market capitalisation has increased from approximately £4million to approximately £27.95million. 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. 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 gold discoveries at Biely Vrch, Kralova and Slatinske Lazy 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 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. 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