AIM:EMED
21 November
2007
EMED MINING
PUBLIC LIMITED
(“EMED
Mining” or “the Company”)
STATUS OF
EMED MINING’S POTENTIAL ACQUISITION OF RIO TINTO PROJECT
IN SPAIN AND
RESTART OF COPPER PRODUCTION IN 2008
EMED
Mining announces that it is making good progress towards triggering its option
for the full acquisition of the Proyecto Rio Tinto
(PRT) in Spain
and the restart of copper production in 2008.
The
Company has support from unions, environmentalists, local community and
employer groups. The Company’s shareholders and financiers are also
providing solid support.
Project
management experts AMC Consultants are leading the preparation of a detailed
restart plan and the site team is being expanded from the current 40 personnel
as the workload accelerates. An application has now been lodged for temporary
electricity connection to facilitate more plant testing. Environmental experts
URS indicate that the tailings dam classification for environmental bonding is
consistent with the Company’s restart plans and proposals.
It is now
the intention of the Company, if it proceeds to exercise its option, to seek to
acquire as soon as possible 100 per cent of PRT rather than an initial 51 per
cent.
Based on
current engineering and financial analysis the estimated funds potentially
required for the restart, acquisition and other group activities total
approximately £60million (€90million or US$120million) rather than the original
estimate of £79million, due to refined scheduling of expenditure and revenues.
The latest projections show that the earliest that the PRT production restart
could occur would be the third quarter of 2008.
EMED
Mining’s Annual General Meeting will be held in April 2008 at which shareholder
approval will likely be sought for the exercise of the PRT option and
associated financial arrangements, subject to satisfaction of all conditions
precedent including receipt of all regulatory permits.
Speaking at
this week’s Mines and Money event in London,
Mr Harry Anagnostaras-Adams,
Managing Director of EMED Mining said:
“EMED
Mining’s current asset portfolio is shaping very well, especially the
wholly-owned significant gold discovery in Slovakia. The Company also
continues to steadily build its confidence that PRT copper project in Spain will
proceed and will be worthwhile for all stakeholders. We are making steady
progress in our due diligence and we are convinced that our restart plans
should fulfill all requirements and standards at the local, regional, national
and international levels. We respect the Government’s understandable caution in
dealing with such a high-profile project with a poor recent history. We remain
optimistic that we will receive all necessary permits as the Government becomes
satisfied with our Company’s professional and financial credentials, together
with the progress we demonstrate and our clear independence from previous
owners.”
Other
results of due diligence to date (reviewed by: AMC Consultants, project management
experts; URS, environmental experts; and Baker McKenzie, legal experts, as
appropriate) include:
o
This proposal remains subject to
significant conditions precedent, essentially:
§
Regulatory approvals by the
Government (Junta de Andalucia) and by the relevant
statutory authorities;
§
Satisfactory settlement, where
required, of the PRT-vendor’s liabilities, liens and contractual arrangements
with a number of third parties;
o
Discussions have commenced with the
community leaders in respect of the facilitation of long-term sustainable
enterprises which benefit from the planned mining operations but can continue
beyond the ultímate cessation of mining. It is the
Company’s intention to make PRT its international operational base and to
provide export services from PRT, such as drilling and laboratory services.
Whilst
striving to satisfy these remaining conditions precedent, EMED Mining and its
subsidiary EMED Tartessus continue refining operating
plans and verifying cost and other analyses in consultation with past operating
managers and specialist consultants. Key aspects include:
o
JORC-compliant Mineral Resources 255
million tonnes at 0.57% copper (containing 1.44 million tonnes copper) and Ore
Reserves 69 million tonnes at 0.65% copper (containing 0.45 million tonnes
copper);
o
10-year Base Case for production of
40,000 tonnes per annum of copper-in-concentrate, based on processing 7.5
million tonnes of ore per annum. This represents 83% of historical maximum
capacity through the existing treatment plant at PRT;
o
The adoption of more conservative
copper price assumptions for financial modelling purposes results in the
estimated annual average EBITDA being £40million for 100% of PRT for its years
of full production (ignoring part years) based on:
§
an
average copper selling price of US$2.08/lb over 10 years (current spot market
US$3.40/lb). The Company currently intends to arrange price-protection via
hedging during the first 2 years, although this will depend on the financing
arrangements that it ultimately enters into. Price forecasts have been based on
tracking the London Metal Exchange forward price curve down to US$2.70/lb at
the end of year 5 and thereafter assuming US$1.50/lb flat;
§
total costs of US$1.19/lb including
all capital and operating expenditure expenditure,
which is below the average for major new copper projects;
o
The adoption of the same copper
selling price assumptions used in the Company’s previous announcements on PRT
would result in the estimated annual EBITDA being £70million. Those price
forecasts were based on tracking the London Metal Exchange forward price curve
down to US$2.87/lb and thereafter remaining flat at that level.
o
The Company also considers that
there is considerable scope for increasing the current Ore Reserves through
conversion of existing Mineral Resources, as well as significant potential for
increasing Mineral Resources through exploration of known mineralisation on the
mineral concession;
Further
information on the PRT Ore Reserve and Mineral Resource estimates are contained
in EMED Mining’s announcement dated September 2007.
Competent
Persons for Reporting of Resources and Reserves
References
in this announcement to exploration results and potential have been approved
for release by Mr Ron Cunneen, B.Sc. (Honours).
Mr Cunneen is Head of Exploration for EMED Mining and
has more than 20 years’ relevant experience in the field of activity concerned.
He is a member of The Australian Institute
of Geoscientists.
The specific
information in this and the previous announcement that relates to
JORC-Compliant mineral resource and ore reserves is based on information
compiled by Ms Sonia Konopa (Senior Geologist), MSc
(Economic & Mining Geology), BAppSc (Honours
Geology) with 20 years relevant experience in the mining industry, and Mr Andy Robb (Principal Mining Consultant), BSc (Mining
Engineering), with 30 years relevant experience in the mining industry, who are
both employees of AMC Consultants (UK) Limited.
Ms Konopa is a Member of the Australasian Institute of Mining
and Metallurgy and has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration to qualify as Competent
Person as defined in the 2004 Edition of the JORC Code. Ms Konopa
is responsible for the reporting of the mineral resource estimate.
Mr Robb is a
Member of the Australasian Institute
of Mining and Metallurgy
and has sufficient experience relevant to the style of mineralisation and type
of deposit under consideration to qualify as Competent Person as defined in the
2004 Edition of the JORC Code. Mr Robb is responsible for the reporting of the
ore reserve estimate.
Ms Konopa and Messrs Cunneen and
Robb consent to the inclusion in the announcement of the material in the form
and context in which it appears in this announcement.
-Ends-
Enquiries
EMED Mining
|
RFC Corporate Finance
|
Harry Anagnostaras-Adams
|
Stuart Laing
|
+357 9945 7843
|
+61 8 9480 2500
|
www.emed-mining.com
www.emed.tv
|
|
|
|
Fox-Davies Capital
|
Parkgreen
Communications
|
Richard Hail
|
Justine Howarth / Erica Nelson
|
+44 207 936 5220
|
+44 20 7851 7480
|
|
|
Notes to Editors: About EMED
Mining Public Limited
EMED Mining was admitted to trading on AIM in May 2005 following a
placing of its shares. In the two years since then the share price has increased
from 8p to the current 27p and market capitalisation has increased from
approximately £4million to approximately £40million. 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 Company’s rapid growth reflects the experience of its specialist
team and the clarity of its strategy.
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 implementation of European Union and other
leading-edge international standards. The Company has, from the outset,
strictly implemented its Environmental & Community Policy which includes:
·
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.
In
the framework of our community relations policy, we will co-host with the
Faculty of Environment of the Technical University of Zvolen,
Slovakia and the local municipalities an international conference on
Responsible Mining and Environmental Protection. The conference took place in Detva (Central Slovakia)
on 12 November 2007.
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 has announced a gold discovery at Biely Vrch 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 34%-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.com or www.emed.tv
.
Erica Nelson
Parkgreen Communications