2 April 2008
AIM: EMED
EMED MINING PUBLIC
LIMITED
(“EMED Mining”
or the “Company”)
PROYECTO DE RIO TINTO (“RIO TINTO MINE”) UPDATE
EMED Mining
announces that it continues to make good progress towards triggering its option
for the acquisition of the Rio Tinto Mine in Spain that has the potential to
restart copper production. EMED Mining can report that the technical and
economic assessments continue to deliver positive results and that formal
constructive engagement has commenced with all regulatory authorities and other
stakeholders.
The Company has consistently
said that it is necessary that all conditions precedent be satisfied in order
for the Company’s shareholders to be asked to fully approve the exercise
of the option and to re-start production at the Rio Tinto Mine. These
conditions precedent include receipt of all regulatory permits and other items
including the arrangement of finance.
This press announcement brings
EMED Mining shareholders up to date on the status of the principal outstanding
conditions precedent and the implications for the exercise of the option to
acquire the Rio Tinto Mine.
Technical and Economic Assessment: The Company’s
understanding of the Rio Tinto Mine has improved to the point where the Company
considers that most of the conditions precedent on technical and economic
matters have been satisfied. This is based on specialist expert
assessments conducted with the Company’s project adviser AMC Consultants
(UK) Ltd. Updates will be published in the Annual Report to be sent to
shareholders in late April.
Permitting: Formal
applications have been submitted to the regulatory authorities. In the
Company’s view, the principal permitting matter to be resolved is the
satisfactory resolution of legal disputes between the project-vendor company
Mantessur Andevalo S.L, (“MSA”) and the mine-permitting
authorities. The resolution of this matter is being facilitated by EMED
Mining and is a condition precedent. The Company’s local subsidiary
EMED Tartessus S.L (“EMED Tartessus”) is also preparing answers to
requests made by the authorities for further explanations on key aspects of the
project restart. It will then remain for EMED Tartessus to settle with
the authorities the appropriate level of financial guarantees and operational
commitments for the tailings dam, environmental rehabilitation and personnel
entitlements. EMED Tartessus is in formal constructive discussions with
the authorities on all financial guarantees and operational commitments having
completed studies regarding the likely costs and these are built into our
current financing plans.
Counterparty Settlements:
Clarification on the Rio Tinto Mine ownership structure has been assisted
by recent judicial decisions in Andaluc�a where the Courts have determined that
control of the project-vendor company, MSA, should be transferred to its
principal financier. Whilst EMED Mining’s agreements are with MSA,
regardless of who controls that company, the judicial decisions will have the
effect of replacing the current controlling shareholder of that company with a
party of significant industry stature and with whom EMED Mining’s
shareholders, and likely Rio Tinto Mine off-take customers, have long-standing
relationships. EMED Mining awaits the necessary judicial execution of the
Court’s determination which is expected within two months. EMED
Mining is encouraged by these developments as disputes regarding control of the
project-vendor company, MSA, are now being settled by the Courts which will clarify
the situation for all stakeholders and will allow EMED Mining to satisfy an
outstanding condition precedent in a relatively short time frame.
Restart Preparations: Detailed operational restart planning continues
whilst all remaining conditions precedent are resolved to EMED Mining’s
satisfaction. Upon triggering of the option and the restart of production
newly-appointed EMED Mining Chief Operating Officer Bill Enrico, now based at
Rio Tinto, will assemble the future operational team at the Rio Tinto Mine.
Restart plans are well advanced and we anticipate production would be
expected to commence 6 months after exercising the option. Long lead-time
repairs and spares have been identified and will be ordered to achieve the
restart within six months of permits being finalized and the option being
exercised.
Finance:
Major EMED Mining shareholders include international mining companies
Oxiana and Gold Fields, mining-financiers Rand Merchant Bank and Resource
Capital Funds and investment institution Fidelity International. EMED
Mining has been encouraged by the further interest that has also been shown
from a number of additional potential investors and financiers and the Company
continues to support detailed due diligence investigation by these newly
interested parties.
Current estimates of total
funding required remain consistent with previously announced figures of �60 to
�80 million depending upon the speed with which we acquire the Rio Tinto Mine
and move to 100% ownership. Finance plans are focused on the following
approach:
�
minimising expenditure pending the exercise of the
option. The Company has so far avoided committing to any counterparty
settlements;
�
all pre-permitting financing to be by way of equity or
advances repayable with equity, to minimise finance risk;
�
exercising the option upon receipt of regulatory
approval; and
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post-permitting financing to be mainly by way of debt,
so as to minimise equity dilution for EMED Mining shareholders given the
potential rapid payback of investment.
Annual General Meeting (AGM) on 4 June
2008 at Rio Tinto: The Annual Report and
Notice of Annual General Meeting will be issued in late April for the meeting
to be held at Rio Tinto Mine on 4 June 2008.
Shareholder
Consideration of Board Resolution to Exercise Option: EMED Mining’s
Directors are confident that all outstanding conditions precedent are capable
of being satisfied. Preparations continue on the submission of a circular
to shareholders detailing the Board’s recommendation to trigger the
option to acquire and restart production at the Rio Tinto
Mine although that will now be subject to the necessary judicial execution
of the Court’s determination in Andaluc�a which is expected within two
months, and resolving any other outstanding conditions precedent to EMED
Mining’s satisfaction. An independent Competent Person’s Report
will be prepared and published in due course as part of the circular to
shareholders.
Mr Harry
Anagnostaras-Adams, Managing Director of EMED Mining said:
“When we arrived in Andaluc�a, the Rio
Tinto Mine was regarded by most observers as being unlikely to restart because
of the historical disputes. EMED Mining can now report that it is now
clear to most stakeholders that the Rio Tinto
Mine will indeed restart. We remain optimistic that we will satisfy the
remaining conditions precedent that will allow us to exercise the option as the
Andaluc�a authorities become satisfied with our Company’s credentials and
as we demonstrate our clear independence from previous owners.”
Mr Bill
Enrico, Chief Operating Officer of EMED Mining said: “Since
recently moving to Rio Tinto recently I have
inspected the facilities and examined the various independent expert assessment
reports. It is apparent to me that the Rio
Tinto Mine can restart quite easily and quickly. The most important
aspect is to establish the right culture and team for the future. We will
do that as soon as we meet our conditions precedent and obtain the necessary
permits to proceed. Our restart plans are well advanced and we anticipate
production would be expected to commence 6 months after exercising the
option.”
-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
15.5p and market capitalisation has increased from approximately �4 million to
approximately �23 million. 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 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:
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Integrating environmental management into
our business, planning and reporting processes.
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Promoting a strong environmental ethic
throughout the company and the community.
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Complying with, as a minimum, all
applicable local and European Union laws and regulations.
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Communicating with community stakeholders
in a responsible and transparent manner.
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 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.com or www.emed.tv.