EMED Mining Public Limited, the Europe-based minerals development and exploration company, is pleased to announce an operations update for the three months ended 30 September 2014.
- £13.1m successfully raised via a subscription agreement with cornerstone investors
- Expanded workforce in place with over 220 people mobilized and working on site
- Potential start-up capital expenditure reductions of US$50M targeted as part of ongoing review
- Key components of process plant and infrastructure undergoing refurbishment
- Progress made on instrumentation and electrical engineering
- Continued drilling to optimise first five years of production
- Mine contractor appointed
- Final permitting remains on track with the Mining Permit expected to be received before year end
Isaac Querub, CEO of EMED Mining commented: “This was an exceptionally productive period for the Company and the rapid scale up of operations and strengthening of key relationships sets us well on the way to achieving production as planned. I am delighted with the development and continued progress in obtaining the mining permit and final restoration plan and we remain confident that we will receive the final permits before year end. I would very much like to thank our growing team and look forward to providing further updates.”
During the quarter the Company continued onsite preparations at the Rio Tinto Copper Project (“Proyecto Riotinto”) focusing on ensuring that process plant and infrastructure refurbishment and development continued at pace ahead of the scheduled restart of the mine, which management believes can now be achieved in Q4 2015.
As such, the Company further strengthened its workforce and supply chain while management continued to work closely with the Junta ahead of receiving final permitting, which as previously announced, is expected later this year.
The Company now has over 220 people mobilized and fully working on site including EMED personnel and local contractors. The expanding workforce, which now includes key supervisory personnel and operational crews, has particularly focused efforts on the process plant and project infrastructure disciplines initially identified as part of the critical path programme. Significant progress has been achieved in instrumentation engineering with orders placed for the supervisory control and data acquisition (“SCADA”) system in early August 2014. Similarly electrical engineering is progressing – with all high voltage switchgear and most of the low voltage switchgear ordered and in a well-advanced stage of fabrication.
From the mechanical point of view, key components of the process plant and infrastructure – including crushing, screening, milling and flotation areas, are currently undergoing inspection and refurbishment. Particular attention is being paid to milling and flotation areas where specialist contractors are refurbishing the facilities. Additionally all brand-new long lead items such as primary screen, cyclone clusters, concentrate thickener and filter presses have been ordered. The procurement programme is now concentrated on items of shorter delivery time.
Mining is also progressing as planned with a mining contractor already appointed and mining fleet pre-ordered. Auxiliary services to the mining operation such as explosives and diesel are being discussed with suppliers.
Project Capital Expenditure Review
The management team is close to finalizing a comprehensive review of the operating plan and capital expenditure budget with the aim of optimizing capital expenditure and production rates. This is an on-going and iterative process which has so far identified potential capex savings for Phase 1 in the order of US$50M.
The savings arise mainly from a better definition of the scope of works of Phase 1 in the form of a combination of refurbishment of essential equipment only required for Phase 1, fixed and firm quotations provided by engineering and equipment suppliers, delaying non-essential expenditures, better understanding of working capital requirements and experience already gained from the refurbishment work to date. The Phase 1 throughput rate will be 5Mtpa and management is assessing a range of options for the development of Phase 2 to increase throughput up to 15Mt of ore per year.
Phase 1 is now progressing well into full implementation with a clear focus specifically on sections of the process plant that were built and last operated when the project was in full production.
As announced in April the Company has received its Unified Environmental Authorisation and the transfer of the mining rights for Proyecto Riotinto. These are the key permits required to enable the Company to commence construction at the mine.
Proyecto Riotinto has also advanced closer to completing the permitting process which is now only subject to approval of the Final Restoration Plan and granting of the Mining Permit. The Final Restoration Plan was officially submitted on 23 July 2014 and has since gone through public consultation. Approval of the Final Restoration Plan is expected within the coming weeks. Application for the Mining Permit was completed by EMED on 01 October 2014.
The Company maintains a regular dialogue with local and regional authorities and remains confident that it will receive the Mining Permit before year end at which point the Company will be fully permitted to enable full scale mining operations to recommence.
Drilling started at Proyecto Riotinto at the end of July 2014 and two drilling contractors and three drill rigs are currently operating on site. During the period some 720m were drilled for metallurgical testing purposes while a 7,500m resource infill program is in progress with approximately 1,050m already drilled to date. Additionally a geotechnical campaign of 1,200m is underway with some 130m already drilled.
Metallurgical test-works were initiated at the end of August 2014 and are expected to confirm and improve historical information in terms of processing indicators, reagents selection and concentrate quality. The resource infill drilling programme is aimed at improving the geological and resource model in the area that will be mined in the initial five years of production.
The Company successfully completed a £13.1 million subscription by two existing cornerstone investors, Orion Mine Finance (14.44% shareholding) and Yanggu Xiangguang Copper Co. Ltd (14.30% shareholding). In addition, EMED now has a third significant shareholder with the on market acquisition by Trafigura Beheer B.V. through its wholly owned subsidiary Urion Holdings (Malta) Limited of a 17.99% shareholding.
As announced on 15 August 2014, the funds raised are being used for general working capital purposes and to continue activities on site, including continuing with final permitting and drilling activities at Proyecto Riotinto. It is anticipated that the proceeds of the fundraising will finance the Company up to the end of 2014 which, the Directors believe, will enable the Company to optimize financing plans for Proyecto Riotinto. The Company continues to evaluate all financing options, including raising new equity or debt, and discussions with key parties are ongoing in order to finalise the Phase 1 funding in the December quarter.
The Company's focus is firmly on achieving restart as soon as possible.
Continued development as operations scale up can be viewed on the Company’s website at its photo gallery (http://www.emed-mining.com/projects/photos/spain), which will be updated on a regular basis.
EMED Mining Isaac Querub/Alberto Lavandeira/John Leach +34 959 59 28 50
Canaccord Genuity Neil Elliot/Mark Palmer +44 207 523 8000
Fox-Davies Capital Oliver Stansfield +44 203 463 5061
Walbrook PR Nick Rome +44 207 933 8783
For further information on the Company's activities, visit www.emed-mining.com.
This press release contains “forward looking information” which may include, but is not limited to, statements with respect to the anticipated results of operations of the Company including potential reductions in the capital cost estimates of the Proyecto Riotinto, potential increases in the project’s throughput capacity and anticipated timing for the receipt of necessary permits. There is no assurance that any such anticipated results will be realized or achieved. “Forward looking information” may also include statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, the future price of metals, the estimation of ore reserves and resources, the conversion of estimated resources into reserves, the realisation of ore reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward looking statements can be identified by the use of words such as “potential”, “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Accordingly, readers should not place undue reliance on forward looking statements.
Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; the future costs of capital to the Company; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, terrorist attacks, insurrection or war; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in the Company’s annual information form.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward looking statements contained herein are made as of the date of this announcement and the Company disclaims any obligation to update any forward looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.