AIM:
EMED
21
November 2007
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 ult��mate 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
|
|
|
This
announcement is available on www.emed-mining.com
and also by clicking on the link below:
Thank
you for your interest in EMED MIning. Visit www.emed-mining.com for
further information.