Big picture - Why invest in Amur Minerals Corporation
Amur Minerals Corporation Snapshot
Corporate Mission Statement
Our Corporate Mission is comprised of three definitive categories:
- detailed infill exploration;
- a transformation from exploration to production;
- maximisation of shareholder value.
The Board is initially focused on detailed infill exploration, within the Company’s Detailed Exploration and Production Licence area. By drilling to expand the reserve base, compiling the necessary engineering studies and providing optimised designs to the standards of a Bankable Study, we will continue to derisk the project. All work is being conducted to international technical and environmental standards appropriate for financing of a large scale project that will be both profitable and competitive with its peer group.
Secondly, and concurrent with the first objective, the Board aims to transform the Company from exploration to production. Having successfully obtained the Detailed Exploration and Production Licence for the project from the Russian Federation agencies, work will focus on determination of the optimal operation best suited to beneficiate the metal of Kun-Manie. Through the optimisation process, we will identify the specific project requirements and funding requirements to develop and operate one of the largest nickel copper sulphide deposits in the world.
As a public listed company on The London Stock Exchange, and as we progress through the pre-production assessment phase, all efforts will be made to maximise shareholder value.
In 2004, the Company acquired the 950 km2 Kun-Manie exploration licence 700 km northeast of the capital city of Blagoveshchensk located on the Chinese border. The area was selected based on historical Soviet era data which indicated the potential presence of sulphide nickel and copper. The dominant geological feature of Kun-Manie is the Kun-Manie Massif, a metagabbro-anorthosite intrusive of Early Archean age which hosts a series of mafic and ultramafic flat lying to steeply dipping sills and dykes, some of which contain economic amounts of sulphide nickel, copper, cobalt, platinum, palladium, gold and silver.
Licence-wide exploration over the past decade identified the presence of a 40 kilometre long by 2 kilometre wide structure called the Kurumkon Trend. This Trend hosts the primary occurrences of sulphide nickel and copper, thereby making it the primary exploration and production target of the Company. Exploration has identified multiple sills containing nickel-bearing pentlandite, pyrrhotite and copper-bearing chalcopyrite in disseminated and veinlet form.
Company reconnaisance and ground based geophysics, geological mapping and sampling and more than 35 kilometres of diamond core drilling has confirmed the presence of a minimum of five deposits spaced along a 20 kilometre segment of the Trend. SRK Consulting (UK) Ltd has compiled a JORC resource estimate for all five drilled deposits reporting the presence of more than 120 million tonnes of mineralisation averaging 0.54% nickel and 0.15% copper. This equates to 650,600 tonnes of nickel and 178,400 tonnes of copper. By-product contained platinum totaling 16.9 tonnes and palladium totaling 18.0 tonnes are also estimated to be present. The limits of the drilled deposits have not yet been identified, leaving substantial upside potential for the discovery of additional mineralisation resulting in further expansion of the resource inventory.
Over the years, the Company completed numerous engineering and technical studies including a Pre-Feasibility Study (PFS) by SRK Consulting (Russia) Ltd. The 2007 PFS confirmed that the project area contained sufficient mineable mineralisation that is recoverable using conventional sulphide flotation methods, and that the resultant concentrate is suitable for smelting. The PFS projected a positive cash flow and contained recommendations for additional work intended to reduce the technical risk and to optimise the project.
During 2014 and early 2015, the Company internally updated the PFS to reflect information acquired since 2007 and also updated operating and capital costs to Q1 2015 to reflect inflation and currency fluctuations since the issuance of the PFS. Completed to the standard of a PFS, the Company has generated internal product that is identified as a Preliminary Economic Assessment (PEA). This PEA has resulted in the development of a Blueprint to production, an important plan for the Company which is presented below. The PEA will be audited by an external qualified expert mining consultancy allowing for reporting of the audited PEA results as that of a PFS.
The Company has completed a Temporary Conditions TEO and has obtained a certified reserve endorsed by the the State Committee on Reserves (GKZ) and now holds the Certificate of Discovery issued in 2009. The Certificate of Discovery grants the Company the first right of refusal on the discovered mineral. The decade of exploration has identified a specific area of interest totaling approximately 36 square kilometres (shown below, including a conceptual layout of the proposed operation) for which the Company applied for and has obtained a “Detailed Exploration and Production Licence” in Q2 2015. The production licence covers a 20 year period ending 1 July 2035 and can be extended should additional economic mineralisation be identified.
Preliminary Economic Assessment and the Blueprint
Based on an SRK Consulting LTD Pre-Feasibility Study (“PFS”) dated 2007 and its recommendations, the Company undertook substantial exploration and engineering work on the Kun-Manie project. Since 2007, the resource base has been more than doubled and metallurgical test work has indicated that the recovery of all contained metal can be improved.
Utillising the more recently acquired information, management and the Company staff compiled an internal study updating the 2007 PFS. From this study, a long term visionary plan (Operational Blueprint) of the operation suited to the 20 year Production Licence was derived. Optimisation and trade off studies lead to the development of the Blueprint wherein an optimised conceptual design was identified providing for a fully integrated production plan.
The PEA has established the Operational Blueprint for the Kun-Manie nickel – copper sulphide project. The indicated scale of the project supports the conclusions that it will be a substantial producer, placing the Company among some of the world’s larger nickel miners. The integrated Operational Blueprint for Kun-Manie includes the following:
Power for the site will be generated using diesel fuelled generators, typical of remote Russian operations. The capital cost for site-generated power is substantially less than that required to construct a 360 kilometre long power line.
Potential Configuration of Power Plant
To support the site, a 320 kilometre long access road will be designed and constructed to handle two-way traffic on a year round basis.
Preliminary Access Road Route
Example of a Level 3 Road
Based on the existing resource inventory at Kun-Manie, the resource is capable of supporting a nominal annual throughput of six million tonnes of ore for 15 years. Infill drilling of Inferred resources is required for those resources that are presently considered to be within the mine plan. Later, the Company has the opportunity to add additional resources by step out drilling into highly prospective ground. Mine production will be undertaken using both open pit and underground mining methods. Open pit ores will be derived from four of the five deposits, whilst underground production will be obtained from areas lateral two of the pits. Ore will be transported by truck to the processing plant.
Photo of Open Pit Design Concept
Room and Pillar Underground Mining Concept
The process plant and tailings impoundment areas are centrally located allowing for optimised ore transport from the four mine sources along the Kurumkon Trend. The 6.0 million tonne of ore per year plant site is located in an area where there is storage for the tailings.
The process plant will treat six million tonnes of ore per annum (18,000 tonnes per day). Metallurgical test work indicates that metal recoveries will be improved over previously estimated recoveries, and independent work has confirmed that a single simple concentrate can be generated by classic and proven flotation technology. The concentrate is also suitable for smelting at either a toll smelter or its own captive smelter.
Process Plant Flowsheet
The concentrate will be truck transported to the Baikal Amur rail line (“BAM”) where supplies and fuel will be delivered by rail for backhaul to the mine.
External smelting specialists have examined the proposed composition of the concentrate to be generated by the processing plant and determined that it is suitable for smelting on a toll or owner operated basis. Preliminary capital cost estimates have been provided and a smelting cost per tonne of concentrate determined. Trade off studies indicate that the greater financial benefit to the Company is generated by owning and operating its own smelter rather than shipping to a toll smelter. The preferred smelter location is immediately adjacent the BAM rail line where coal and limestone can be delivered to support smelting of the concentrate.
Conceptual Smelter Design
More information avaliable here
Robert Schafer, Chairman (Non-Executive)
Mr Schafer has 29 years of experience in the mineral industry, working in the international sector with both major and junior mining companies. He is currently Vice-President, Business Development with Hunter Dickinson Inc., a globally active private natural resources corporation. Throughout his career Mr Schafer has worked internationally, with notable experience in the far east of Russia, Southern Africa, South America and Australia. His work has included the structuring and implementation of successful exploration strategies, project reviews and valuations leading to acquisitions, and the management of local and expatriate exploration teams operating in a wide variety of geologic environments.
Robin Young, Chief Executive Officer
Mr Young is a geologist and mining engineer who has worked extensively in the CIS since 1991. He has 30 years of experience in the mineral resources industry overall, which has included large projects in remote areas as well as significant work with junior mining companies. He has held positions of increasing responsibility within the exploration, development and production sectors. Since 1980, he has been involved in the international sector and has been the Chief Executive Officer of two geological and mining consultancy companies. He has been CEO of the Company since October 2004. Mr. Young is a licensed Professional Geologist and holds a Bachelor of Science degree in Geological Engineering.
Brian Savage, Non-Executive Director
Mr Savage is a founder of Frontier Mining Limited and served as a Director since that company’s formation in August 1998, acting as Chief Executive Officer between 2001 and 2009. He has 20 years’ experience in all aspects of the mining industry, having held senior positions in the Bank of New York, Sharps Pixley and the Bank of Montreal. In 1996, he become President of Earth Search Sciences Inc (ESSI), a remote sensing company with applications in the mining industry, playing a major role in the Remote Sensing Mission to Kazakhstan (sponsored by the U.S. Government) and formed several joint venture companies in Kazakhstan. Mr Savage left ESSI in 1998 and formed Frontier, having acquired the relevant data and local rights to the ESSI findings. He has a BSc in Mining Engineering and an MSc in Mineral Economics from the Colorado School of Mines.
Paul Gazzard, Non-Executive Director
Paul, who has acted as an external adviser to Amur for four years, joins the Board with over 10 years of experience working across large institutions in the City of London in his role as a Fund Manager.
Paul McKay, Chief Financial Officer
Mr. McKay is a fellow of the Association of Chartered Accountants (ACCA) and has over 25 years of experience providing financial expertise to a number of industries in areas of banking, accounting, taxation, corporate structuring and corporate finance. Having been involved with mining companies since 1997, overseeing financial and legal issues for exploration and production projects in Africa and the CIS, Mr. McKay joined Amur Minerals in 2011.
Randolph Lewis, President of Russian Operations
Mr. Lewis has led Western businesses in Russia and the CIS for much of the past two decades. He graduated with a degree in Russian Studies from Washington and Lee University in Virginia in 1995 and also studied international business at St Louis University. His experience in Russia dates to 1993. Mr Lewis speaks Russian, and has developed strategy, operations, and government relations in the mining, construction and finance sectors. Prior to Amur Minerals, he served as Managing Director of Silver Bear Resources from 2007-2014.
P.O. Box 173
British Virgin Islands
Nominated Adviser and Broker
S. P. Angel Corporate Finance LLP
Prince Fredrick House
35 - 39 Maddox Street
Chartered Accountants and Registered Auditors
55 Baker Street
London W1U 7EU
Yellow Jersey PR Limited
76 Great Suffolk Street
Solicitors to the Company
(England and Wales)
Field Fisher Waterhouse LLP
35 Vine Street
London EC3N 2AA
Legal Advisers to the Company
(British Virgin Islands)
Maples and Calder
PO Box 173
Sea Meadow House
British Virgin Islands
Legal Advisers to the Company
Norton Rose Fulbright (Central Europe) LLP
White Square Office Center
Butyrsky Val St. 10, Bldg. A