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Amur Minerals' agreement expands funding options

Amur will talk to the agency, set up by President Vladimir Putin, about the possible federal funding for the mine, plant and smelter.
Amur Minerals' agreement expands funding options
Amur will talk to the agency, set up by President Vladimir Putin, about the possible federal funding for the mine, plant and smelter.

Shares in Amur Minerals (LON:AMC) jumped 30% after it said it had has signed an outline agreement with the Russian government's Far East and Baikal Region Development Fund.

The “non-binding heads of terms” could expand the financing options for its flagship Kun-Manie nickel sulphide project in the east of the country.

The stock jumped 2.02p a share to 8.65p, valuing the London-listed business at just shy of £40mln.

The company is already talking to strategic partners in Russia, China and India, which it said remained the “cornerstone” of its strategy to develop a mine.

However, Amur will talk to the agency, set up by President Vladimir Putin, about the possible federal funding for the mine, plant and smelter.

There are some big ticket items that will come as part of the Kun-Manie programme.

They include a 320km road from the Baikal Amur railhead at Verkhnezeisk to the site and an extension of an existing power line to the smelting facilities.


“The agreement provides a launching point for detailed negotiations establishing technical feasibility requirements, funding needs, terms and conditions, and timelines,” the London-listed group said in statement.

Alexei Chekunkov, chief executive of Far East and Baikal Region Development Fund, believes the creation of a mining cluster based around the Amur deposit will give “a significant lift to the regional economy, tax revenue and will create thousands of jobs”.

“It is important that, along with the socio-economic effects for the Russian Far East, we are creating a quality, globally competitive asset,” he added.

“The current state of the resource markets is such that now is the right time for investing in such effective, world-class resource projects."

Amur chief executive Robin Young echoed those comments, saying the development smelting facilities at Kun-Manie could have a “substantial positive impact on the social and economic well-being of the far east of Russia”.

“This could well lead to the development of an industrial hub wherein Amur Minerals would have a leading role. Amur and the Fund will endeavour to agree binding terms providing for developing a federal funding plan to defray the cost of infrastructure development," he added.


Kun-Manie is a sulphide nickel and copper project located in Amur Oblast, in Russia’s far east.

It has JORC resources in excess of 830,000 nickel equivalent tonnes.

This places it among the 20 largest nickel copper sulphide projects in the world with substantial potential to further expand the resource immediately adjacent to the drill identified deposits of which there are five.

The project also contains the by-product metals of copper, cobalt, platinum, palladium, gold and silver.

Geographically, it has the potential to supply the three largest nickel consuming markets in the world including China, Japan and South Korea.


Amur is currently mobilising rigs for a 15,000 metre drilling campaign to take place across its Kun-Manie nickel project beginning in June.

To that end, the company will shortly take delivery of 240 tonnes of fuel, two D9R dozers, a 329D excavator, a dump truck, a personnel carrier, a fuel truck and factory spares.

Already at or close to site are the drill rig, a 25 tonne crane, and two generators.

While all that’s going on, in the office management will be going over various reports from mining consultants SRK, to work out where to focus the drilling.

The firm has a new resource update that’s being compiled right now. The goal will be to drill out a deposit that’s going to be a start-up deposit.

Favourite at this stage is Flangovy-Maly Kurumkon, principally because it has the greater resource at the moment, but the company also has other good-looking areas of mineralisation on the ground, notably at Kubuk, that may yet come to the fore.

The drilling will also be factored into the ongoing feasibility study that’s due for completion in about two years’ time.

It’s too early to speculate in detail what that study will ultimately look like, but there will be three key areas on which Amur will focus.

The first is infrastructure costs, principally the road into Kun-Manie itself. On that score, the recent devaluation of the rouble has had a very helpful effect on estimates.

The second is the need for the company to put together a representative bulk sample of ore that it can really test and get the measure of ahead of full construction.

And the third is that there needs to be detailed study and costings for the proposed 15 kilometre power line to the smelter site.

There’ll be updates on all those aspects along the way, as one way or another it looks like Amur is going to have plenty.


Shore Capital…

To re-cap, in August 2015, an initial ‘financial advisory agreement’ was signed with the aim of seeking financing from within the Russian Federation, and from India and China. We saw this as a prudent move given current political tensions between Russia and the West.

Amur clarified today that the Fund itself typically participates in infrastructure-related sectors, such as the required 320km road from the railhead to the proposed mine site.

Today’s agreement sees the federal funding scope expanded to review and potentially include the prospect of deferral financing of the overall mine, plant and smelter development, as well as infrastructure.

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March 07 2017
An upgrade in February boosted the total nickel resource at Kun-Manie to 101.3mln ore tonnes at a grade of 1.03%, which equates to 1.04mln tonnes with a value of US$10.5bn at current prices.

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