Amur Minerals’ Robin Young highlights steady progress at Kun Manie nickel project

Amur Minerals (LON:AMC) is making steady progress with the development of the Kun Manie nickel project in Russia.

At the moment the group’s main focus is an ongoing exploration programme. Indeed Amur recently carried out a significant phase of exploration work - using geophysics and geochemical (G&G) work, soil sampling and verification assaying - in preparation for metallurgical testing and basic engineering studies.

The first batch of samples is now at a lab in Moscow and the results are expected in ‘the very near future’, according to managing director Robin Young.

Meanwhile, as part of a separate target delineation programme, exploration work continues and it will be followed up with drilling next year.

“Looking forward, we expect to complete the current exploration programme this year, which will also include some trenching. We'll also put in access roads and carry out drill pad construction for next year’s drilling programme,” Young told Proactive Investors.

“All the work we're doing right now can give us an indication of where additional resources may exist.

“That information will then be used for next year's extensive drill programme. It is all about finding new exploration targets, meanwhile we are using infill data to boost the understanding and confidence in the existing resource estimates.”

Young explained that recently completed in-fill drilling work is expected to lead to resource upgrade in the near-term. But this is likely to improve the confidence in existing resources rather than providing an up-lift in resource tonnage.

However a more sizable upgrade is expected following next year’s drill programme. “I can't quote hard fast numbers, obviously, but we're looking for a substantial increase in resources, and also reserves, as a result of the target delineation program and the subsequent drill programme next year,” Young added.

“So next year we're expecting a substantial increase in resources when all this work is complete.”

Another key milestone in the near term will be the optimisation studies, which will be based on this year’s exploration work and the subsequent metallurgical testing. “This will help us better define the process that we'll use to extract the metal,” he said. “That will be very important to us."

“The higher concentrate grade we can get, the lower the cost per pound of nickel we can generate. As soon as we can get the confirmatory analytical results back, then we'll be submitting the data on to the labs to get the next phase underway.”

While all this exploration and preliminary mine development work is underway, Young and his team are also busily navigating the highly bureaucratic permitting process in Russia, so that everything is present and correct when the time comes to start mine development work.

Amur’s mining licence application is currently under review by the Ministry of Economic Development in Russia. The granting of the mining licence will be a big step forward in de-risking the Kun Manie project and as such it is likely to provide a boost to the group’s shares.

"We are proactively pushing to get the Russian authorities to get this project moving, but we are dealing with governmental bodies,” Young said.

Explaining the permitting process, Young highlighted that first Rosnedra - the Russian geological authority - does a 'first pass' review of the application and if there are any ‘fatal flaws’ at that stage the application is sent back and the company has to make changes. Amur passed this initial review and no changes were requested.

Following the initial review the application is passed through to four different administrative agencies within the Russian government - the Russian ministry of defence, the anti-monopoly board, the intelligence and security agency and then, last of all, the ministry of economic development.

"Each one of the agencies has an input in the licence application. They provide feedback to Rosnedra and once all four agencies have completed their respective assessments, Rosnedra completes a final review of the application and compiles the terms of the licence.

"Rosnedra have received the input from the first three agencies and we're waiting for the ministry of economic development. Rosndera have the written reports from these departments but they will remain confidential until all four supporting agencies have responded and Rosnedra has made its assessment.”

“The ministry of economic development are continuing their work on this evaluation. When they're done the application gets passed along to Rosnedra then it is up to them (Rosnedra) to put together the draft mining licence, including the terms and conditions.

“And all that will happen in the future, but we are dealing with Russian governmental agencies which are bureaucratic in nature, not dissimilar from the other countries where I have previously worked.”

Amur’s shares, like much of the junior market, have been under pressure of late. On AIM the shares have almost halved in value since the peak of 21p at the start of this year. But according to Young there are a number of potential catalysts that may help the stock buck the downward trend.

“The approval of the mining licence will be an obvious turning point for the share price,” he said. “The other important points of interest, for investors, will be the metallurgical studies.

“As well as that, an increase of resource and reserve potential is another catalyst, which will ultimately allow us to start work on our ‘bankable’ studies that will bring us to the point where we can initiate syndicated financing and subsequently start building the mine.”