EMED Mining (AIM: EMED) updated investors on its activities over the past quarter, to the end of September 2009. The European focused copper and gold exploration and development company said that the mining industry had continued to recover over recent months and as a result EMED’s projects have an increased economic importance in their respective regions.
It is EMED’s goal to develop a multi-mine group across several jurisdictions from the operations base in Spain.
Since becoming a publicly listed company in 2005, EMED Mining has achieved 100%-ownership of two major projects, the ‘Proyecto Rio Tinto’ in Spain and the Detva Gold Project in Slovakia. EMED also has earlier-stage activities in Cyprus and, via an equity stake in KEFI Minerals (AIM: KEFI), in Turkey and Saudi Arabia.
At the Proyecto Rio Tinto Copper mine in Spain, support was given in-principal by the Junta de Andalucia (Local Government) for the Company's proposals and all local community municipalities have formally declared their support for the project and the Company.
Subject to a number of pending environmental, regulatory and financier approvals, EMED have targeted commissioning production by the end of 2010. EMED are expecting the approval of the Environmental Impact Assessment in Q1 2010. Also the administrative approval of the transmission of mineral rights remains an important formal step and there are some important procedural issues still being resolved in relation to this matter.
Prevailing metal prices continue to support the projects development, Copper prices have more than doubled since the beginning of the year to over $6,000 per tonne. At these copper prices, EMED project net operating cash flow to average €67 million per year under the current development plan.
In Slovakia, EMED’s Detva Gold Project has made considerable progress in the quarter. AMC Consultants recently completed the Biely Vrch Scoping Study. The scoping study indicated that the development of a ten year, 3 million tonnes per annum (‘tpa’), mining operation producing 60,000 ounces of gold was economically attractive based on the current gold prices, cost estimates and the project’s technical parameters.
Following the scoping study a number of analyst reports upgraded the stock, with Edison Investment Research stating that the company is still undervalued despite its dramatic share price rise, which saw the stock gain over 100% in the last year. Fox-Davies Capital also had a positive outlook for the stock with a ‘buy’ rating for the mine developer and a 45 pence per share target price.
Biely Vrch currently hosts a JORC compliant indicated and inferred resource of 41.7 million tonnes at 0.79 grams per tonne for a total 1.1 million ounces of gold.
The company is now planning to select and procure sites for mine infrastructure, resolve the rate of government royalty and agree on the timetable and conditions of permitting. Once progress is made, reserve drill-out and engineered required for a definitive feasibility study will commence, leading to the planned development in 2012.
At the Detva Gold project, EMED has progress further exploration work, with many more porphyry gold systems being identified. Five of these systems are currently being focused on, including Pstrusa, Zupkov, Jakalovci, Strbov Stal and Prencov.
EMED expect the results of the 2009 regional porphyry gold exploration program to be reported by the end of the year. Further drilling is planned for Pstrusa and Beluj during 2009, both of which are interpreted as larger mineralised systems than that which EMED Mining discovered at Biely Vrch.
EMED Mining Managing Director, Harry Anagnostaras commented on the company’s ongoing growth and development:
"In Spain we are working with the authorities to facilitate the start-up of production at the Rio Tinto Mine by the end of 2010. The due diligence is taking longer than we anticipated but the intention of the Andalucian Government has been made clear ... In Slovakia we have commenced preparing permit applications for development of the Biely Vrch Gold Deposit in 2012 ... Both projects have expansion potential. We are focused on developing both of them to their optimum in full compliance with European Union and Company environmental and mining policies.”