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VANE Minerals, Stratex International, Continental Coal, East West Resources and others feature in Fox-Davies Newsflash


Daily Mining Monitor

East West Resources (LON:EWR) has completed the sale of Ambrian Energy GmbH to HGM Energy GmbH.

In this news:

Receives £2.25M cash after costs

AEG was the Group's biofuels trading business

HGM Energy GmbH is a German wholesale oil trader and tank storage operator.

FD Comment:

Having decided to focus on metal trading and expecting to report a loss of ~£1M for FY’12 the Company needed to dispose of non-core and loss making businesses. Following the disposal of Ambrian Asset Management in December, the disposal of AEG (which recorded a pre-tax loss of £0.93M for 1H’12) should free up working capital for its physical base metals trading business. Whether this will be enough remains to be seen and we await details of the Company’s new cost structure.

Eastern Platinum Limited (LON:ELR) announced that following the resumption of operations at the Zandfontein Section of the Crocodile River Mine on February 13 2013, further Section 54 notices have been issued by the Department of Mineral Resources ("DMR").

Drilling operations are continuing. However, blasting and cleaning operations are on hold until such time as certain remedial measures currently being taken have been reviewed by the DMR. A further update will be provided when full operations resume again at Zandfontein.

Stratex International (LON:STI) has released an update on its West African projects.

In this news:


o Dalafin Project– 39km Rotary Air Blast ("RAB") drilling programme to commence shortly at Madina Bafé, the first of five identified gold prospects


o Azrag Exclusive Exploration Licence ("EEL") and Adham Tamat EEL – Initial mapping and soil sampling results expected 1H’13

o Tleimidi EEL - Mapping and soil sampling now underway

o Initial environmental baseline study report on all EELs accepted by the Ministry


o MOU signed with private BH Minerals to explore its 967 sq. km North Suehn gold licence in north-western Liberia

o Stratex West Africa ("SWA") option to earn up to 75% by spending US$1.1m over two years

o Licence-wide stream sediment sampling programme now underway, together with mapping and soil sampling around extensive artisanal gold workings.

FD Comment:

With the Company’s recent cash injection through the sale of the Öksüt gold project in Turkey Stratex is able to take advantage of the weak market conditions and acquire assets cheaply. Using its Addis Ababa (Ethiopia), Ankara (Turkey) and Dakar (Senegal) offices as hubs for regional exploration it can then quickly add value through its experienced use of rapid, low cost exploration techniques. This is what is currently happening in Senegal and Mauritania and the new licenses covered by the MOU in Liberia, which are geologically similar to Aureus Mining's nearby New Liberty project add additional opportunities. As mineral exploration is high risk, the Company believes that by diversifying geographically it increases the chance of success. The danger for a company of this size is that it spreads itself too thinly.

Vane Minerals PLC (LON:VML) announced a production update from its gold and silver operations in Mexico. Total revenue for Q4 was up by 74.0% to US$2,411,318 (Q3 2012: US$1,385,889) and direct production cost reduced by 14.2% for the quarter at $688/oz. Au equivalent or $13.2/oz. Ag equivalent (Q3 2012: $802/oz. Au equivalent or $14.5/oz. Ag equivalent). Production amounted to 1,154 oz. Au and 17,830oz. Ag in Q4 (Q3 2012: 979oz. Au and 19,100oz. Ag). 7,856t of ore was processed during Q4 (Q3 2012: 7,841t) with average grades 6.36g/t Au and 96g/t Ag (Q3 2012: 5.36g/t Au and 105g/t Ag). The average recovery rates were 79.5% Au and 77.7% Ag (Q3 2012: 76.8% Au and 76.5% Ag). 34.9t of concentrate and 38.4kg of precipitates were produced from the Merrill Crowe facility held in inventory at period end (Q3 2012: 62.6t; 38.4kg). All gold and silver were sold unhedged.

Revenues for Q4 were in line with management expectations and are substantially higher than in the prior period. VANE has also adapted the crushing and processing facilities attached to its Merrill Crowe plant to increase its day to day processing capability by 20%, such that it is now able to process up to 3,000t per month and expects production volumes to grow accordingly.

Continental Coal Limited (ASX:CCC) announced an update on the ramp up in mine production and development activities at the Company’s third operating coal mine, the Penumbra Coal Mine, and an update on operating performance at the Company’s Vlakvarkfontein and Ferreira Coal Mines and Delta Processing Operations in South Africa. At the Penumbra mine, ROM production has increased over the month of January 2013 as more coal panels have been developed, as greater underground operating flexibility has been achieved and as the focus underground has progressively moved towards production in the first of the two underground continuous miner sections. ROM production in January 2013 was 14,031t, compared to 2,694t in the previous month and representing over a +400% increase. ROM coal has been processed through the Delta Processing Operations and primary export yields of 37.2% have been achieved in January 2013, a significant improvement of primary export yields of 26.2% achieved in December 2012. Primary export yields of 67% are forecast to be achieved once the Penumbra Mine has achieved steady state operating levels by June 2013. Export sales from the Penumbra Coal Mine have continued over the month and in January 2013 totalled 5,212t, compared to 854t in the previous month. Export thermal coal sales have been made directly from the Company’s Anthra Rail Siding, through its own rail and port allocations from the Richards Bay Coal Terminal and sold into the export market under existing off-take agreements.

The Company is currently in the process of preparing to commence commissioning of the second Joy 14HM15 Continuous Miner underground in the second section. Production from the second section is forecast to commence by the end of February 2013 and will lead to a further increase in ROM production. Underground ROM production for February 2013 is forecast to be 20,000-25,000t, with production of 35,000-40,000t in March 2013 with both Continuous Miners in operation. Monthly budgeted ROM production of approx. 63,000t is forecast by June 2013.

Mine operations at the Ferreira Coal Mine have continued to perform strongly in January 2013 following on from the establishment of the new opencast mining operations in the adjacent and adjoining Prospecting Rights in the December 2012 quarter. In January 2013, ROM coal production of 56,886t was achieved, +20% above budget and 12% above the average monthly ROM production achieved in the December 2012 quarter. ROM coal production for January 2013, once again exceeded budget and exceeded the ramp up production profile. Year to date total FOR costs have continued to remain below budget and have averaged ZAR563/sales tonne (approx. A$63/t and 12% below budget).

The Vlakvarkfontein Coal Mine has continued its performance in 2013 with ROM production in January of 103,751t in line with the average monthly ROM production achieved in the December 2012 quarter. Total thermal coal sales of 111,992t exceeded budget, with 96,172t for Eskom and 15,820t of non-select coal sales. The Vlakvarkfontein Coal Mine is still forecast to exceed budgeted ROM production and thermal coal sales for FY2013. Year to date mining costs at the Vlakvarkfontein Coal have averaged ZAR78/t ROM (approx. 22% below budget). Total FOT costs year to date have averaged ZAR126/sales tonne (approx. 10% below budget). Average sales price received year to date was ZAR181/t.

Quick facts: Archer Daniels Midland

Price: 44.3 USD

Market: NYSE
Market Cap: $24.66 billion

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