Daily MIning Monitor
In this news:
• The comprehensive review of historical and geological data on the project has now been completed and initial drill targets have been identified
• Three year work programme has been submitted to and approved by the Mines Department of Salamanca ("Mines Department")
• Environmental baseline work has been completed. No material environmental concerns relevant to mining development of the project were identified by the Company's environmental consultants
• Initial sampling of outcrops, stream sediment and dump material at Morille have all indicated the presence of tungsten mineralisation
• Preliminary JV and partnering discussions under way to fund proposed drill programme of 8,000-10,000 metres at the site of the old Alegría mine.
This is a positive update from Aurum. With the initial three year work programme approved by the Mines Department and all licences have been satisfactorily renewed to reflect Aurum's ownership since their acquisition in September, the Company can now start working on the project. However, given the large acreage and the Company’s capital constraints due to its ongoing commitments to the JV with Ormonde on the de Oro, Peralonso and Cabeza gold projects it will look to JV the development of Morille.
In this news:
• Run of Mine ('ROM') thermal coal production was 19,352t up 81% month-on-month as ramp up to steady state production by June 2013 remains on track
• Monthly underground production in February 2013 was 27,311t up 93% MoM and exceeded previous forecasts
• Second Joy 14HM15 Continuous Miner successfully commissioned underground and in full operation in February 2013
• Underground production of 35kt – 45kt forecast for March 2013 with both Continuous Miners in full operation.
• ROM production for June 63kt ramping up to 3Q’13 average of 75-80kt pm ROM
• Primary export yields 47.2% in February 2013 up from 37.2% in January and forecast to reach 67% in June
• Export thermal coal sales up 75% to 9,131t in February from 5,212t
• All mine construction activities to be completed by April 2013 and funded from the drawings under the ABSA Capital Debt Facilities
• No costs given, but forecast forecast average total FOB costs of ZAR490/t (May 2011 terms), approx. USD$57/t
• ROM production in February of 63,456t, 37% above budget
• ROM production for Mar’Q forecast above budget at 170kt
• YTD total FOR costs remain below budget at average ZAR556/sales tonne
• ROM production in February of 143,872t, 31% above budget
• Total thermal coal sales above budget and 25% up MoM at 140,244t of which 113,487t to Eskom and 26,757t of non-select coal sales
• Mining costs YTD averaged 20% below budget at ZAR80/t ROM with total FOT costs averaging 10% below budget at ZAR134/sales tonne
• Average sales price received YTD was ZAR193/t.
This was a very positive RMS from CCL with the Penumbra ramp up on track for June and Ferreira and Vlakvarkfontein both ahead of budget. Improving recoveries will be key during the later stages of the ramp up as will costs, but with RB1 export prices currently around US$83.6/t (ZAR780/t) and 664.5kt of coal hedged at an average of ZAR1,057/t the Compnay has sufficient headroom.
In this news:
• Revenue of US$120.6M from sales of 1.3Mwmt of iron ore concentrate from Marampa
• Group EBITDA loss reduced by US$22.2M to US$ 14.2M (FY’11 -US$ 36.4M) with US$ 20.4M profit contribution from Marampa operations
• US$66.3M net provision on Colombian assets following strategic review; an active programme to sell the business has been initiated
• US$247.7M net cash inflow from financing, including US$108.9M from BlackRock royalty transaction
• US$192.0M net cash outflow from investing activities, primarily on Marampa expansion
• Strong balance sheet to complete expansion to 5Mtpa; cash at 31 December 2012 was US$ 92.7M
Marampa, Sierra Leone (100% owned)
• Production target of 1.5Mdmt achieved for 2012 at operating costs of US$ 77/dmt
• Sales of 1.3Mwmt in 2012 with stockpile to be reduced to operating levels over H1 2013
• Engineering commenced on 5Mtpa extension (base case)
• Growth option studies undertaken with completion of bankable feasibility study for potential expansion to 9Mtpa
• New Mining Licence Agreement ratified in April 2012 setting out stable 10 year fiscal platform for growth
• Bankable Feasibility Study completed in April for 15Mtpa operation at Isua, Greenland
• Exit from Colombia is in line with our strategy to focus our resources on our core iron ore assets
Post period highlights
• Pride of Marampa operational and loading of ungeared vessels to commence at the beginning of Q2 2013
• Second plant commissioning complete and producing concentrate
• Expansion to 5Mtpa run rate on track for end of 2013
• Production guidance of 3.3Mt to 3.6Mdmt and sales of 3.6 to 3.8Mdmt for 2013
• ROM stockpile and other wet season mitigation measures in place.
• Forecasted capital expenditure for 5Mtpa operation increased from US$ 320m at HY to US$ 340m
• Operating costs expected to fall to US$ 50/t at 5Mtpa run rate
• Restructure and increase of US$ 90M corporate debt facility to US$ 165m with Standard Chartered, Rand Merchant Bank and Ecobank
• Draw down of facility expected in Q2 2013 enabling consolidation of existing secured and unsecured loans.
Production from Marampa is on track, although there was an impact from the wet season with 1.5 Mdmt last year and sales of 1.3Mdmt providing a positive contribution and reducing the net loss by US$22M. Production is forecast to double next year to 3.3Mt to 3.6Mdmt with sales of 3.6 to 3.8Mdmt for 2013 and reach a run rate of 5mtpa by year end. Capex guidance has risen by US$20M, but importantly operating costs should be around US$50/t by year end. This is significant as we expect prices to weaken and be highly volatile going forward. The increase in debt facilities by US$90m gives the company enough headroom to complete the 5mtpa expansion. The US$66.2M write down of the coal assets in Columbia is unsurprising as with so much going on, the Company doesn’t have the resources it needs to commit to its other projects which are challenging in their own right.
In this news:
• Finance Director, Tony Philip, has resigned to pursue other opportunities.
• Tony Everitt has been appointed interim Finance Manager and Company Secretary with immediate effect.
It is never a good sign when an FD resigns with no replacement lined up, but Tony Everitt, an independent accountant has been providing his services to Oracle since 2005 should know the Company well enough until a permanent replacement is found.
In this news:
• Inlice sale for US$10m agreed
• Sale is to a major Turkish industrial company
• Stratex to receive 45% of post-tax realisation of c.US$3.7m
• Payment values the in-situ reserve at US$167/oz of gold
This is another good result for Stratex. When the development of the project stalled Stratex and its partner NTF agreed to sell the asset. This further cash injection, following the US$20M it received for Öksüt puts the Company in a very strong position to develop its own assets or acquire other early stage assets from the many distressed juniors in the market.