Daily Mining Monitor
Amara Mining (LON:AMA) has received Environmental and Construction Permits for the haul road at its Kalsaka/Sega gold project in Burkina Faso.
In this news:
• Connects existing Kalsaka heap leach plant with the Sega deposit, 20km to the north
• Construction to take 3 months with first material transported in 2Q’13
• Full Environmental Permit for Sega expected in 2Q’13, with full Mining Licence 6 weeks later
• Mining to commence at Sega in 3Q’13.
FD Comment:
The development of Sega is key for Amara allowing it to increase production and lower costs providing increased revenue to fund exploration.
Beacon Hill Resources (LON:BHR) has released its quarterly report to the end of March.
In this news:
• Successful development of an economically attractive end-to-end logistics solution to transport coking coal produced at the Minas Moatize mine to export markets via the port of Beira:
• Rail: Receipt of 0.5Mtpa capacity allocation on the Sena Line
• Rolling Stock: Lease agreement with Thelo Rolling Stock Leasing Proprietary Limited ('Thelo') for the provision of rolling stock on the Sena Line
• Commissioning for Phase 2A of the Minas Moatize Coking Coal Plant progressing well with first coking coal production due in Q2 2013
• Mining Contract signed between the Company and the Government of Mozambique to enhance the stability of the fiscal and regulatory environment for a period of 25 years
• 31% increase in JORC Resource at Minas Moatize - upgraded to 86.8Mt (Measured and Indicated of 76.3Mt) from 66.4Mt Measured and Indicated
• Raised US$21M from new and existing shareholders to strengthen the Company's balance sheet, upgrade rail infrastructure including rail sidings, commence Phase 2B and 2C wash plant upgrades and for rail rolling stock related and general working capital purposes.
FD Comment:
Receiving rail allocation was key to being able to leverage Minas Moatize early mover advantage, which is what makes the last quarter particularly good for the Company. The focus now is on implementation and production of first coking coal. The expansion remains on track of which the expanded washplant is key and the Company is looking to arrange additional secured debt for capital expenditure, on-going working capital funding and to refinance the senior secured US$10M debt facility with Vitol Coal S.A.
Fox Marble (LON:FOX) has issued 132,404 shares to Non-Executive Directors of the Company as part of their remuneration package.
In this news:
• Non-Executive Directors of the Company agreed to utilise their first year's fees (net of tax) to subscribe for Ordinary Shares in the Company at the Company's request
• Priced at 18.02p ps equivalent to the 30 day volume weighted average price as at 20 April 2013.
• Andrew Allner received 44,986 shares, Sir Colin Terry 22,895 shares, Roy Harrison 22,895 and Amati Global Partners LLP on behalf of Dr Paul Jourdan received 41,628 shares.
Ferrum Crescent (LON:FCR) has released its quarterly results to the end of March.
In this news:
• Signed Process Enginnering Agreement for Moonlight Iron Ore Project with Danieli & C. Officine Meccaniche S.p.A. to act as process engineer in the Bankable Feasibility Study including Beneficiation Plant, Peletising Plant and Laboratory testing
• Analysis by Ferrum Crescent of final pellet plant location and related infrastructure near completion
• Cash as at 31 March 2013 is approximately A$1.2M.
FD Comment:
The Company already has an offtake agreement with Duferco SA back in 2011 and its final mining licenses granted. The issue now is how to fund the BFS. Planned expenditure for the next quarter is only A$600k split A$200k exploration and A$400k on administration, but with A$1.2M in the bank, the Company will have to raise further funds very soon.
Horizonte Minerals (LON:HZM) has released new high grade nickel results from the infill drilling programme at Araguaia.
In this news:
• New high grade nickel intersections at the Vila Oito East Target include:
o 14.33m grading 1.79% Ni
o 9.88m grading 1.78% Ni
o 11.86m grading 1.75% Ni
• New high grade nickel intersections from the Vila Oito Target include:
o 4.33m grading 1.85% Ni
o 6.24m grading 1.77% Ni
o 299 holes (8,688m) of the Phase 3 infill drill programme completed to date (commenced on 18 September 2012) targeting the Jacutinga, Vila Oito West, Vila Oito, Vila Oito East and Pequizeiro West targets at Araguaia.
FD Comment:
More positive results from Horizonte and with the drill programme coming to an end we expect the Company will now be able to upgrade the current resource to the indicated category sufficient for a 20 year mine life. Significantly the Company has been focussing on higher grade areas with the latest results significantly higher than the 1.22%Ni grade of the current inferred portion of the resource. The Company expects to award the contract for the PFS imminently and the Social Environmental Impact Assessment ('SEIA') is on track and expected to be filed with SEMA, the Brazilian Environmental Agency, in Q3.
Metminco (LON:MNC) has released its March quarter results.
In this news:
Los Calatos Project - Peru
• Independent Mining Scoping Study indicates low-cost, long life, copper mine.
• Long-life asset with 31-year Life of Mine ("LoM")
• Project would comprise an open pit followed by underground block cave mining operation
• Total material treated over LoM of 656Mt at 0.45% Cu and 0.026% Mo (0.56% CuEq)
• Initial open pit operation with a 7-year life and a low strip ratio of 2.2:1
• Average annual copper in concentrate production of 83.3kt (184m lbs)
• Lowest quartile LoM cash operating costs net of credits of U$1.09/lb
• Pre-production capital expenditure of U$1.5B including initial underground development
• Optimisation work on the mine plan continues with the objective of increasing the mineral resources amenable to open pit mining and reducing the pre-production capital expenditure relating to the underground development
Mollacas Project - Chile
• Final phase of metallurgical testwork currently in progress
• Geotechnical work on planned open pit and heap leach pads complete
Vallecillo Poject - Chile
• Internal Scoping Study initiated
Corporate
• Cash position as at 31 March 2013 was approximately US$15.0M
• The Company is in a position to consider a range of strategic options in relation to the development of Los Calatos and the Chilean assets, whilst at the same time continuing to reduce costs.
FD Comment:
The Company has US$1.5B capex itself. However, unlike most of its peers the Company does have cash (US$15M) and so doesn’t have to make any hasty decisions.
Scotgold Resources (LON:SGZ) has released the Final Cononish Development Study by AMC.
In this news:
• Annualized processing plant recovery of 20,200oz Au equivalent to concentrate and doré over initial 7 years at average operating cash cost1 of $698 per oz Au equivalent
• Using base case gold price of US$1,300 /oz pre-tax IRR of 26% and NPV10 of £11.8M and payback over 33 months from start of production
• At spot price of US$1,428/oz (24/4/13) pre-tax IRR of 37%, NPV10 of £21.1M and payback 26 months from start of production
• Preproduction project expenditure is estimated at £22M, including an overall 15% contingency allowance on capital expenditure (excluding working capital and fixed bond amounts).
FD Comment:
The project looks robust even on recent lows, but the difficulty the Company will have is in raising the required £22M given its current share price. As a result the Company is looking to defer any immediate capital raise until market sentiment improves. In the meantime RMB remain supportive and the Company is looking at a number of strategic alternatives, although no details are given.
Vane Minerals (LON:VML) has issued a trading update.
In this news:
• 1Q’13 results will be announced mid-may but revenues from its gold and silver operations at its joint venture in Mexico will be 20% lower than expected and lower than 4Q’12
• Company looking to reduce costs and looking at a potential sale of its uranium assets and expects to be able to announce positive developments soon
• Looking for third party finance for its U.S. porphyry copper exploration programme, but nothing expected to be announced in short term
• The DOI has filed a Motion to Dismiss the Company’s lawsuit seeking redress on financial losses as a result of the withdrawal of the lands where VANE held its mining claims on which it had invested US$8.5M
• David Newton, CEO is to leave the Company to pursue new opportunities. David will remain with the Company until 31 July 2013.
FD Comment:
After a record 4Q’12 it’s back with a bump. Lower grades, weaker gold and silver prices and a stronger peso all hit last quarter. Although grades have since improved and commodity prices strengthened somewhat it looks like being a tough period for the Company and the resignation of the CEO will do little to help investor confidence.