EMED Mining (LON:EMED) was among the most followed companies in the mining sector this week after securing sufficient funding for the restart of the Rio Tinto copper mine in Andalucía, Spain on Monday.
It agreed a deal with banking heavyweight Goldman Sachs in relation to a US$175 million financing package.
Goldman will give EMED a US$175 million upfront payment. And in return EMED will deliver the equivalent value of copper once the Rio Tinto mine is up and running, by making monthly deliveries over a seven year period.
Basically, it is lending EMED the project financing money and it will be repaid in copper rather than cash.
Having explored a number of different financing options over the past year EMED decided to take an innovative approach to funding the mine restart project, managing director Harry Anagnostaras-Adams told Proactive Investors.
On the same day, fellow small cap miner Baobab Resources (LON:BAO) revealed the hotly-anticipated resource statement for the Tenge prospect, part of the company’s Tete iron ore project in Mozambique.
It provides an additional 159 million tonnes at a head grade of 38.4 per cent iron and an average concentrate grade of 60.4 per cent.
It also takes the global resource estimate to 482 million tonnes, with over 300 million tonnes in the Tenge-Ruoni area, establishing it as a standalone asset.
The Tete project splits into two distinct parts – the Singore area and directly to the north of this, the Massamba Group.
Massamba can then be split into a number of target areas - Chitongue Grande, Chimbala, the Tenge-Ruoni prospect and finally the rather blandly named South Zone.
Coffey Mining has been commissioned to complete an exploration target assessment of the resource potential of the 'flats' area of Tenge-Ruoni.
Moving to gold miners, Orosur Mining (LON:OMI, CVE:OMI) said its Arenal Deeps gold project in Uruguay has the green light for production, while Condor Resources (LON:CNR) told investors that its La India gold project is both technically feasible and economically viable, according to a study by SRK.
The process took a month longer than the time-table set out in the company’s second quarter report.
This slight delay, changes to the way the underground mine will be developed and the need to complete infill drilling will result in a shortfall in budgeted production of around 6,500 ounces of the precious metal in the year to May 31.
To compensate, the group plans to increase output from the open pit.
As a result it expects to produce 55,000-57,500 ounces of gold in the 2012 financial year, an overall reduction of just 4 per cent on previous estimates.
Orosur chief executive David Fowler said: “Permitting and the ramp up in stope production at Arenal Deeps has taken longer than anticipated which has affected production and operating cost per ounce for the 2012 financial year.
Meanwhile, Condor said the concept study by SRK supports its decision to complete a scoping study at the Nicaraguan gold project this year as a pre-cursor to a pre-feasibility study.
It also told investors that it is aiming to prove up sufficient resources at the La India project to support gold production in the order of 80,000 to 100,000 ounces a year.
This year Condor is setting itself a resource target of 2 million ounces for La India. It follows a successful 2011 in which the resource almost doubled from 868,000 to 1.6 million ounces.
"I am delighted with the rapid resource increase made in 2011 on La India Project and the results and recommendations from SRK's mining concept study and report detailing the recent mineral resource increase to 1.62 million ounces of gold contained in 8.94 million tonnes grading 5.6 grams per tonne.
“La India project is in many ways ‘de-risked’ as we move to increase the total mineral resources to 2 million ounces gold in 2012. The 12,000 metre to 15,000 metre drilling planned for this year will not only increase the resource but focus on increasing the size of a potential mill.
“The board's current objective is to prove sufficient resources to support production of 80,000oz to 100,000oz gold per annum."
In other news in the sector, Rambler Metals & Mining (LON:RMM) unveiled a new China based investor, which is buying 10.4 million new shares in the company for just shy of £3 million.
The new shares are being priced at 28p, or C$0.44 - a 17 per cent discount to Monday’s closing price on AIM. Tinma International already owns around 3 million Rambler shares. It will subsequently own nearly 10 per cent of the company.
Tinma has a first right of refusal to participate in any subsequent funding deals to increase its stake in Rambler to no more than 19.9 per cent.
At Rambler’s Ming mine gold production mine came online in December and copper production is expected to start later this year.
The cash will be used to fund the development of the Ming Mine's Lower Footwall Zone (LFZ) through a feasibility study, Rambler said.
Analysts at Ocean Equities say that Rambler has made a smart move picking a China based group as a strategic partner, as it strengthens ties with Chinese groups that are most likely to take Rambler’s copper concentrate.
In the meantime, North River Resources (LON:NRRP) emerged among the top performers in London markets late in the week after announcing positive results from metallurgical testwork completed on samples from the Malachite Pan and Koperberg copper projects in Namibia on Thursday.
The group told investors that it will focus on Malachite Pan and the wider Witvlei licence area in 2012.
North River said it will seek to extend the Malachite Pan deposit and plans to re-start drilling there in mid April 2012 once further mapping and data analysis has been completed. The aim is to obtain enough data in a 6,000 metre programme to support a feasibility study which it plans to begin in the fourth quarter this year.
North River had reported testwork results from diamond core taken from Malachite Pan and Koperberg in 2011.
Samples from Malachite Pan were segregated into two composite samples, one representing the oxide fraction of the deposit, the other the sulphide fraction. The oxide sample produced recoveries of 82.4 per cent copper and 77.7 per cent silver and the sulphide sample produced rates of 92.8 per cent Cu and 83.5 per cent Ag.
Nyota Minerals (LON:NYO) also generated interest this week, announcing a major upgrade in indicated resources at its flagship Tulu Kapi project in Ethiopia on Friday.
The total new JORC complaint estimate is 17.97 million tonnes containing 1.67 million ounces of gold at an average grade of 2.90g/t.
Within that, indicated gold reserves jumped by 82 per cent to 831,000 ounces at 3.01g/t, with inferred ounces of 841,000 at 2.79g/t.
Nyota said the jump in indicated resources reflected an increased understanding of the geology and structure at the deposit following its latest drill programme.
This latest estimate also only includes assay results up to the end of January. Data received after that will be included in another resource estimate due later this year.
Richard Chase, chief executive, said: “The resource drilling completed between June and the end of December last year focused on increasing confidence in the geological model so as to convert Inferred Resources to Indicated Resources, as well as increasing the overall contained gold without a significant change in tenor.
“Both of these objectives have been achieved,” he said.