Updating with broker comments from Fairfax
EMED Mining (LON:EMED, TSE:EMD), which is working towards restarting the Rio Tinto copper mine in Spain, said prices of the metal have continued to increase and the outlook is for demand to outstrip supply in the short to medium term.
In a quarterly update for the period to end-March 2011, the group said that at current copper spot prices of around US$4.35 per pound, projected net operating cash flow is estimated to average US$212 million, or €170 million, per year under the current base case development plan.
The company's detailed submissions of the project, including improvement, operating and environmental plans and the associated proposals for bonds, insurances and related undertakings will be now be formally processed.
EMED has approved the next stage of project preparations, being the engineering of project improvements and plant repair programs so that site works can commence by the end of 2011 and production can commence as early as possible in 2012, depending upon the timing of project permitting, formalised access rights to adjoining lands, finance and shareholder approval.
It is also progressing discussions with its financiers so that funding arrangements can be finalised as soon as permitting conditions are clarified.
At the Detva licence in Slovakia, EMED is progressing feasibility work, community consultation, environmental studies, and the approvals required for the proposed open-pit mine at the Biely Vrch gold deposit producing around 60,000 ounces of gold per year at an average cash cost of approximately US$530/ounce.
The permitting process for Biely Vrch has advanced to being granted Protective Deposit Status over the Biely Vrch gold deposit and an application has been submitted for a mining lease.
Broker Fairfax issued a comment today following the operational update, saying EMED appears to have turned a major corner with respect to the Rio Tinto mine. A number of obstacles to the permitting process now seem to have been cast aside following an incident where four mine workers staged a dangerous underground protest which caught the attention of local and national Spanish media (as we previously reported).
"The situation served to highlight the ludicrous local politicking and delays suffered by the project and the need to generate employment in this part of Spain. The issue has also highlighted potential misuse of EU funds into the region to assist project evaluation," the broker added.