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Amur Minerals, Orosur Mining, Centamin PLC, Ferrexpo and others feature in Fox-Davies Newsflash

Last updated: 18:06 09 Apr 2013 AEST, First published: 17:06 09 Apr 2013 AEST

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Daily Mining Monitor

Amur Minerals (LON:AMC) has released an update on the status of its Kun-Manie nickel-copper sulphide project.

In this news:

Russian government has approved a draft law exempting greenfield projects from the profit tax for a period of five years, and reducing it to 10% for the following five years

Draft law will go to the State Duma for final revision and approval in the near future

The pre-feasibility study completed by SRK Consulting in 2007 projected that the Company could incur approximately $114M in profits tax over the 10 year life of the operation. This was based on the 24% profit tax rate defined in 2007

Duma approval of the newly drafted legislation could result in a reduction in the projected tax payments in the amount of $95M to $100M over the course of the 10 year tax holiday

The improved Net Present Value of the project due to the proposed tax holiday is an increase from the originally estimated $81M to $143M using a discount rate of 10%. The Internal Rate of Return could also increase from 15.8% to 20.3%

The Company conducting a re-evaluation of cost increases and technological improvements that impact the 2007 pre-feasibility pro forma cash flow model and which will be released when completed.

FD Comment:

We expect that with 5 years of cost inflation the benefits will be lessened to the US$62M increase to the 2007 NPV, but there is no doubt that once in production this will be a significant benefit to the Company.

Centamin Egypt (LON:CEY) announced its preliminary production results from its Sukari Gold Mine in Egypt for the quarter ended 31 March 2013. Total gold production for the quarter was a record 87,016oz, a 77% increase on the corresponding quarter in 2012 and a 2% increase on Q4 2012. Formal guidance for the current year, provided on 14 March 2013, is 320,000oz gold at a cash operating cost of US$70/oz.

Open pit total material movement of 10,550Kt increased 56% and ore production of 2,133Kt was up 11% on Q4 2012. The underground mine delivered 119Kt, up 6% on Q4 2012. The run of mine ore stockpile balance increased by 38Kt to 759Kt at the end of the period.

Quarterly throughput at the Sukari process plant was a record 1,402Kt, a 37% increase on the prior year period and a 12% increase on Q4 2012; exceeding the nameplate annualised rate of 5Mt. This performance was driven by continued high levels of productivity coupled with a reduced impact from stoppages compared with the previous quarter.

FD Comment:

This is an excellent start to the year. In our modelling we had production skewed towards the second half as the plant ramped up and more high grade underground ore was milled. If production keeps going at this rate, guidance will be blown away and production will be much closer to the 367Koz of gold production in the original 5 year plan.

Ferrexpo (LON:FXPO) has released its 1Q’13 production figures.

In this news:

Total pellet production was 2,551Kt up 0.7% QoQ, with a marked switch to higher grade 65% Fe pellets (+7.8%) at the expense of the 62% pellets (-3.6%)

Whilst overall production from Ferrexpo Poltava Mining (FPM) was fell down -8.8% the ramp up at Ferrexpo Yeristovo Mining (FYM) continued up 204.3% after entering production last quarter.

FD Comment:

Ferrexpo is continuing to ramp up production with FPM now in production in the face of softening prices. Although pre-tax profits fell sharply last year, the improved infrastructure and new production means that the Company will continue to be competitive.

Kenmare Resources PLC (LON:KMR) announced the following update of production during the first quarter of 2013: Production of Heavy Mineral Concentrate was 189,800 tonnes (2012 Q4: 157,000t), up 20.9%. This was processed into 137,500t (2012 Q4: 123,600t) of ilmenite, up 11.2%, and 10,400t (2012 Q4: 10,700t) of zircon, down 2.9%, including 4,700t of a secondary zircon product (2012 Q4: 4,500t), up 4.0%. Production for March increased from previous months as the dredge pond comes towards the end of its transition from the low lying Namalope Flats zone onto a raised dunal plateau where it will mine for the coming years. 48,500t of ilmenite were shipped during the first quarter of 2013 (2012 Q4: 201,400t). This lower level of shipment was due to both low levels of stocks at year end and subdued market demand. Shipments have picked up in the second quarter, with six scheduled for April and five for May. Construction activity relating to the development of expanded facilities at Moma is nearing a close, with handover of Wet Concentrator Plant B and the new dredge from the contractor expected in the coming weeks. The operations team for the new facilities has been participating in staged commissioning of these plants for the last month. Handover will allow final commissioning, enabling the processing of first ore and the start of production ramp-up. The markets for titanium feedstocks and zircon remain subdued, but signs of improvement in volume demand in both markets are becoming evident, as demonstrated by increased shipping activity.

Orosur Mining (LON:OMI) has released an update its exploration activities in Chile.

In this news:

Anillo 

Successful completion of CSAMT (Controlled Source Audio-frequency Magneto Telluric) survey, to pinpoint the location of sub-vertical silica-bearing structures which may host economic gold-silver mineralization

The Company will commence drill testing the highest priority targets in May, 2013.

Pantanillo

New geological mapping and sampling has confirmed the evidence of a high sulfidation gold system under a steam heated zone at Quebrada Pantanillo

Additional activities over the last 6 months have been focused on the evaluation of new, potentially higher grade, exploration targets that lie outside of the existing mineral resource. This potential high sulfidation gold system is located approximately 4km East-Southeast of Pantanillo Norte where the Company has defined a maiden National Instrument 43-101 measured and indicated mineral resource of 47Mt at 0.69 grams of gold per tonne for 1.05Moz of gold

The Company is currently evaluating next summer campaign including geophysics and drilling at the new areas starting in November 2013.

FD Comment:

Orosur continues to remain focussed on sorting out production at San Gregorio where according to the Company’s announcement last week further operational issues continue to emerge. As a result exploration outside Uruguay will remain restricted. However, it is encouraging that drilling will start at Anillo next month and the Company remains keen to demonstrate commerciality at both Anillo and Pantanillo.

 

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

10 hours, 43 minutes ago