Daily Mining Monitor
Anglo Pacific Group PLC (LON:APF) announced that following the announcement on 18 December 2012 of the $15M financing agreement with Anglo Pacific Group PLC ("Anglo Pacific"), Hummingbird Resources announces that having satisfied the conditions precedent with the publication of the results of the Preliminary Economic Assessment on the Dugbe 1 Project, the Company has received the second tranche of US$5M from Anglo Pacific. As previously announced, the third tranche will become due once 25,000m of drilling have been completed. Over 9,000m of drilling has already been completed this year.
Black Mountain Resources (LON:BMZ) has appointed a mining contractor at the New Departure Silver Project in Montana, USA.
In this news:
• United Mine Services Inc., a subsidiary of TSX listed
• United Silver Corporation has been appointed as Mining Contractor.
• UMS already mobilised on site and production expected to start in coming weeks
• Targeted production levels are between 200-250 tonnes per day.
The Company have already stated that productivity has already improved and with additional crews scheduled to commence over the coming week this should continue. No details on the impact on costs were given, but we expect this should be offset by the performance gains.
Botswana Diamonds PLC (LON:BOD) announced that an additional licence has been added to the recently-signed option agreement with a Mozambican company, Morminas, a subsidiary of the EIP Group of Portugal. This now brings the total to three licence blocks that are being evaluated on the Save River in Mozambique, close to the Zimbabwean border. The Save River runs south-eastwards and drains an area of Zimbabwe which contains the Marange diamond fields; Marange itself is predicted to produce up to 16.9M carats in 2013. Botswana Diamonds' objective is to explore the potential for alluvial and eluvial deposits which may have washed down from Marange. The agreement stipulates a six-month exclusivity period during which Botswana Diamonds will review the available data on the licences and undertake preliminary exploration. Initial work has already commenced and a site visit has been scheduled. Should the analysis prove positive Botswana Diamonds will negotiate a long term agreement with Morminas.
In this news:
• Further to the announcement of 28 February, Coal of Africa Limited ("the Company" or "CoAL") advises that
• Transnet Freight Rail has indicated certain supplementary work is required on the rail corridor prior to full re-opening of the line. Work to take two weeks
• The Company anticipates that exports will resume during May 2013
• The force majeure declared by CoAL will remain in effect until the rail system has reached its normal operating capacity
• 100% of the Mooiplaats thermal product channelled to the domestic market.
• Woestalleen export product has been stockpiled to enable immediate supply subsequent to the reopening of the line.
• Production at Vele remains suspended
• The full impact of the force majeure will be determined by the end of the current quarter and disclosed accordingly.
CZA has been struggling for the past two years, often due to its own mistakes, but it has also been hit by a run of bad look which after the recent flooding in Limpopo, this is the latest incident to impact the Company. The Company was already losing money, but with no export sales and limited domestic sales we believe the US$80M it received from Beijing Haihua Energy won’t be enough to develop the coking coal projects and will have to raise additional funds. In March the co-operation agreement signed with a BEI subsidiary stated that it undertook to arrange further funding on a best endeavours basis.
DiamondCorp PLC (LON:DCP) announced an update on activities relating to the 47 level block cave development at the Lace mine in the Free State province of South Africa. On 10 April 2013, the Company received on schedule the second and final tranche of $3M (£1.96M) of loan funds from Laurelton Diamonds, Inc., a wholly-owned subsidiary of Tiffany & Co. The combination of funding through the $6M Tiffany loan, £4.2M of convertible bonds (issued in December 2012) and R220M (£15.6M) from the Industrial Development Corporation of South Africa (as announced on 21 September 2012) completes the R320M (£23M) Lace project financing package. The Main pipe at the Lace mine (DiamondCorp 74% interest) contains 33.1M tonnes of kimberlite with an indicated and inferred resource to a depth of 855m containing approximately 13.4M carats at an average grade of 40.1 carats per hundred tonnes. At a carat value of $160 per carat, the resource has an in-ground value in excess of $2.1B. The deposit will be mined by block cave mining, with three caves planned over the next 25 years on the 47, 67 and 85 levels (at depths of 470m, 670m and 850m respectively). The kimberlite is open at depth, and also contains a significant bulge between 250m and 360m depth with the potential to add additional tonnage and diamonds not currently included in the resource statement.
In February, the Company commenced excavation of a new 66,000 bank cubic metre (bcm) boxcut which will provide the surface entrance to the twin conveyor belt and services declines for the life of the mine. A total of 23,000 bcm of surface sediments and clay material was excavated to the end of March and the boxcut is expected to be completed on schedule in the current quarter.
Griffin Mining Ltd (LON:GFM) announced a profit before tax and interest of $31.2M. Despite record throughput, base metal and silver production, revenues and operating profits in 2012 were impacted by lower metal prices. As a result of this and decreased gold production, revenues fell to $76,860,000 (2011 - $79,062,000) with profits from operations of $31,174,000 (2011 - $36,832,000).
In summary, Griffin’s production results were as follows:
• A record 789,692t of ore were mined, compared to 695,848t in 2011, a 13.5% increase
• A record 800,288t of ore were processed, compared to 715,955t in 2011, an 11.8% increase
• A record 40,581t of zinc metal in concentrate were produced, compared to 36,283t in 2011, an 11.8% increase
• A record 409,596 ounces of silver in concentrate were produced, compared to 312,509oz in 2011, a 31.1% increase
• A record 2,402t of lead in concentrate were produced, compared to 1,909t in 2011, a 25.8% increase
• 8,322oz of gold in concentrate were produced, compared to 10,281oz in 2011, a 19.1% decrease
• The average market price for zinc fell 11% in 2012 from that in 2011. As a result, the average price per tonne of zinc metal in concentrate received by the Group in 2012 fell by 11% to $1,374 (2011 - $1,546). The average price received for silver declined 13% to $22.80/oz (2011 - $26.22) and that for lead by 10% to $1,855/t (2011 - $2,054). The average price received for gold increased by 4% to $1,499/oz (2011 - $1,438)
• Costs of sales increased 9% in 2012 to $34,795,000 (2011 - $31,918,000). With throughput increasing 11.8%, some economies of scale were achieved despite increasing costs as the lower mine levels continue to be accessed
• Group operating costs, including Caijiaying Mine site administration costs, rose 5.6% to $10,891,000 (2011 - $10,312,000) reflecting inflationary cost pressures in China
• Profits before tax declined to $27,239,000 (2011 - $39,953,000) reflecting not just lower operating profits, but also interest charges not incurred in prior years of $3,411,000, foreign exchange losses of $904,000 (2011 - gains of $2,588,000) as well as lower interest receipts.
Hummingbird Resources PLC (LON:HUM) announced that following the announcement on 18 December 2012 of the $15M financing agreement with Anglo Pacific Group PLC, Hummingbird Resources announces that having satisfied the conditions precedent with the publication of the results of the Preliminary Economic Assessment on the Dugbe 1 Project, the Company has received the second tranche of US$5M from Anglo Pacific. As previously announced, the third tranche will become due once 25,000 metres of drilling have been completed. Over 9,000m of drilling has already been completed this year.
In this news:
• Cash flow from operations for the quarter was US$8.0M and $US16.6M for the year to date, compared to US$ 6.8M and $US 17.0M for the corresponding quarter and year to date of the prior financial year
• The Company's cash balance at 28th February 2013 of US$ 5.2M with US$6.5M of committed but unutilized lines of credit available which it is not required in the current development plan
Production and Costs
• Production for the quarter increased by 34.6% year on year to 18,401oz (Q3 2012: 13,668oz). 47,822oz were produced during the three quarters (3Qs 2012: 38,071oz), an increase of 25.6%
• Cash operating costs were $US999/oz vs $US1,104/oz YoY and US$1,093/oz YTD.
The completion of the ramp at Arenal Deeps was key, but the Company encountered some operational issues in the open pits including fleet availability and grade reconciliation, which are still not resolved. Despite this, production improved from 2Q which had been impacted by lower grades from the Crucera open pit. This also improved cash costs to US$999/oz a marked improvement on the US$1,215/oz in 2Q excluding royalties and capital tax. Production remains on track for 63koz-68koz for the year, but there was no change to cash cost guidance which was increased from US$975/oz to US$1,000-US$1,065/oz plus royalties and tax. The Company are making efforts to restructure operations and rather than focus on ounces produced, which led to an increase in costs will now focus on profitability which needs to focus on cash costs, which when including all costs leave the Company vulnerable to a falling gold price.
In this news:
• Stonehenge Metals confirms that the first hole of the present drilling programme was spudded on Thursday, 4 April 2013
• A 12 diamond drill hole programme is proposed to confirm historical uranium drill results and establish a maiden vanadium resource
• Vanadium credits could lower Opex to less than $14 per lb resource
• Local area mapping has located 10 to +50m thick outcrop of Uranium & Vanadium mineralised Black Shale over more than 500m of strike up dip from the current drilling programme
• Four trenches covering ~250m of strike have been channel sampled and samples will be sent for chemical assay during April with results expected in May 2013
• Additional trenches over the remaining out-cropping strike extension will be completed during the course of the current drilling programme
Although permitting took a bit longer than we expected, with the construction of the access roads, Stonehenge has now started the twelve hole diamond drill programme at Chubu. This programme is to confirm the continuity of the uranium mineralised zone including thickness and grade by twinning historic holes drilled by Kores and establish a maiden Vanadium resource to compliment to existing 65Mlb uranium resource. The Company believes this will enable a production process which will deliver good extraction rates and lower production costs than many other Uranium development projects in a country which relies on nuclear power.