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Thursday, 13 June 2013
EMED Mining shares soar as it increases copper off-take for Rio Tinto mine
EMED Mining (LON:EMED, TSE:EMD) shares advanced on Thursday as said it will increase the amount of copper to be sold from the Rio Tinto mine under off-take agreements.
Term sheets with separate cornerstone customersYanggu Xiangguang Copper (XGC) and Red Kite will increase the committed allocation of copper concentrate to 49% of current reserves, up from 34% under previous arrangements.
This follows continued project due diligence from the customers in recent months.
XGC vice president Harry Liu says the Chinese mining investment group is confident of the Rio Tinto mine re-start and it is pleased to reinforce its support of EMED and the company’s desired timetable.
The AIM quoted mine developer revealed that it has also secured £9.6mln (US$15mln) with the issue of loan notes to the two copper buyers.
The notes can be converted into EMED shares at a price of 9p per share, which is some 58% above EMED’s average share price over the past five days.
The extra cash will be used as the company navigates the final permitting process for the mine regeneration project, and it will also be used for preliminary restart activities.
EMED said definitive agreements for the arrangements announced today are expected imminently, though they will be subject to approval from the Chinese government.
"The proposed arrangements with globally important copper-sector specialists XGC and Red Kite will form an important component ofEMED Mining's support for long term development at the Rio Tinto Copper project,” said managing director Harry Anagnostaras Adams.
“We are heartened by XGC and Red Kite's continued support following the completion by them of further due diligence on all aspects of the project over the last couple of months and we expect to finalise documentation imminently.
"We believe the continued support of sophisticated mining investors once again highlights the project's potential."
EMED shares shot up 25% in the wake of the announcement, rising 1.38p to trade at 6.88p each.
The hotly anticipated Rio Tinto mine restart project is currently on track for commissioning by mid-2014.