Rubicon Minerals (TSE:RMX) (AMEX:RBY) said Wednesday that it has received the results of a preliminary economic assessment (PEA) on its F2 Gold System, part of its Phoenix gold project in Ontario's Red Lake District, indicating a cash cost as low as US$214 per tonne of processed material.
The report, prepared by AMC Mining Consultants, estimates the F2 System will produce 180,000 ounces of gold per year in the base case scenario over a life of 12 years, with a production rate of 1,250 tonnes per day.
This, according to the study, would yield a net present value of $433 million, at a 5% discount rate, and a pre-tax 28% internal rate of return, with a payback period of 3.3 years from the start of production. These base case results were calculated using a gold price of $1,100 per ounce, the company said, and increase when using a higher, spot gold price.
Indeed, using a gold price of $1,500 per ounce, net present value, using the same discount rate, would jump to $933 million, while the pre-tax internal rate of return would climb to a whopping 48%.
"The PEA is a very good start. It indicates that the F2 Gold System is a potentially viable project capable of producing...over 200,000 ounces at its peak using conventional mining and processing techniques," said president and CEO David Adamson.
Initial capital costs were estimated at $214 million for the project, relatively modest considering the high grades of the project.
"The use of a 30% contingency on capital costs represents a reasonably conservative approach which recognizes the reality of cost escalation in the industry," added Adamson.
In addition to the strikingly encouraging financials, a significant portion of resources was also upgraded from the inferred to the indicated category, with the deposit remaining open in all directions. The company said it aims to continually upgrade resources through definition drilling.
At a cut-off grade of 5.0 grams per tonne (g/t) of gold, the preliminary report was based on an updated NI 43-101 compliant mineral resource estimate, containing an indicated resources of 1.03 million tonnes grading 14.5 g/t gold, or 477,000 ounces of gold, and an inferred resource of 4.2 million tonnes grading 17.0 g/t gold, or 2.3 million ounces of gold.
The conventional mining plan is based on a two-year pre-production phase and a producing mine life of 12 years, using 2.0 million ounces of gold, which now stands at 72% of the currently identified resources. The study noted that there may be opportunity to drive a ramp from the surface to accelerate production in the upper part of the deposit in the early years of the project, therefore changing the cash flow of the potential mine.
Results of metallurgical testing suggested that processing would be done using a straightforward combination of gravity followed by a carbon-in-leach process, with gold recoveries estimated to be around 92.5%, with potential for further optimization. The average mined gold grade would be 13.87 grams per tonne.
Rubicon, which has substantially all material permits in place required for the development and construction fo the project, is focused on the high grade Phoenix property in Red Lake, where it controls 100 square miles of exploration ground.
Earlier this week, the company agreed to option a majority position in its mineral rights held in the Long Canyon Trend of northeastern Nevada to Vancouver-based West Kirkland Mining (CVE:WKM).
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Wednesday, 29 June 2011
Tantalus Rare Earth continues to see TRE as a world class project
Tantalus Rare Earths AG (CVE:TRE) told investors that its latest drill results have confirmed the existence of rare earths in the top layer of mineralisation, from the TRE project in north-western Madagascar.
The drill results indicate average grades of 771 parts per million total rare earth oxide (TREO). Tantalus also highlighted that the average thickness of the surface layer is considerably higher, which would add more tonnes of potential ore.
In all Tantalus has completed 11,151 metres of diamond drilling so far.
Importantly the company pointed out that today’s results continue to show a high proportion of the higher value, strategic heavy rare earths. Indeed the group believes that it has its hands on one of the most important rare earth assets in the world.
“This drilling update sets out the significant progress we have made with this potential world class rare earth project,” said Tantalus director Ivan Murphy.
He added: “(Testing) continues to make progress on defining and understanding the separation process for this very large potential resource, with the latest results from gravitational and magnetic treatments being particularly encouraging, as this would be extremely advantageous, both economically and environmentally.”
Tantalus also told investors that its Chinese associate, China Nonferrous Metal Industry’s Foreign Engineering & Construction, recently carried out a field visit and sampled the REE bearing laterites. These samples are currently being analysed and processed in China.
According to China Nonferrous Metals’ technical staff the laterites are potentially comparable to the heavy REE (HREE) bearing clays mined in southern China.
TRE is conducting metallurgical testwork in three separate laboratories, one in conjunction with China Nonferrous Metals in China, one in Germany and one in South Africa. The aim of the test work is to identify as soon as possible a low-cost extraction process.
Initial test work suggests a combined magnetic/gravity concentrate of mineral phases containing REE, plus tantalum, niobium, zirconium, tin and perhaps gallium can be extracted, which has potential to add significant value to the project.
Meanwhile Tantalus said its pitting work on Target 4, which potentially has REE bearing laterites over 30 square kilometres, is progressing well.
One hundred and thirteen pits have been excavated to date, with another fourteen in progress.
Additionally Tantulas said he has added the first of five ‘man portable’ drill rigs, also known as window samplers, with the remaining four expected to arrive in early July 2011.
The drill results indicate average grades of 771 parts per million total rare earth oxide (TREO). Tantalus also highlighted that the average thickness of the surface layer is considerably higher, which would add more tonnes of potential ore.
In all Tantalus has completed 11,151 metres of diamond drilling so far.
Importantly the company pointed out that today’s results continue to show a high proportion of the higher value, strategic heavy rare earths. Indeed the group believes that it has its hands on one of the most important rare earth assets in the world.
“This drilling update sets out the significant progress we have made with this potential world class rare earth project,” said Tantalus director Ivan Murphy.
He added: “(Testing) continues to make progress on defining and understanding the separation process for this very large potential resource, with the latest results from gravitational and magnetic treatments being particularly encouraging, as this would be extremely advantageous, both economically and environmentally.”
Tantalus also told investors that its Chinese associate, China Nonferrous Metal Industry’s Foreign Engineering & Construction, recently carried out a field visit and sampled the REE bearing laterites. These samples are currently being analysed and processed in China.
According to China Nonferrous Metals’ technical staff the laterites are potentially comparable to the heavy REE (HREE) bearing clays mined in southern China.
TRE is conducting metallurgical testwork in three separate laboratories, one in conjunction with China Nonferrous Metals in China, one in Germany and one in South Africa. The aim of the test work is to identify as soon as possible a low-cost extraction process.
Initial test work suggests a combined magnetic/gravity concentrate of mineral phases containing REE, plus tantalum, niobium, zirconium, tin and perhaps gallium can be extracted, which has potential to add significant value to the project.
Meanwhile Tantalus said its pitting work on Target 4, which potentially has REE bearing laterites over 30 square kilometres, is progressing well.
One hundred and thirteen pits have been excavated to date, with another fourteen in progress.
Additionally Tantulas said he has added the first of five ‘man portable’ drill rigs, also known as window samplers, with the remaining four expected to arrive in early July 2011.
Globex receives 41% stake in Mag Copper as partial payment for Magusi-Fabie
Globex Mining Enterprises (TSE:GMX) reported on Tuesday that it has received 13.5 million shares of Mag Copper as partial payment for its Magusi-Fabie polymetallic mine property situated north of Rouyn-Noranda, Quebec.
The Magusi River and Fabie Bay massive sulphide deposits are part of a large optioned block totalling 1,952 hectares covering the Hebecourt Township, north of Rouyn-Noranda in Dufresnoy Township, in Quebec.
The shares issued to Globex have a cash value of $4.72 million as of yesterday’s closing price. The 13.5 million shares, which reflect a 41% stake, were issued by Mag for $0.125 a share, taking into account the one-for-five share consolidation, Globex said.
The Canadian-based company said it could further invest in Mag Copper, depending on price, availability and general market conditions.
Under the terms of the agreement between the two companies, Mag Copper can earn a 100% interest in the Magusi-Fabie mine property by issuing 13.5 million of its shares and by making cash payments totalling $1.75 million over a three-year period, under the terms of its agreement.
In addition, Mag must incur $10.25 million in expenditures on the property within four years, and reserve a 3% gross metal royalty on production for Globex, of which 1% may be purchased for $5 million.
Globex is a development-stage Canadian mining exploration company with a North American portfolio of gold, copper, zinc, silver, platinum, and rare earths properties. The company is currently exploring its Cote copper-nickel property and Colnet Lake properties, located west of Rouyn-Noranda.
The Magusi River and Fabie Bay massive sulphide deposits are part of a large optioned block totalling 1,952 hectares covering the Hebecourt Township, north of Rouyn-Noranda in Dufresnoy Township, in Quebec.
The shares issued to Globex have a cash value of $4.72 million as of yesterday’s closing price. The 13.5 million shares, which reflect a 41% stake, were issued by Mag for $0.125 a share, taking into account the one-for-five share consolidation, Globex said.
The Canadian-based company said it could further invest in Mag Copper, depending on price, availability and general market conditions.
Under the terms of the agreement between the two companies, Mag Copper can earn a 100% interest in the Magusi-Fabie mine property by issuing 13.5 million of its shares and by making cash payments totalling $1.75 million over a three-year period, under the terms of its agreement.
In addition, Mag must incur $10.25 million in expenditures on the property within four years, and reserve a 3% gross metal royalty on production for Globex, of which 1% may be purchased for $5 million.
Globex is a development-stage Canadian mining exploration company with a North American portfolio of gold, copper, zinc, silver, platinum, and rare earths properties. The company is currently exploring its Cote copper-nickel property and Colnet Lake properties, located west of Rouyn-Noranda.
Rambler generates $1.1m profit from Nugget Pond, construction at Ming Mine on track
Rambler Metals and Mining (CVE:RAB) (AIM:RMM) announced Tuesday its Nugget Pond project on the Baie Verte Peninsula in northeastern Newfoundland returned a profit, while construction at its nearby Ming mine is well on its way to production in the second half of the year.
Since operations began in May, mining and milling at the Nugget Pond Crown Pillar returned a total of 1,053 ounces of gold, after refining, providing Rambler with over $1.1 million in net profit, at $401 per ounce, from the operation.
At the Tilt Cove East mine, 5,424 tonnes of material have been transported to and processed through the Nugget Pond mill, which Rambler purchased for $3.5 million in 2009. The mined material has an average grade of 2.64 grams per tonne (g/t) gold, and an estimated 92% recovery rate.
The company said Tilt Cove processing at the Nugget Pond mill will continue throughout the summer, until construction of the new concentrator is completed.
"We anticipate the mining of the Tilt Cove East deposit will be as successful as the Nugget Pond Crown Pillar, creating another net profit for the company," said president and CEO, George Ogilvie.
"We expect the net profit from these satellite deposits, and toll milling contracts as a whole, will more than payback the CAD $3.5M Rambler paid for the mill in 2009."
Meanwhile, construction at the Ming mine remains on schedule, with first production still expected in the second half of the year. Rambler said it has 2,500 tonnes of ore from the copper mine stockpiled, aiming for 15,000 tonnes before commissioning the mill concentrator.
Rambler said that zone 1806 at Ming has resources of 349,000 tonnes, grading 3.96 g/t gold and 0.60% copper. Crews will soon turn their attentions to the 1807 zone, which has measured and indicated resources of 432,000 tonnes, grading 3.86% copper, 1.75 g/t gold and 7.18 g/t silver.
Rambler is a junior mining company based in Sutton, Surrey, UK, with offices in Baie Verte, Newfoundland. The company, which is listed both in Toronto and in London, has full ownership of its Ming mine and, in 2009, purchased the Nugget Pond mill located 40 kilometres away.
Since operations began in May, mining and milling at the Nugget Pond Crown Pillar returned a total of 1,053 ounces of gold, after refining, providing Rambler with over $1.1 million in net profit, at $401 per ounce, from the operation.
At the Tilt Cove East mine, 5,424 tonnes of material have been transported to and processed through the Nugget Pond mill, which Rambler purchased for $3.5 million in 2009. The mined material has an average grade of 2.64 grams per tonne (g/t) gold, and an estimated 92% recovery rate.
The company said Tilt Cove processing at the Nugget Pond mill will continue throughout the summer, until construction of the new concentrator is completed.
"We anticipate the mining of the Tilt Cove East deposit will be as successful as the Nugget Pond Crown Pillar, creating another net profit for the company," said president and CEO, George Ogilvie.
"We expect the net profit from these satellite deposits, and toll milling contracts as a whole, will more than payback the CAD $3.5M Rambler paid for the mill in 2009."
Meanwhile, construction at the Ming mine remains on schedule, with first production still expected in the second half of the year. Rambler said it has 2,500 tonnes of ore from the copper mine stockpiled, aiming for 15,000 tonnes before commissioning the mill concentrator.
Rambler said that zone 1806 at Ming has resources of 349,000 tonnes, grading 3.96 g/t gold and 0.60% copper. Crews will soon turn their attentions to the 1807 zone, which has measured and indicated resources of 432,000 tonnes, grading 3.86% copper, 1.75 g/t gold and 7.18 g/t silver.
Rambler is a junior mining company based in Sutton, Surrey, UK, with offices in Baie Verte, Newfoundland. The company, which is listed both in Toronto and in London, has full ownership of its Ming mine and, in 2009, purchased the Nugget Pond mill located 40 kilometres away.
Temex makes final payment for 60% stake in Upper Hallnor Mine
Temex Resources Corp. (CVE:TME) reported on Tuesday that it has made its final payment of two million common shares for its 60% interest in the Upper Hallnor Mine property, in Whitney Township.
The Upper Hallnor property is situated in Temex's Timmins Whitney gold project, within Canada’s Abitibi Greenstone Belt, which stretches through Ontario and Quebec, and is host to many high grade underground gold mines.
The shares were issued to Goldcorp Canada (TSE:G), under a joint venture agreement.Temex acquired a 60% stake to mineral rights at the Upper Hallnor property for $1.25 million, payable in two instalments.
The first payment of $625,000 was paid upon signing the agreement, with the second installment to be paid by the first anniversary of the deal, in either cash or shares. Temex chose to pay the second tranche in shares.
As part of the deal, Temex has been designated as the operator of the project, and is responsible for carrying out operations. A joint work program worth $8.33 million will be undertaken in a five year-period on the property, and Temex has agreed to fund a total of $5 million in exploration expenditures.
Separately, Temex said it has also issued 30,000 common shares under an option agreement to acquire its 100% interest in the Croxall property from West Timmins Mining. Further, a cash payment of $30,000 was paid by Mill City, as Mill has the option to acquire a 75% interest in the Croxall Property from Temex.
The 2,400 acre Croxall property is located in the area of the West Timmins Gold District.
Canada-based Temex is focused on exploring precious metals properties in northeastern Ontario. The properties are in proximity to the Porcupine - Destor and Cadillac - Larder Lake fault zones, from which over 150 million ounces of gold has been mined to date.
The Upper Hallnor property is situated in Temex's Timmins Whitney gold project, within Canada’s Abitibi Greenstone Belt, which stretches through Ontario and Quebec, and is host to many high grade underground gold mines.
The shares were issued to Goldcorp Canada (TSE:G), under a joint venture agreement.Temex acquired a 60% stake to mineral rights at the Upper Hallnor property for $1.25 million, payable in two instalments.
The first payment of $625,000 was paid upon signing the agreement, with the second installment to be paid by the first anniversary of the deal, in either cash or shares. Temex chose to pay the second tranche in shares.
As part of the deal, Temex has been designated as the operator of the project, and is responsible for carrying out operations. A joint work program worth $8.33 million will be undertaken in a five year-period on the property, and Temex has agreed to fund a total of $5 million in exploration expenditures.
Separately, Temex said it has also issued 30,000 common shares under an option agreement to acquire its 100% interest in the Croxall property from West Timmins Mining. Further, a cash payment of $30,000 was paid by Mill City, as Mill has the option to acquire a 75% interest in the Croxall Property from Temex.
The 2,400 acre Croxall property is located in the area of the West Timmins Gold District.
Canada-based Temex is focused on exploring precious metals properties in northeastern Ontario. The properties are in proximity to the Porcupine - Destor and Cadillac - Larder Lake fault zones, from which over 150 million ounces of gold has been mined to date.
Minefinders intersects high gold, silver grades at La Virginia
Minefinders Corp (TSE:MFL) (AMEX:MFN) announced Tuesday it intersected 6.46 grams per tonne (g/t) of gold equivalent over 67 metres at its La Virginia mine near Hermosillo in Sonora State, Mexico.
The Vancouver, B.C.-based company began exploration drilling at the El Campo Santo, Las Huatas and Con Virginia zones in 2010.
Based on the results of the 2010 program, core drilling in 2011 focused on the Las Huatas zone, where gold assays in hole LV11-36C ranged up to 2.0 metres averaging 13.0 g/t of gold, with five separate assay intervals exceeding 3.0 gpt of gold.
Silver assays ranged up to 1,042 g/t of silver over 2 metres, with five assay intervals exceeding 500 g/t. These high-grade intercepts are contained within an overall mineralized interval of 67.0 metres, averaging 6.46 g/t gold equivalent, or 2.33 g/t gold and 247.5 g/t silver.
The company said the high-grade zones in the Las Huatas Zone remain open to depth and laterally along strike.
Other highlights at Las Huatas included two metres of 2.69 g/t gold and 215.1 g/t silver in hole LV11-30C, and 1.96 g/t gold and 189.5 g/t silver over 4.95 metres, including 2.86 g/t gold and 273.9 g/t silver over 2.95 metres in hole LV11-33C.
"We are encouraged by the success of our initial exploration program on the La Virginia property, but with multiple targets remaining to be tested we have a lot of work to complete before we will know the true significance of this discovery," said vice president of exploration, Tench Page.
Highlights from the Con Virginia zone include 2.2 metres of 2.76 g/t gold and 225.4 g/t silver in hole LV11-29C, including 4.44 g/t gold and 363.3 g/t silver over 1.2 metres.
Intercepts from the El Campo Santo zone, located one kilometre north of Con Virginia, are similar to those observed above the 1,800 metre elevation in the Las Huatas zone, the company said, but this program is still in the early stages. New drilling is currently testing the potential of deeper levels of the system.
The precious metals mining and exploration company, whose stock on the Toronto Stock Exchange has jumped 1.19% to $11.90 per share, has drilled over 13,000 metres in 42 completed core holes at the La Virginia property to date. So far, the company has drilled nearly half of its 12,750 metre 2011 drilling target as it advanced towards establishing an NI 43-101 compliant resource.
The 34,000 hectare La Virginia project is located 100 kilometres north-northwest of the company's Dolores Mine.
The Vancouver, B.C.-based company began exploration drilling at the El Campo Santo, Las Huatas and Con Virginia zones in 2010.
Based on the results of the 2010 program, core drilling in 2011 focused on the Las Huatas zone, where gold assays in hole LV11-36C ranged up to 2.0 metres averaging 13.0 g/t of gold, with five separate assay intervals exceeding 3.0 gpt of gold.
Silver assays ranged up to 1,042 g/t of silver over 2 metres, with five assay intervals exceeding 500 g/t. These high-grade intercepts are contained within an overall mineralized interval of 67.0 metres, averaging 6.46 g/t gold equivalent, or 2.33 g/t gold and 247.5 g/t silver.
The company said the high-grade zones in the Las Huatas Zone remain open to depth and laterally along strike.
Other highlights at Las Huatas included two metres of 2.69 g/t gold and 215.1 g/t silver in hole LV11-30C, and 1.96 g/t gold and 189.5 g/t silver over 4.95 metres, including 2.86 g/t gold and 273.9 g/t silver over 2.95 metres in hole LV11-33C.
"We are encouraged by the success of our initial exploration program on the La Virginia property, but with multiple targets remaining to be tested we have a lot of work to complete before we will know the true significance of this discovery," said vice president of exploration, Tench Page.
Highlights from the Con Virginia zone include 2.2 metres of 2.76 g/t gold and 225.4 g/t silver in hole LV11-29C, including 4.44 g/t gold and 363.3 g/t silver over 1.2 metres.
Intercepts from the El Campo Santo zone, located one kilometre north of Con Virginia, are similar to those observed above the 1,800 metre elevation in the Las Huatas zone, the company said, but this program is still in the early stages. New drilling is currently testing the potential of deeper levels of the system.
The precious metals mining and exploration company, whose stock on the Toronto Stock Exchange has jumped 1.19% to $11.90 per share, has drilled over 13,000 metres in 42 completed core holes at the La Virginia property to date. So far, the company has drilled nearly half of its 12,750 metre 2011 drilling target as it advanced towards establishing an NI 43-101 compliant resource.
The 34,000 hectare La Virginia project is located 100 kilometres north-northwest of the company's Dolores Mine.
Moly Mines officially secures $500m Chinese loan
Moly Mines (TSE:MOL)(ASX:MOL) said Tuesday that it has signed a project financing agreement with China Development Bank Corp (CDB), totaling US$494 million, to construct the Spinifex Ridge molybdenum-copper mine in Western Australia.
At the start of May, Moly announced the confirmation that the CDB completed its credit approval process for the revised US$494 million in project finance facilities.
The commitment consists of a US$454 million 12-year syndicated senior loan, and a US$40 million working capital facility.
Moly said that Hanlong Mining Investment, its major shareholder, will also provide a US$6 million junior subordinated loan to fulfill its US$500 million commitment.
"We are extremely proud to have completed these arrangements with CDB which are the culmination of outstanding but difficult work from the Moly Mines and Hanlong teams," said Moly Mines CEO and managing director, Dr Derek Fisher.
"Our partnership with CDB and Hanlong provides a major piece of non-dilutionary capital on terms that are unachievable and unavailable from western banks."
The company said there are a number of conditions that must be met before it draws down the syndicated facility, including verification that the mine is fully funded to positive cash flow.
In January, the company said that the appreciation in the Australian dollar against the US dollar was impacting the Spinifex project's financial model, lowering forecast returns.
Total capital and owners costs are now estimated at US$720 million, excluding working capital and debt service during construction. Construction of the mine and processing facilities will take approximately 24 months, once drawdown of the funds is available.
The company said the funds secured today will go a long way to financing the project, adding to existing cash on hand and future net iron ore revenues; however, additional money will also be required to fully fund the project.
Currently, discussions on how to secure these further funds are underway, with a final decision on the construction of the mine following shortly after.
Last month in a market update, Moly welcomed funds associated with EIG Global Energy Partners to the company's share register, after EIG exercised 19 million warrants.
The warrant holdings were from the US$150 million interim Financing facility entered into in September 2008, with another 4.9 million warrants still outstanding.
The share issue coincided with Moly shareholders re-appointing EIG’s nominee, Andy Zhmurovsky, to the board.
In addition to the molybdenum-copper deposits at Spinifex Ridge, the project also hosts a number of iron ore deposits, and in early March, the company secured export for iron ore to September 2015, with access to the Utah Point facility at Port Hedland.
In light of the molybdenum price volatility, the iron ore export agreement secures cash flows over the medium term for the project, and supplies funding for ongoing exploration and development.
Moly also made a US$10.3m shipment of Spinifex Ridge iron ore fines destined for China at the end of February. It expects the Spinifex Ridge mine production rate to reach 1 million tonnes per annum early in the second quarter.
At the start of May, Moly announced the confirmation that the CDB completed its credit approval process for the revised US$494 million in project finance facilities.
The commitment consists of a US$454 million 12-year syndicated senior loan, and a US$40 million working capital facility.
Moly said that Hanlong Mining Investment, its major shareholder, will also provide a US$6 million junior subordinated loan to fulfill its US$500 million commitment.
"We are extremely proud to have completed these arrangements with CDB which are the culmination of outstanding but difficult work from the Moly Mines and Hanlong teams," said Moly Mines CEO and managing director, Dr Derek Fisher.
"Our partnership with CDB and Hanlong provides a major piece of non-dilutionary capital on terms that are unachievable and unavailable from western banks."
The company said there are a number of conditions that must be met before it draws down the syndicated facility, including verification that the mine is fully funded to positive cash flow.
In January, the company said that the appreciation in the Australian dollar against the US dollar was impacting the Spinifex project's financial model, lowering forecast returns.
Total capital and owners costs are now estimated at US$720 million, excluding working capital and debt service during construction. Construction of the mine and processing facilities will take approximately 24 months, once drawdown of the funds is available.
The company said the funds secured today will go a long way to financing the project, adding to existing cash on hand and future net iron ore revenues; however, additional money will also be required to fully fund the project.
Currently, discussions on how to secure these further funds are underway, with a final decision on the construction of the mine following shortly after.
Last month in a market update, Moly welcomed funds associated with EIG Global Energy Partners to the company's share register, after EIG exercised 19 million warrants.
The warrant holdings were from the US$150 million interim Financing facility entered into in September 2008, with another 4.9 million warrants still outstanding.
The share issue coincided with Moly shareholders re-appointing EIG’s nominee, Andy Zhmurovsky, to the board.
In addition to the molybdenum-copper deposits at Spinifex Ridge, the project also hosts a number of iron ore deposits, and in early March, the company secured export for iron ore to September 2015, with access to the Utah Point facility at Port Hedland.
In light of the molybdenum price volatility, the iron ore export agreement secures cash flows over the medium term for the project, and supplies funding for ongoing exploration and development.
Moly also made a US$10.3m shipment of Spinifex Ridge iron ore fines destined for China at the end of February. It expects the Spinifex Ridge mine production rate to reach 1 million tonnes per annum early in the second quarter.
Tuesday, 28 June 2011
Ram Resources mobilises drill rig at Motzfeldt multi-element project in Greenland
Ram Resources (ASX: RMR) has commenced mobilisation of a drill rig for this year’s highly anticipated field season at its Motzfeldt multi-element project in Southern Greenland, and aims to start drilling on July 7.
The drilling will aim to generate data to use in calculating a maiden JORC Inferred Mineral Resource, as well as follow-up on regional targets. Ram expects the program to include 18 diamond drill holes for 3,200 metres.
Exploration work will focus on the Aries Prospect and some work is also planned at the Romney and Merino targets, which are located within a couple of kilometres of Aries.
Ram previously intercepted high grade rare earth elements (REE) including 25 metres at 5,031 parts per million (ppm) total rare earth oxides (TREO) and 20 metres at 4,852 ppm TREO at the Aries Prospect.
Exploration contractor Greenland Mining Services A/S has begun loading of the drill rig equipment at its base in Qaqortoq, which will be transported via landing craft to a location close to site, before transportation via helicopter to the Aries Prospect.
The key aims of the exploration program are to gather sufficient drill hole data to allow the estimation of the initial Mineral Resource and test the continuity of mineralisation along strike (north to south).
The program also intends to expand the sampled area to the west to better define the mineralised zone, improve mineralogical data on the prospect and further evaluate targets at Merino and Romney.
Previous exploration showed that there was a significant strike length of mineralisation at Aries that trended north-south for about 1.5 kilometres, of which about 200 metres was tested by previous drilling.
Drilling locations for this program aim to obtain mineralised intersections up to 500 metres to the north and 500 metres to the south of the previously drilled area.
Importantly, in 2010 work identified a potential REE dominant zone to the west of the drilled area at Aries which has potentially more than doubled the known mineralised width from around 200 metres to more than 400 metres.
As mineralisation may remain open to the west the company intends to further test this concept with surface sampling and, if warranted, additional drill holes located further to the west.
After the 2011 field season, the company plans to conduct gravity concentration and heavy mineral recovery metallurgical testwork on material from Aries.
Initial work by Angus & Ross in 2006 demonstrated some promising results for gravity concentration. A bulk sample of 200-300 kg will be collected for this purpose.
The Merino Prospect is located in steep terrain, some 2 kilometres from Aries and separated from it by an incised valley. Radiometrics have shown a large anomaly in this area dominated by altered syenite.
The Romney Prospect is about 2 kilometres to the southwest and 500 metres lower than Merino and, based on limited previous work, the company believes this area warrants further follow-up.
Planned activities at Merino and Romney will be to follow-up on previous work with the aim of improving the understanding of the local geology, expand the area that has been sampled with a view to determining if either of these prospects warrants drilling in subsequent years.
On May 16, Ram signed an agreement with the minority shareholders of Greenland Resources Limited (GRL) to vary terms for the acquisition of the remaining 49% of Motzfeldt multi element project in Southern Greenland.
Ram, which already holds 51% of the project, will have a 12 month option to acquire the remaining 49% in one transaction by issuing 200 million shares to the Vendor.
The variation offers improved terms for the acquisition, reduced complexity and greater flexibility in negotiating future corporate transactions in relation to development of the project.
If Ram is able to establish a Mineral Resource at its Aries Prospect at the end of the upcoming 2011 field season, a greater focus will be placed on potential development of the Motzfeldt Project.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17491/ram-resources-mobilises-drill-rig-at-motzfeldt-multi-element-project-in-greenland-17491.html
The drilling will aim to generate data to use in calculating a maiden JORC Inferred Mineral Resource, as well as follow-up on regional targets. Ram expects the program to include 18 diamond drill holes for 3,200 metres.
Exploration work will focus on the Aries Prospect and some work is also planned at the Romney and Merino targets, which are located within a couple of kilometres of Aries.
Ram previously intercepted high grade rare earth elements (REE) including 25 metres at 5,031 parts per million (ppm) total rare earth oxides (TREO) and 20 metres at 4,852 ppm TREO at the Aries Prospect.
Exploration contractor Greenland Mining Services A/S has begun loading of the drill rig equipment at its base in Qaqortoq, which will be transported via landing craft to a location close to site, before transportation via helicopter to the Aries Prospect.
The key aims of the exploration program are to gather sufficient drill hole data to allow the estimation of the initial Mineral Resource and test the continuity of mineralisation along strike (north to south).
The program also intends to expand the sampled area to the west to better define the mineralised zone, improve mineralogical data on the prospect and further evaluate targets at Merino and Romney.
Previous exploration showed that there was a significant strike length of mineralisation at Aries that trended north-south for about 1.5 kilometres, of which about 200 metres was tested by previous drilling.
Drilling locations for this program aim to obtain mineralised intersections up to 500 metres to the north and 500 metres to the south of the previously drilled area.
Importantly, in 2010 work identified a potential REE dominant zone to the west of the drilled area at Aries which has potentially more than doubled the known mineralised width from around 200 metres to more than 400 metres.
As mineralisation may remain open to the west the company intends to further test this concept with surface sampling and, if warranted, additional drill holes located further to the west.
After the 2011 field season, the company plans to conduct gravity concentration and heavy mineral recovery metallurgical testwork on material from Aries.
Initial work by Angus & Ross in 2006 demonstrated some promising results for gravity concentration. A bulk sample of 200-300 kg will be collected for this purpose.
The Merino Prospect is located in steep terrain, some 2 kilometres from Aries and separated from it by an incised valley. Radiometrics have shown a large anomaly in this area dominated by altered syenite.
The Romney Prospect is about 2 kilometres to the southwest and 500 metres lower than Merino and, based on limited previous work, the company believes this area warrants further follow-up.
Planned activities at Merino and Romney will be to follow-up on previous work with the aim of improving the understanding of the local geology, expand the area that has been sampled with a view to determining if either of these prospects warrants drilling in subsequent years.
On May 16, Ram signed an agreement with the minority shareholders of Greenland Resources Limited (GRL) to vary terms for the acquisition of the remaining 49% of Motzfeldt multi element project in Southern Greenland.
Ram, which already holds 51% of the project, will have a 12 month option to acquire the remaining 49% in one transaction by issuing 200 million shares to the Vendor.
The variation offers improved terms for the acquisition, reduced complexity and greater flexibility in negotiating future corporate transactions in relation to development of the project.
If Ram is able to establish a Mineral Resource at its Aries Prospect at the end of the upcoming 2011 field season, a greater focus will be placed on potential development of the Motzfeldt Project.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17491/ram-resources-mobilises-drill-rig-at-motzfeldt-multi-element-project-in-greenland-17491.html
Transit Holdings chairman boosts stake by 50,000 shares in on-market transaction
Transit Holdings (ASX: TRH) chairman Ananda Kathiravelu has increased his indirect stake in the company with an on-market trade.
Kathiravelu purchased 50,000 for a consideration of $26,875, for an average entry price of around $0.54.
Transit is currently in a very interesting exploration position, and earlier in the month was granted approval from the U.S. state of Utah to commence a maiden potash focused drill campaign at the joint venture Paradox Basin Potash project.
The approval was received within two months of filing the application and drilling will begin in July or August, consisting of four exploratory wells to augment a database of historical drilling.
Importantly, the company’s focus is on sylvinite, a high grade form of potash ore that is cheaper and more effective to process to a saleable form than any other form of potash ore.
Transit expects to have a JORC Resource after drilling the four holes and the analysis of subsequent results.
The company and joint venture partner, K2O Utah LLC, are currently preparing the budget and initial drill campaign as part of the project’s Pre–Feasibility Study.
The drill campaign follows a Scoping Study completed by the joint venture based on two million tonnes per annum production of KCl (potassium oxide) from solution mining of the potash deposit. The study demonstrated the project has robust financials.
The exploration target at the project is 2.3 billion tonnes of sylvinite potash ore grading at 32.8% KCl.
The exploration target assumes a grade thickness cut-off of 20% K2O per metre (grade by thickness), below which mineralisation is excluded from the estimate.
The joint venture will begin working on approvals to drill on federal land to further delineate the resource.
Transit holds a 90% stake in the project with K2O Utah LLC holding the remaining interest.
The project covers applications for 386 square kilometres of prospective potash permits in the Paradox Basin in southeast Utah and the project is in close proximity to infrastructure because of surrounding gas fields.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17487/transit-holdings-chairman-boosts-stake-by-50000-shares-in-on-market-transaction-17487.html
Kathiravelu purchased 50,000 for a consideration of $26,875, for an average entry price of around $0.54.
Transit is currently in a very interesting exploration position, and earlier in the month was granted approval from the U.S. state of Utah to commence a maiden potash focused drill campaign at the joint venture Paradox Basin Potash project.
The approval was received within two months of filing the application and drilling will begin in July or August, consisting of four exploratory wells to augment a database of historical drilling.
Importantly, the company’s focus is on sylvinite, a high grade form of potash ore that is cheaper and more effective to process to a saleable form than any other form of potash ore.
Transit expects to have a JORC Resource after drilling the four holes and the analysis of subsequent results.
The company and joint venture partner, K2O Utah LLC, are currently preparing the budget and initial drill campaign as part of the project’s Pre–Feasibility Study.
The drill campaign follows a Scoping Study completed by the joint venture based on two million tonnes per annum production of KCl (potassium oxide) from solution mining of the potash deposit. The study demonstrated the project has robust financials.
The exploration target at the project is 2.3 billion tonnes of sylvinite potash ore grading at 32.8% KCl.
The exploration target assumes a grade thickness cut-off of 20% K2O per metre (grade by thickness), below which mineralisation is excluded from the estimate.
The joint venture will begin working on approvals to drill on federal land to further delineate the resource.
Transit holds a 90% stake in the project with K2O Utah LLC holding the remaining interest.
The project covers applications for 386 square kilometres of prospective potash permits in the Paradox Basin in southeast Utah and the project is in close proximity to infrastructure because of surrounding gas fields.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17487/transit-holdings-chairman-boosts-stake-by-50000-shares-in-on-market-transaction-17487.html
Silver Lake Resources commences development on high grade ore from Haoma mine
Silver Lake Resources (ASX: SLR) has commenced initial ore development from the Haoma underground mine, which has the potential to become the next Daisy Milano size deposit at Mount Monger.
The Mount Monger operation previously contained the Daisy Milano and Daisy East underground mines, along with the Costello open pit, located 50 kilometres from Kalgoorlie in Western Australia.
Production is now being sourced from Daisy Milano, Daisy East, Rosemary and Haoma.
The Haoma deposit is an important part of Silver Lake's "Three Daisy Milano" strategy which has three independent mines accessed from the same decline infrastructure producing 60,000 ounces (oz) per annum each by 2014.
Initial ore development has commenced and the company said it still has two years to get the development in place and ramp the Haoma deposit up to 60,000 oz per annum.
The company is targeting to increase production from the Mount Monger Operations to 200,000 oz per annum by 2014 via mining from multiple underground and open pit ore sources.
Silver Lake’s Mount Monger operations have a current JORC Resource of 4.73 million tonnes at 8.7 grams per tonne (g/t) for 1.33 million oz of gold.
Les Davis, Silver Lake’s managing director, said “Haoma has the potential to become the next Daisy Milano size deposit and we look forward to further encouraging results as we continue ore development on the 32 level and receive assay results from the ongoing drilling program.”
Haoma is an historic underground mine located west of the Daisy Milano decline and the deposit was mined at a grade of 28.9 g/t gold down to a vertical depth of 180 metres until mining ceased due to tenement boundary constraints.
Haoma has a current JORC Resource of 109,300 tonnes at 18.7 g/t gold for 65,600 oz of gold and is subject to an ongoing underground drilling campaign.
An access drive has been completed to the Haoma 32 level from the Daisy Milano infrastructure about 420 metres below the historical workings.
Ore driving has now commenced and vein grades have returned assay results of 1,499 g/t gold over a vein width of 0.1 metres for the 32 level north face and 98 g/t gold over a vein width of 0.8 metres for the 32 level south face.
Based on the minimum mining width for ore development of 2.4 metres, the diluted mined grades for both these faces averages over 1 ounce of gold per tonne.
The completion of the ventilation shaft within Daisy Milano on time and on budget on June 21 was an important pre-cursor to Silver Lake increasing production to 200,000 ounces per annum.
The remaining requirement of upgrade and debottlenecking the Lakewood processing facility is on target.
Under the guidance of Les Davis Silver Lake has continued to "tick all boxes" over the past 2-3 years.
The recent market malaise provides an opportunity for investors to re-assess Silver Lake and benefit from its growing production profile.
Investors may benefit as companies like Silver Lake could well be re-rated due to continuing consolidation within the gold sector.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17481/silver-lake-resources-commences-development-on-high-grade-ore-from-haoma-mine-17481.html
The Mount Monger operation previously contained the Daisy Milano and Daisy East underground mines, along with the Costello open pit, located 50 kilometres from Kalgoorlie in Western Australia.
Production is now being sourced from Daisy Milano, Daisy East, Rosemary and Haoma.
The Haoma deposit is an important part of Silver Lake's "Three Daisy Milano" strategy which has three independent mines accessed from the same decline infrastructure producing 60,000 ounces (oz) per annum each by 2014.
Initial ore development has commenced and the company said it still has two years to get the development in place and ramp the Haoma deposit up to 60,000 oz per annum.
The company is targeting to increase production from the Mount Monger Operations to 200,000 oz per annum by 2014 via mining from multiple underground and open pit ore sources.
Silver Lake’s Mount Monger operations have a current JORC Resource of 4.73 million tonnes at 8.7 grams per tonne (g/t) for 1.33 million oz of gold.
Les Davis, Silver Lake’s managing director, said “Haoma has the potential to become the next Daisy Milano size deposit and we look forward to further encouraging results as we continue ore development on the 32 level and receive assay results from the ongoing drilling program.”
Haoma is an historic underground mine located west of the Daisy Milano decline and the deposit was mined at a grade of 28.9 g/t gold down to a vertical depth of 180 metres until mining ceased due to tenement boundary constraints.
Haoma has a current JORC Resource of 109,300 tonnes at 18.7 g/t gold for 65,600 oz of gold and is subject to an ongoing underground drilling campaign.
An access drive has been completed to the Haoma 32 level from the Daisy Milano infrastructure about 420 metres below the historical workings.
Ore driving has now commenced and vein grades have returned assay results of 1,499 g/t gold over a vein width of 0.1 metres for the 32 level north face and 98 g/t gold over a vein width of 0.8 metres for the 32 level south face.
Based on the minimum mining width for ore development of 2.4 metres, the diluted mined grades for both these faces averages over 1 ounce of gold per tonne.
The completion of the ventilation shaft within Daisy Milano on time and on budget on June 21 was an important pre-cursor to Silver Lake increasing production to 200,000 ounces per annum.
The remaining requirement of upgrade and debottlenecking the Lakewood processing facility is on target.
Under the guidance of Les Davis Silver Lake has continued to "tick all boxes" over the past 2-3 years.
The recent market malaise provides an opportunity for investors to re-assess Silver Lake and benefit from its growing production profile.
Investors may benefit as companies like Silver Lake could well be re-rated due to continuing consolidation within the gold sector.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17481/silver-lake-resources-commences-development-on-high-grade-ore-from-haoma-mine-17481.html
Peninsula Energy moves closer to technical and environmental review at Ross uranium project
Peninsula Energy (ASX: PEN) has had its application for a Combined Source and 11e.(2) Byproduct Material License accepted by the U.S. Nuclear Regulatory Commission (NRC), completing another major regulatory milestone for its Ross in-situ uranium recovery (ISR) Project.
The application was made through its wholly-owned U.S. subsidiary Strata Energy Inc. on 31 December, 2010, and requested authorization to construct and operate an ISR facility at Ross, located near Oshoto, in northeastern Wyoming.
The acceptance review was completed ahead of schedule and keeps the Ross Project on track. It was performed to confirm the completeness and technical adequacy of the application, which will now undergo a formal, detailed technical and environmental review.
Peninsula is targeting commencement of uranium recovery at the Ross Project in 2012.
Gus Simpson, Peninsula's executive chairman said “throughout the permitting process Strata has established strong lines of communication with the various regulatory bodies and has submitted high-quality applications which have resulted in an efficient, timely review process.
"The early acceptance of this application is a strong indicator of the overall document quality, which is expected to result in minimal requests for additional Information during the full review.”
The proposed facility would consist of wellfields, pipelines and a central plant to process extracted uranium into yellowcake for commercial use in nuclear power plants.
The Ross Project forms the core of the greater Lance Project, with primary mineral processing activities centered in this initial production area.
The NRC will conduct a public meeting on 7 July 2011 to discuss results of the acceptance review and paths forward for both the environmental and technical evaluations.
Peninsula plans to join other successful uranium producers in Wyoming and intends to use the most environmentally benign uranium recovery process available.
In February Peninsula signed a first sales agreement to supply 1.15 million pounds of uranium oxide over seven years to a Tier 1 power utility in the U.S., representing a significant milestone for the company as it will generate short term cash flows.
Peninsula has targeted 2012 to begin producing uranium from the Lance projects, and aims to become one of the largest producers of uranium in the U.S.
On June 17 Peninsula Energy upgraded the JORC Resource Estimate for the Lance uranium projects to 41.4 million pounds (Mlbs) uranium (U3O8).
Peninsula has built a globally significant uranium resource and project at Lance. The upgrade added to the Indicated and Measured Resource and enhances confidence in the project.
Importantly, the Definitive Feasibility Study (DFS) incorporating the updated resource calculation is expected shortly.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17485/peninsula-energy-moves-closer-to-technical-and-environmental-review-at-ross-uranium-project--17485.html
The application was made through its wholly-owned U.S. subsidiary Strata Energy Inc. on 31 December, 2010, and requested authorization to construct and operate an ISR facility at Ross, located near Oshoto, in northeastern Wyoming.
The acceptance review was completed ahead of schedule and keeps the Ross Project on track. It was performed to confirm the completeness and technical adequacy of the application, which will now undergo a formal, detailed technical and environmental review.
Peninsula is targeting commencement of uranium recovery at the Ross Project in 2012.
Gus Simpson, Peninsula's executive chairman said “throughout the permitting process Strata has established strong lines of communication with the various regulatory bodies and has submitted high-quality applications which have resulted in an efficient, timely review process.
"The early acceptance of this application is a strong indicator of the overall document quality, which is expected to result in minimal requests for additional Information during the full review.”
The proposed facility would consist of wellfields, pipelines and a central plant to process extracted uranium into yellowcake for commercial use in nuclear power plants.
The Ross Project forms the core of the greater Lance Project, with primary mineral processing activities centered in this initial production area.
The NRC will conduct a public meeting on 7 July 2011 to discuss results of the acceptance review and paths forward for both the environmental and technical evaluations.
Peninsula plans to join other successful uranium producers in Wyoming and intends to use the most environmentally benign uranium recovery process available.
In February Peninsula signed a first sales agreement to supply 1.15 million pounds of uranium oxide over seven years to a Tier 1 power utility in the U.S., representing a significant milestone for the company as it will generate short term cash flows.
Peninsula has targeted 2012 to begin producing uranium from the Lance projects, and aims to become one of the largest producers of uranium in the U.S.
On June 17 Peninsula Energy upgraded the JORC Resource Estimate for the Lance uranium projects to 41.4 million pounds (Mlbs) uranium (U3O8).
Peninsula has built a globally significant uranium resource and project at Lance. The upgrade added to the Indicated and Measured Resource and enhances confidence in the project.
Importantly, the Definitive Feasibility Study (DFS) incorporating the updated resource calculation is expected shortly.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17485/peninsula-energy-moves-closer-to-technical-and-environmental-review-at-ross-uranium-project--17485.html
Continental Coal reaches landmark Black Economic Empowerment investment agreement
Continental Coal (ASX: CCC) has reached an agreement with a Broad Based Black Economic Empowerment Group (BBBEE) to acquire the existing 26% Black Economic Empowerment equity interest in the company’s South African subsidiary, Continental Coal Limited (CCL).
As part of the agreement, BBBEE will repay ZAR140 million (around US$20 million) and the balance of ZAR75 million to be vendor financed upon deal completion scheduled for August 2011.
Continental has said that the company will re-invest the US$20 million loan repayment into its South African business, and aggressively advance a number of its projects and initiatives.
The agreement, which has received all relevant due diligence and respective board approvals, is subject to execution of relevant formal documentation and receipt of any applicable governmental approvals.
Upon completion of the formal documentation process it is expected that a formal announcement of the BBBEE party will be made.
Documentation and settlement of the agreement is anticipated to be completed by August 2011.
Following completion of the transaction, the BBBEE will have the right to appoint one director to the company’s board and two directors to the board of the company’s South African subsidiary, CCL.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17484/continental-coal-reaches-landmark-black-economic-empowerment-investment-agreement-17484.html
As part of the agreement, BBBEE will repay ZAR140 million (around US$20 million) and the balance of ZAR75 million to be vendor financed upon deal completion scheduled for August 2011.
Continental has said that the company will re-invest the US$20 million loan repayment into its South African business, and aggressively advance a number of its projects and initiatives.
The agreement, which has received all relevant due diligence and respective board approvals, is subject to execution of relevant formal documentation and receipt of any applicable governmental approvals.
Upon completion of the formal documentation process it is expected that a formal announcement of the BBBEE party will be made.
Documentation and settlement of the agreement is anticipated to be completed by August 2011.
Following completion of the transaction, the BBBEE will have the right to appoint one director to the company’s board and two directors to the board of the company’s South African subsidiary, CCL.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17484/continental-coal-reaches-landmark-black-economic-empowerment-investment-agreement-17484.html
Continental Coal snares improved bank funding terms for Penumbra Mine development
Continental Coal (ASX: CCC) has received a further offer of financing that could potentially allow the development of the Penumbra Mine to be completed in a more capital efficient manner.
The Penumbra Coal Project in South Africa is the company’s third thermal coal mining operation. The proposed debt funding and related coal, foreign exchange and interest risk management facilities will be used for the development of the project.
On 2 June 2011, the company received a committed offer of a 4 year, US$25 million secured project loan facility to be used to fund the construction of the project and associated risk management facilities to hedge the company’s US$:ZAR exposure and the risk of a sustained fall in thermal coal prices.
The new offer of finance, offering more attractive terms for the company, has been received from ABSA Capital, a division of ABSA Bank Limited, one of South Africa’s largest financial service providers and a subsidiary of Barclays Bank PLC.
Significantly, the financing with ABSA Capital and the additional committed offer of debt funding underlines the technical fundamentals of Continental Coal and its Penumbra Mine development.
Jason Brewer, Continental Coal's executive director, said "the management team in South Africa has worked closely with ABSA Capital and continues to make good progress with all the material aspects of the financing having been agreed and approved.
"The loan documentation process is well advanced and we look forward to bringing this rigorous process to a close next month.”
Continental Coal said it will continue to look at ways to optimise its ongoing funding arrangements to meet the aggressive mine development schedule that it has set.
The offer of finance comprises:
- A secured 7 year term loan facility of US$35 million to be made available to fund the development of the Penumbra Mine.
- A secured 3 year term loan facility of US$15 million to be made available to refinance existing secured indebtedness under the EDF Trading Coal Prepayment.
- A secured annually renewable working capital facility of ZAR100 million (approx. US$15 million) to fund general corporate working capital requirements.
In addition ABSA Capital will provide risk management facilities to allow the company and its subsidiaries to hedge a portion of its exposure to thermal coal prices and interest rate fluctuations.
The facilities have received in-principle credit approval and drawdown of the facility is subject to completion of all necessary due diligences, conclusion of legal documentation and fulfilment of conditions precedent that are standard for facilities of this nature.
Legal documentation and satisfaction of the outstanding due diligence sign offs is advanced and scheduled for completion by 31 July 2011.
The facilities have been structured to reduce dilution to existing shareholders and importantly there no share or option equity participation rights under the facility terms.
Continental Coal is looking to finalise its debt funding arrangements for the Penumubra Mine with the final selection of its preferred financier and a drawdown of finance in the September 2011 quarter, following finalisation of documentation and satisfaction of all conditions precedent.
The Penumbra Coal Project is forecast to produce 500,000 tonnes per annum (tpa) of a primary export thermal coal product and 120,000tpa of a secondary domestic quality thermal coal product.
Significantly, export thermal coal will be railed from the company’s existing rail siding, through to RBCT under existing rail contracts with Transnet Freight Rail and sold to EDF Trading under the Company’s existing coal off take agreement.
Average total FOB costs, for the primary export coal product, of about US$61/t in real 2009 terms are forecast over the mine life.
The company now expects first coal production from Penumbra in early 2012, ramping up to reach full production in the third quarter of 2012.
The company has an impressive pipeline of robust, long life projects and within 18 months, Continental should have four mines in production with Penumbra next in line, followed closely by De Wittekrans.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17489/continental-coal-snares-improved-bank-funding-terms-for-penumbra-mine-development-17489.html
The Penumbra Coal Project in South Africa is the company’s third thermal coal mining operation. The proposed debt funding and related coal, foreign exchange and interest risk management facilities will be used for the development of the project.
On 2 June 2011, the company received a committed offer of a 4 year, US$25 million secured project loan facility to be used to fund the construction of the project and associated risk management facilities to hedge the company’s US$:ZAR exposure and the risk of a sustained fall in thermal coal prices.
The new offer of finance, offering more attractive terms for the company, has been received from ABSA Capital, a division of ABSA Bank Limited, one of South Africa’s largest financial service providers and a subsidiary of Barclays Bank PLC.
Significantly, the financing with ABSA Capital and the additional committed offer of debt funding underlines the technical fundamentals of Continental Coal and its Penumbra Mine development.
Jason Brewer, Continental Coal's executive director, said "the management team in South Africa has worked closely with ABSA Capital and continues to make good progress with all the material aspects of the financing having been agreed and approved.
"The loan documentation process is well advanced and we look forward to bringing this rigorous process to a close next month.”
Continental Coal said it will continue to look at ways to optimise its ongoing funding arrangements to meet the aggressive mine development schedule that it has set.
The offer of finance comprises:
- A secured 7 year term loan facility of US$35 million to be made available to fund the development of the Penumbra Mine.
- A secured 3 year term loan facility of US$15 million to be made available to refinance existing secured indebtedness under the EDF Trading Coal Prepayment.
- A secured annually renewable working capital facility of ZAR100 million (approx. US$15 million) to fund general corporate working capital requirements.
In addition ABSA Capital will provide risk management facilities to allow the company and its subsidiaries to hedge a portion of its exposure to thermal coal prices and interest rate fluctuations.
The facilities have received in-principle credit approval and drawdown of the facility is subject to completion of all necessary due diligences, conclusion of legal documentation and fulfilment of conditions precedent that are standard for facilities of this nature.
Legal documentation and satisfaction of the outstanding due diligence sign offs is advanced and scheduled for completion by 31 July 2011.
The facilities have been structured to reduce dilution to existing shareholders and importantly there no share or option equity participation rights under the facility terms.
Continental Coal is looking to finalise its debt funding arrangements for the Penumubra Mine with the final selection of its preferred financier and a drawdown of finance in the September 2011 quarter, following finalisation of documentation and satisfaction of all conditions precedent.
The Penumbra Coal Project is forecast to produce 500,000 tonnes per annum (tpa) of a primary export thermal coal product and 120,000tpa of a secondary domestic quality thermal coal product.
Significantly, export thermal coal will be railed from the company’s existing rail siding, through to RBCT under existing rail contracts with Transnet Freight Rail and sold to EDF Trading under the Company’s existing coal off take agreement.
Average total FOB costs, for the primary export coal product, of about US$61/t in real 2009 terms are forecast over the mine life.
The company now expects first coal production from Penumbra in early 2012, ramping up to reach full production in the third quarter of 2012.
The company has an impressive pipeline of robust, long life projects and within 18 months, Continental should have four mines in production with Penumbra next in line, followed closely by De Wittekrans.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17489/continental-coal-snares-improved-bank-funding-terms-for-penumbra-mine-development-17489.html
Greenearth Energy in pre-open pending 'material contractual agreement'
Greenearth Energy (ASX: GER) has been granted a trading halt by the ASX, with the company's shares placed in pre-open.
Greenearth requested the halt pending an announcement 'concerning a material contractual agreement which relates to the company's ongoing investigations into CO2 conversion technology.'
The trading halt will be lifted at the earlier of the announcement made to the market, or trading commencing on Friday 1 July.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17483/greenearth-energy-in-pre-open-pending-material-contractual-agreement-17483.html
Greenearth requested the halt pending an announcement 'concerning a material contractual agreement which relates to the company's ongoing investigations into CO2 conversion technology.'
The trading halt will be lifted at the earlier of the announcement made to the market, or trading commencing on Friday 1 July.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17483/greenearth-energy-in-pre-open-pending-material-contractual-agreement-17483.html
Kentor Gold updates market on Andash Project in Kyrgyz Republic
Kentor Gold (ASX: KGL) has advised the market that a resolution appears to have been adopted in the Kyrgyz Parliament relating to the Andash Project.
Although it is believed that the Kyrgyz Government will reject the Parliament’s resolution, it does call for the suspension of all activities related to the development of the Andash gold‐copper project, revocation of all permits and cancellation of the land use permit
The Department of Natural Resources has written to Kentor today stating that at present it “...has no information on and sees no causes for early cancellation of the license.”
Mining licences and land use permits are the responsibility of the Executive Government through the Department of Natural Resources.
Kentor has a long established presence in the country, with Andash expected to create 450 jobs and contribute around $200 million to the national budget over the initial six year life.
Kentor's advanced plans for early gold production in Australia
Kentor announced earlier in the month that the company has advanced plans for early gold production at the 516,000 gold ounce Burnakurra mine by spending A$1.3 million for the acquisition of plant and equipment.
The purchase was made from the company's cash reserves.
The acquisition is another step for Kentor towards gold production in the June quarter of 2012, with a Feasibility Study forecast to be delivered in the September quarter of 2011.
The new equipment included:
- A two stage crushing plant;
- Heap leaching equipment including an agglomerator, conveyors and stacker;
- Carbon absorption tanks; and
- Elution column and gold room.
The elution column and gold room will be used in the processing circuit, which provides Kentor with a cost effective means of re-commissioning the plant.
The crushing equipment will upgrade the throughput capacity of the plant and Kentor said the heap leaching equipment could be used to establish a heap leaching operation to treat the low grade ore at Burnakurra.
Burnakura currently has an Inferred resource of; 10.6 million tonnes at 1.5 grams per tonne (g/t) gold for 516,000 ounces, with a 0.5g/t cut-off.
Kentor is also moving towards an initial resource estimate at the Jervois copper project, which is anticipated to be released in the first half of July 2011.
Jervois covers 38 square kilometres and consists of a 12 kilometre strike length where Kentor said a number of copper–gold and separate silver–lead–zinc prospects have been identified.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17482/kentor-gold-updates-market-on-andash-project-in-kyrgyz-republic-17482.html
Although it is believed that the Kyrgyz Government will reject the Parliament’s resolution, it does call for the suspension of all activities related to the development of the Andash gold‐copper project, revocation of all permits and cancellation of the land use permit
The Department of Natural Resources has written to Kentor today stating that at present it “...has no information on and sees no causes for early cancellation of the license.”
Mining licences and land use permits are the responsibility of the Executive Government through the Department of Natural Resources.
Kentor has a long established presence in the country, with Andash expected to create 450 jobs and contribute around $200 million to the national budget over the initial six year life.
Kentor's advanced plans for early gold production in Australia
Kentor announced earlier in the month that the company has advanced plans for early gold production at the 516,000 gold ounce Burnakurra mine by spending A$1.3 million for the acquisition of plant and equipment.
The purchase was made from the company's cash reserves.
The acquisition is another step for Kentor towards gold production in the June quarter of 2012, with a Feasibility Study forecast to be delivered in the September quarter of 2011.
The new equipment included:
- A two stage crushing plant;
- Heap leaching equipment including an agglomerator, conveyors and stacker;
- Carbon absorption tanks; and
- Elution column and gold room.
The elution column and gold room will be used in the processing circuit, which provides Kentor with a cost effective means of re-commissioning the plant.
The crushing equipment will upgrade the throughput capacity of the plant and Kentor said the heap leaching equipment could be used to establish a heap leaching operation to treat the low grade ore at Burnakurra.
Burnakura currently has an Inferred resource of; 10.6 million tonnes at 1.5 grams per tonne (g/t) gold for 516,000 ounces, with a 0.5g/t cut-off.
Kentor is also moving towards an initial resource estimate at the Jervois copper project, which is anticipated to be released in the first half of July 2011.
Jervois covers 38 square kilometres and consists of a 12 kilometre strike length where Kentor said a number of copper–gold and separate silver–lead–zinc prospects have been identified.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17482/kentor-gold-updates-market-on-andash-project-in-kyrgyz-republic-17482.html
Rey Resources in pre-open pending capital raising announcement
Rey Resources (ASX: REY) has been granted a trading halt by the ASX pending a capital raising announcement, with the company's shares placed in pre-open.
Rey has not yet indicated where the new capital injection will be allocated, but the company earlier this week reached a Definitive Feasibility Study milestone at Duchess Paradise.
The study, which commenced in early 2010, proposes a highwall mining operation producing 2.0 to 2.5 million tonnes of 5,500 kcal/kg thermal coal per year to be exported via the company’s existing port infrastructure at Derby in Western Australia.
The study was undertaken by consultants Marshall Miller & Associates Inc. and confirms the prospect of a longer life project and increased economic and employment opportunities for the area.
It proposes an initial operation with a longer mine life of at least 10 years, an ungeared NPV (10% discount rate) of A$176 million (after taxes and MRRT), an internal rate of return of 27%, and a payback of 3.4 years.
Significantly, Rey is now looking to extend the mine life beyond 10 years through further exploration of the company's land holding.
Production costs are estimated at A$70 per tonne.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17480/rey-resources-in-pre-open-pending-capital-raising-announcement-17480.html
Rey has not yet indicated where the new capital injection will be allocated, but the company earlier this week reached a Definitive Feasibility Study milestone at Duchess Paradise.
The study, which commenced in early 2010, proposes a highwall mining operation producing 2.0 to 2.5 million tonnes of 5,500 kcal/kg thermal coal per year to be exported via the company’s existing port infrastructure at Derby in Western Australia.
The study was undertaken by consultants Marshall Miller & Associates Inc. and confirms the prospect of a longer life project and increased economic and employment opportunities for the area.
It proposes an initial operation with a longer mine life of at least 10 years, an ungeared NPV (10% discount rate) of A$176 million (after taxes and MRRT), an internal rate of return of 27%, and a payback of 3.4 years.
Significantly, Rey is now looking to extend the mine life beyond 10 years through further exploration of the company's land holding.
Production costs are estimated at A$70 per tonne.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17480/rey-resources-in-pre-open-pending-capital-raising-announcement-17480.html
Montezuma Mining Company manganese bulk tonnage potential grows at Butcherbird
Montezuma Mining Company (ASX: MZM) is expecting results shortly from the completed manganese focused reverse circulation drilling program at the highly prospective Butcherbird Manganese/Copper Project.
Importantly with the priority targets drilled, visual logging confirms significant manganese mineralisation at Mundawindi, Coodamudgi, Ritchies Find, Ilgarrarie Hill, Cadgies Flat and Ilgarrarie Ridge prospects.
The program comprised 110 holes for 3233 metres, with significant manganese mineralisation intersected in several areas coincident with EM anomalies.
Montezuma said that the mineralisation encountered is consistent with the style identified to date within the project, further confirming the large tonnage potential of Butcherbird.
In addition to the manganese work, a planned ground IP survey over Butcherbird will be conducted in late July 2011.
This was originally scheduled to be completed in parallel with the manganese drilling program, but gear failure prevented the contractor from finishing on schedule.
The IP survey is targeting to identify the highest priority zones along 4 kilometres of strike over which the target shear zone can be traced.
Limited drilling along this target corridor in 2010 confirmed the presence of a significant zone of copper sulphide mineralisation and it is regarded as a priority exploration target.
Drilling of these targets will be completed once the IP program is complete.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17477/montezuma-mining-company-manganese-bulk-tonnage-potential-grows-at-butcherbird-17477.html
Importantly with the priority targets drilled, visual logging confirms significant manganese mineralisation at Mundawindi, Coodamudgi, Ritchies Find, Ilgarrarie Hill, Cadgies Flat and Ilgarrarie Ridge prospects.
The program comprised 110 holes for 3233 metres, with significant manganese mineralisation intersected in several areas coincident with EM anomalies.
Montezuma said that the mineralisation encountered is consistent with the style identified to date within the project, further confirming the large tonnage potential of Butcherbird.
In addition to the manganese work, a planned ground IP survey over Butcherbird will be conducted in late July 2011.
This was originally scheduled to be completed in parallel with the manganese drilling program, but gear failure prevented the contractor from finishing on schedule.
The IP survey is targeting to identify the highest priority zones along 4 kilometres of strike over which the target shear zone can be traced.
Limited drilling along this target corridor in 2010 confirmed the presence of a significant zone of copper sulphide mineralisation and it is regarded as a priority exploration target.
Drilling of these targets will be completed once the IP program is complete.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17477/montezuma-mining-company-manganese-bulk-tonnage-potential-grows-at-butcherbird-17477.html
Moly Mines signs landmark financing deal of US$494 million for the construction of Spinifex Ridge
Moly Mines (ASX: MOL, TSX: MOL) can now move towards unlocking the cash flow potential of the Spinifex Ridge Molybdenum / Copper mine in the Pilbara, with the landmark US$494m financing deal for construction of the project.
The facilities consist of a US$454 million syndicated facility agreement (SFA) and a US$40 million working capital facility with China Development Bank Corporation (CDB).
Hanlong Mining Investment Pty Ltd (Hanlong) will also provide a US$6 million junior subordinated loan on terms consistent with the SFA over the coming months to fulfil Hanlong’s US$500 million commitment to Moly.
Derek Fisher, managing director for Moly, said "Our partnership with CDB and Hanlong provides a major piece of non-dilutionary capital on terms that are unachievable and unavailable from western banks."
There are a number of conditions which need to be met before Moly can draw down on the funds under the SFA, including verification that the mine is fully funded through to positive cashflow.
Moly disclosed in January 2011 that the appreciation in the Australian dollar against the US dollar was impacting on the project financial model and had lowered forecast returns.
Total capital and owners costs, based on the engineering, procurement and construction (EPC) contract awarded in May 2011, are estimated at US$720 million, excluding working capital and debt service during construction.
Moly said the total financing facilities of US$500 million, existing cash on hand and forecast net iron ore revenues will contribute to the total funding required however, there will be additional funds required to ensure the project is fully funded.
Moly and Hanlong are in discussions on how additional funds may be secured and a final investment decision leading to construction at Spinifex Ridge awaits the outcome of these discussions.
Steven Xiao, managing director of Hanlong, commented on his support for the project saying, “We’re extremely pleased that 12 months of continuous effort with the Moly Mines team has culminated in the execution of the finance facilities with CDB.
"Hanlong will continue its support for Moly Mines and the team led by Derek Fisher as we jointly pursue a number of growth opportunities."
SFA Key Commercial Terms
- The SFA is a senior secured 12 year finance facility with a two year availability period for drawdown, due for repayment in full by 30 June 2023, with interest charged at 3.8% over the six month US$ LIBOR rate (currently 0.39%).
- The facility will expire if conditions precedent to drawdown are not satisfied or waived by 13 May 2012, with a commitment fee of 1% per annum on undrawn amounts, commencing upon first utilisation.
The security package required by CDB includes
- Fixed and floating charges granted by Moly and its subsidiaries over its respective assets.
- A mortgage to be provided by Hanlong over its shares in Moly.
- Project and corporate guarantees provided by Moly and its subsidiaries and to be provided by Sichuan Hanlong Group Co Ltd and certain of its subsidiaries.
- Project completion undertakings and capital cost overrun support to be provided by Sichuan Hanlong Group Co Ltd.
- Personal guarantees to be provided by Mr Liu Han.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17479/moly-mines-signs-landmark-financing-deal-of-us494-million-for-the-construction-of-spinifex-ridge-17479.html
The facilities consist of a US$454 million syndicated facility agreement (SFA) and a US$40 million working capital facility with China Development Bank Corporation (CDB).
Hanlong Mining Investment Pty Ltd (Hanlong) will also provide a US$6 million junior subordinated loan on terms consistent with the SFA over the coming months to fulfil Hanlong’s US$500 million commitment to Moly.
Derek Fisher, managing director for Moly, said "Our partnership with CDB and Hanlong provides a major piece of non-dilutionary capital on terms that are unachievable and unavailable from western banks."
There are a number of conditions which need to be met before Moly can draw down on the funds under the SFA, including verification that the mine is fully funded through to positive cashflow.
Moly disclosed in January 2011 that the appreciation in the Australian dollar against the US dollar was impacting on the project financial model and had lowered forecast returns.
Total capital and owners costs, based on the engineering, procurement and construction (EPC) contract awarded in May 2011, are estimated at US$720 million, excluding working capital and debt service during construction.
Moly said the total financing facilities of US$500 million, existing cash on hand and forecast net iron ore revenues will contribute to the total funding required however, there will be additional funds required to ensure the project is fully funded.
Moly and Hanlong are in discussions on how additional funds may be secured and a final investment decision leading to construction at Spinifex Ridge awaits the outcome of these discussions.
Steven Xiao, managing director of Hanlong, commented on his support for the project saying, “We’re extremely pleased that 12 months of continuous effort with the Moly Mines team has culminated in the execution of the finance facilities with CDB.
"Hanlong will continue its support for Moly Mines and the team led by Derek Fisher as we jointly pursue a number of growth opportunities."
SFA Key Commercial Terms
- The SFA is a senior secured 12 year finance facility with a two year availability period for drawdown, due for repayment in full by 30 June 2023, with interest charged at 3.8% over the six month US$ LIBOR rate (currently 0.39%).
- The facility will expire if conditions precedent to drawdown are not satisfied or waived by 13 May 2012, with a commitment fee of 1% per annum on undrawn amounts, commencing upon first utilisation.
The security package required by CDB includes
- Fixed and floating charges granted by Moly and its subsidiaries over its respective assets.
- A mortgage to be provided by Hanlong over its shares in Moly.
- Project and corporate guarantees provided by Moly and its subsidiaries and to be provided by Sichuan Hanlong Group Co Ltd and certain of its subsidiaries.
- Project completion undertakings and capital cost overrun support to be provided by Sichuan Hanlong Group Co Ltd.
- Personal guarantees to be provided by Mr Liu Han.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/17479/moly-mines-signs-landmark-financing-deal-of-us494-million-for-the-construction-of-spinifex-ridge-17479.html
Plato Gold completes sale of 24 Harker Garrison claims to Northern Gold
Plato Gold (CVE:PGC) said Tuesday it has completed the sale of its 24 Harker Garrison claims in northern Ontario to Northern Gold Mining (CVE:NGM), as announced in late May.
"I am very pleased to have completed this deal with Northern Gold," said Anthony J. Cohen, president and CEO of Plato Gold Corp.
"Together with our recent option agreements with St. Andrews Goldfields and Threegold Resources, we are participating in many top quality gold projects with other leading companies, as well as growing our own high potential gold developments."
The 24 claims were sold for a cash payment of $72,000, as well as 175,000 common shares of Northern Gold. The agreement is also subject to an underlying 2% gross metals return royalty on all metals produced from the property, and is held by Geoconseils Jack Stoch Ltee.
Plato Gold is a Canadian gold exploration company with exploration projects in northern Ontario and Quebec, in addition to its Lolita property in the province of Santa Cruz, Argentina.
Last November, Plato signed a deal giving St Andrew Goldfields (TSE:SAS) the option to earn a 75% stake in four of its five northern Ontario properties, as well as a similar agreement with Threegold for two of its seven northern Quebec assets.
"I am very pleased to have completed this deal with Northern Gold," said Anthony J. Cohen, president and CEO of Plato Gold Corp.
"Together with our recent option agreements with St. Andrews Goldfields and Threegold Resources, we are participating in many top quality gold projects with other leading companies, as well as growing our own high potential gold developments."
The 24 claims were sold for a cash payment of $72,000, as well as 175,000 common shares of Northern Gold. The agreement is also subject to an underlying 2% gross metals return royalty on all metals produced from the property, and is held by Geoconseils Jack Stoch Ltee.
Plato Gold is a Canadian gold exploration company with exploration projects in northern Ontario and Quebec, in addition to its Lolita property in the province of Santa Cruz, Argentina.
Last November, Plato signed a deal giving St Andrew Goldfields (TSE:SAS) the option to earn a 75% stake in four of its five northern Ontario properties, as well as a similar agreement with Threegold for two of its seven northern Quebec assets.
Rare Element Resources begins drilling at Bear Lodge
Rare Element Resources (TSE:RES) (AMEX:REE) announced Tuesday it has begun its 2011 rare earth drilling program at its Bear Lodge property in northeastern Wyoming.
The company will test the Bull Hill and Whitetail Ridge rare earth element (REE) targets. Three core drilling rigs, two of which are already at the property, will test 40 angle drill holes to depths of between 400 and 1,200 feet.
REEs are key components in several 'green' technologies, including hybrid and electric automobiles and advanced wind turbines, and have several military applications. China currently produces over 95% of the 130,000 tonnes of REEs consumed globally each year.
Rare Element said it hopes to expand and upgrade the resources at Bull Hill and Whitetail Ridge. Currently, the Bear Lodge property hosts 4.9 million tonnes at 3.77% rare earth oxide (REO) in the indicated category, and 17.81 million tonnes at 3.03% REO in the inferred category.
"Rare Element is conducting its 2011 development and exploration drilling programs on the Bull Hill area and Whitetail Ridge rare earth deposits in anticipation of a prefeasibility study scheduled for completion during the first quarter of 2012," said vice president of exploration, Jim Clark.
The Vancouver, B.C.-based company said it hopes to increase the indicated REE resources to use in its prefeasibility study. Rare Element will also use mapping, sampling and surveys to further delineate current targets and identify new ones.
The company will test the Bull Hill and Whitetail Ridge rare earth element (REE) targets. Three core drilling rigs, two of which are already at the property, will test 40 angle drill holes to depths of between 400 and 1,200 feet.
REEs are key components in several 'green' technologies, including hybrid and electric automobiles and advanced wind turbines, and have several military applications. China currently produces over 95% of the 130,000 tonnes of REEs consumed globally each year.
Rare Element said it hopes to expand and upgrade the resources at Bull Hill and Whitetail Ridge. Currently, the Bear Lodge property hosts 4.9 million tonnes at 3.77% rare earth oxide (REO) in the indicated category, and 17.81 million tonnes at 3.03% REO in the inferred category.
"Rare Element is conducting its 2011 development and exploration drilling programs on the Bull Hill area and Whitetail Ridge rare earth deposits in anticipation of a prefeasibility study scheduled for completion during the first quarter of 2012," said vice president of exploration, Jim Clark.
The Vancouver, B.C.-based company said it hopes to increase the indicated REE resources to use in its prefeasibility study. Rare Element will also use mapping, sampling and surveys to further delineate current targets and identify new ones.
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