TIDMHMB
16 January 2012
Hambledon Mining Plc
("Hambledon" or the "Company")
Activities Report for the Quarter Ended 31 December 2011
Hambledon Mining plc (AIM: HMB), the Kazakhstan gold mining and
development company, today reports on its operations and corporate
highlights for the three months from 1 October to 31 December 2011.
A copy of this report will be available on the Company's website,
www.hambledon-mining.com.
Operational and Corporate Highlights:
-- Initial contribution from underground ore increased overall Au grade
by 22 per cent. compared to quarterly results in Q3 2011;
Crushing and
screening plant performing exceptionally well during winter
period;
-- Excess waste ore removal to be completed by beginning of Q2 2012;
-- Senior on-site Project Manager recruited;
-- Fines for tailings dam 3 appealed against, hearing now set for end
January;
-- Akmola Gold: Antimonopoly commission consent received, acquisition
nearing completion
-- EBRD negotiations being finalised
Tim Daffern, CEO of Hambledon said "The on-going extraction and
infrastructure development for the underground mine at Sekisovskoye
position the Group to become a growing gold producer with
production from Sekisovskoye rising progressively to over 100,000
ounces per year with Akmola Gold potentially adding a further
50,000 ounces per year.
The appointment of an on-site project manager puts in place the
senior level skills needed for the management of our expansion
plans."
Operational results for the three months from 1 October to 31
December 2012:
October November December Total
Milled tonnes (dry) 68,420 41,120 57,394 166,934
Gold grade (g/t) 1.24 1.38 1.25 1.28
Contained gold (gms) 84,678 56,807 71,742 213,229
Contained gold (oz) 2,722 1,826 2,306 6,854
Gold recovery % 80.02 % 79.80% 78.55% 79.5%
Recovered gold (oz) 2,178 1,457 1,811 5,446
Recovered silver (oz) 3,269 2,467 2,083 7,819
Underground mining (t) Nil 4,021 4,159 8,180
Underground grade Au (g/t) Nil 4.00 3.36 3.13
Underground grade Ag (g/t) Nil 6.38 4.63 5.49
PROCESSING
During the final quarter of 2011 higher ore grades from the open
pit (reaching up to 2.49 g/t Au) and from the underground mine were
fed to the plant. With an increasing open pit grade and ongoing
production from the underground mine, Sekisovskoye is now well
positioned to increase gold production significantly over the
course of this year.
Gold recovery was slightly lower than in previous quarters, not
helped by the plant shutdown in early November, which also
constrained production levels. There were also changes in the
cyanide quality with commensurate consumption of lime and oxygen.
Additional control equipment is currently being installed to
improve the control of the process chemistry. The Company expects
to return to previous levels of recovery once all the equipment has
been installed.
The crushing and screening plant continuously exceeded internal
performance targets of 120tph for the quarter and highlighted the
positive effect of the infrastructure refurbishment of the jaw
crusher, conveyors systems and cone crushers completed in Q2 and Q3
2011. Despite the plant stoppage in November 2011, the 2011 tonnage
processed of approximately 744,000t exceeded 2010 by approximately
five per cent., highlighting the improved efficiency and
performance of the metallurgical plant.
OPEN PIT MINING
Mining activities were primarily centred on the main open pit
where most of the remaining excess waste ore was removed. There
remains a small quantity to be excavated in Q1 2012. The result of
the removal of the excess waste has been higher operating costs in
2011, which will reduce in 2012 as the waste to ore ratio
decreases.
UNDERGROUND
Underground mining continues to progress ahead of schedule and
under budget. Three operating levels are now in place with an
expansion to five scheduled for the end of Q1, 2012. This will
allow the underground mine to reach its targeted production level
of 100,000t ore in 2012.
The contractor continues to perform well. Infrastructure work
has included a large underground workshop, a substantial
underground pumping station, first aid and welfare rooms, offices
and large explosive magazines. This infrastructure will enable more
efficient and lower cost underground mining once completed in
mid-2012.
The mining engineering and pre-feasibility studies conducted by
Golder Associates (UK and Canada) have been completed and the
results are being used to guide the trial mining in the upper
levels using modified room and pillar extraction techniques. The
first trial bulk mining extraction stopes will commence in Q2 2012
so that a phased development towards bulk tonnage low cost mining
is made.
The diamond drilling programme was briefly suspended at the end
of 2011 to allow for annual machinery maintenance. The work has
re-started and results from the next phase of drilling are expected
to be released shortly.
Geological modeling of the underground resource continues and
results will be released prior to publication of the Company's
annual report.
TAILINGS DAM NO.3 (TD3)
A small leak from TD3 occurred in late October 2011 when the
liner failed resulting in a release of low level cyanide-containing
effluent to a stream which flows across the mine site. The Company
informed the competent authorities and was requested to add a
cyanide neutralising agent to the watercourse. The Company provided
an alternative water supply for local residents until the
authorities declared that the stream no longer presented a risk to
water users. In addition, the Company has entered into an agreement
with the local communities to contribute to local social
infrastructure, including provision of municipal water supply,
recreational facilities for communities, road surfacing, etc.
The Company appointed an international mining engineering
consultant to undertake a root cause analysis of the failure and to
design remedial measures. In addition, an independent third party
consulting firm was then mandated to review the incident analysis
and proposed remedial works.
On the basis of the above, Hambledon is satisfied that the cause
of the recent failure is understood and a feasible engineering
solution to TD3 remediation and re-commissioning has been
developed.
Fines / penalties
-- Hambledon has received notice that it is to be fined GBP1.17m for an
administrative offence arising from environmental damage. An
appeal
against the level of the fine has been lodged.
-- A court hearing was due on 5 January 2012 but after reviewing the
appeal documentation the courts decided to postpone the hearing
until
late January 2012.
-- It is normal in Kazakhstan for a fine to be imposed and for the amount
of the fine to be reduced in court according to the arguments
for and
against the level of the fine.
The imposition and contesting of fines in Kazakhstan is
considered to be normal practice in Kazakhstan and previous
experience suggests that the fine will be significantly
reduced.
SITE MANAGEMENT
Mr. Mike Grummit, a senior Project Manager, has been recruited
by the Company. Mike is a UK Chartered Mining Engineer of some 40
years' experience, most recently with African Barrick, and will
join Hambledon at the end of Q1 2012.
Mike's role will be to manage the execution of the Company's
projects in Kazakhstan. Mike has extensive underground gold mine
construction and operational expertise.
AKMOLA GOLD LLP
As previously notified, the sale and purchase agreement for
Akmola Gold was signed at the beginning of Q4, 2011. The
applications to the Anti-Monopoly Commission and the Ministry of
New Industry and New Technology (MINT) were made to allow the
conditions required for closing to be met.
Since then, the Anti-Monopoly commission waiver has been
received and staff in Kazakhstan have responded to all government
queries regarding the proposed development of the Akmola Gold LLP
properties.
It is hoped that the acquisition completion will take place
around the end of Q1 2012, with the commencement of site
establishment and development of the underground infrastructure. It
is envisaged that the first ores from the Tellur project will be
mined in mid-2013 for processing at the Sekisovskoye project.
ENQUIRIES:
HAMBLEDON MINING:
Telephone +44 (0)207 233 1462
Charles Zorab
FAIRFAX I.S. PLC (NOMAD AND BROKER):
Telephone +44 (0)207 598 5368
Ewan Leggat/Katy Birkin
TAVISTOCK COMMUNICATIONS:
Telephone +44 (0)207 920 3150
Ed Portman/Jos Simson
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