Hambledon Mining PLC Update
14 September 2012 - 12:18AM
UK Regulatory
TIDMHMB
Hambledon Mining Plc
("Hambledon" or the "Company")
Strategic Review of the Underground Mining Operation
Hambledon Mining Plc ("Hambledon Mining" or "Company") (AIM:
HMB), the Kazakhstan gold mining and development company, announces
that it has recently reviewed the development of the underground
mine at Sekisovskoye.
The Company has recently started work on test bulk mining and
the results so far of this mining programme have shown that bulk
mining is practicable and planned grades are close to actual grades
mined. However, further development of the underground mine
requires the construction of substantial infrastructure. At the
same time other capital expenditures, together with the fines
recently paid in respect of the failure of the tailings dam in Q1,
2012, impose a considerable funding burden on the Company.
Furthermore, the regulatory process for developing the underground
mine is bureaucratic and convoluted, with recent changes to this
process requiring significant additional technical studies and
submission of plans which will be based on the final results of the
initial on-going bulk mining test programme.
For these reasons, the Company has decided that instead of
continuing the mining of the ore zones whilst concurrently
progressing the next stage of feasibility study, underground
production should be paused following extraction of the currently
accessible zones. The on-going programme of diamond drilling will
continue so that the geological knowledge of the underground mine
is further developed and the future development of underground
mining optimised. It is envisaged that underground mining will
resume in H2 2013.
In the meantime, the Company intends to build up its cash
resources by deferring the proposed underground capital expenditure
programme. The cash generation from the on-going open pit
operations is expected to increase markedly in 2013 as a result of
the scheduled reduction of the stripping ratio of waste to ore, the
completion of the remedial works to tailings dam 3 and the ability
to dump waste rock from the main pit into the depleted North pit,
reducing the average waste haulage distance from around 5km to 500
metres.
This more measured approach to the mine development will ensure
that the business builds up its capital from internally generated
cash flow from continuing mining operations, has sufficient time to
optimise the underground development and ensure full compliance
with the Kazakhstan administrative approval processes for
underground mining.
The Company has revised its forecast for gold production in Q4
2012 and hence its overall 2012 forecast is reduced to 21,000oz Au.
This figure takes into consideration the reduction in underground
mining volumes and the restraint on gold production caused by the
tailings dam remediation works.
The Company continues to expect to complete the acquisition of
Akmola Gold as soon as the waiver of the government pre-emption
right is received and the cash component of the acquisition cost is
being retained in readiness.
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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