TIDMAUE
RNS Number : 4642G
Aureus Mining Inc.
08 August 2016
8 August 2016
Aureus Mining Inc.
TSX : AUE
AIM : AUE
Q2 2016 RESULTS AND OPERATIONAL UPDATE
Aureus Mining Inc. ("Aureus" or the "Company"), the TSX and AIM
listed West African gold producer, announces the release of its
unaudited interim results for the quarter-ended June 30, 2016, and
is pleased to provide an update on the recommencement of gold
processing operations at the New Liberty Gold Mine ("New Liberty")
in Liberia.
Financial Summary
-- Entered into an agreement for a US$30 million equity
financing with MNG Gold Jersey Ltd. ("MNG Gold") to strengthen the
Company's balance sheet and fund working capital as it completes
the restart of the processing plant at the New Liberty Gold
Mine;
-- Gold production from New Liberty of 8,274 ounces for the
quarter prior to the suspension of gold processing operations;
-- Revenues of US$14.7 million from gold sales of 11,731 ounces;
-- Operating cash costs of US$1,253 per ounce sold prior to the
process plant suspension. Including operating costs incurred during
the period of process plant suspension operating cash costs of
US$1,660 and all-in sustaining cash costs of US$1,894 per ounce
sold;
-- Quarter-end cash of US$4.2 million and inventory of US$19.9 million; and
-- A four month default waiver and standstill agreement received
from the Company's lending banks during which time the Company will
work with its lenders to reschedule the debt repayment profile.
Operational Summary
-- Mining operations progressed in both the Kinjor and Larjor
pits with tonnes mined during the quarter totalling 2,747,266
tonnes, including 201,774 tonnes of ore at an average grade of 3.58
g/t;
-- Strip ratio for the quarter of 12.6; and
-- 99,438 tonnes of ore were processed at an average feed grade
of 2.54 g/t prior to the process plant suspension, resulting in the
production of 8,274 ounces of gold during the quarter.
Operations Update
The Company has recently restarted processing operations at the
New Liberty Gold Mine following approval from the Republic of
Liberia's Ministry of Lands, Mines and Energy ("MLME") for the
recommencement of processing operations in order to test a number
of plant modifications and following delivery of additional
reagents to site.
Since the restart of processing operations, the Company has
experienced periods of unscheduled plant downtime as it works to
resolve processing plant performance issues, testing and further
optimisation activities. The Company will apply to the MLME for
approval of the full and continued operation of the processing
plant once it has achieved steady state operations for a continuous
period of 60 days. Since the recommencement of processing
operations, gold shipments have resumed with the Company pouring
and shipping approximately 3,500 ounces of gold.
Mining operations continued at New Liberty throughout the period
of suspended processing operations, with a focus on exposing
further fresh ore within the Kinjor and Larjor pits and
establishing sumps allowing for continuing mining operations
throughout the wet season. ROM stockpiles currently stand at
approximately 201,367 tonnes of fresh ore at a grade of 3.24 g/t
and oxide and transitional stockpiles stand at 91,719 tonnes at a
grade of 1.46 g/t.
However, mining operations continue to be hampered by low
equipment availability, with a consequential adverse effect on unit
mining cost. The Company is currently undertaking a review of the
options to remedy the situation.
Management is also undertaking a full supply chain review to
identify opportunities for efficiency improvements.
Corporate Update
The Company confirms that it remains committed to maintaining
its listing on both the AIM and TSX markets, however, the immediate
focus of the management team is to stabilise and then improve both
operational and financial performance at the New Liberty Mine.
The Company's management team is currently undertaking a
comprehensive review of the Company's cost base with a view to
improving cash costs and operating margins. Following the
completion of the operational and financial performance reviews and
the achievement of steady state operations at New Liberty,
management intends to produce a new life of mine plan for the
Project.
Notwithstanding the closing of the previously announced US$30m
equity financing transaction with MNG Gold, as announced on 15 July
2016, management believes that the Company remains undercapitalised
to deliver to its full potential and is likely to require further
funding for capital investment activities to deliver improvements
in operational performance. MNG Gold intends to be a long-term
supportive shareholder of the Company and fully expects to support
the Company in any future funding endeavours that may arise from
the conclusions of the on-going performance reviews.
The four-month default waiver and standstill agreement agreed
with the Company's lenders (Nedbank Limited, FirstRand Bank Limited
(acting through its Rand Merchant Bank division) and the Export
Credit Insurance Corporation of South Africa Limited) in June 2016
remains in place.
Further to the recent board changes announced on 15 July 2016,
the Company is pleased to announce that in accordance with
corporate governance guidelines in Canada, it has created the role
of Lead Director, effective immediately. The role is particularly
important in addressing matters on which MNG Gold (55% shareholder
of the Company), and those Directors of the Company related to MNG
Gold, may have a conflict of interest. Mr Loudon Owen has been
appointed to serve as Lead Director of the Board of Directors, and
was elected to act as such by those directors not related to MNG
Gold. Mr Owen has been a director of the Company since May 2014,
and is the chair of the Company's Corporate Governance and Risk
Management Committee.
Financial Statements and Management's Discussion and
Analysis
The financial statements should be read in conjunction with the
accompanying management's discussion and analysis. These documents
have been filed on Sedar and are available on the Company's website
www.aureus-mining.com or at www.sedar.com.
Contact Information
Aureus Mining Inc. Buchanan
Geoff Eyre Bobby Morse / Anna Michniewicz
Tel: +44(0) 20 7010 7690 Tel: +44(0) 20 7466 5000
-------------------------- -------------------------------
Numis Securities Limited
(Aureus Nominated Adviser
and Broker)
John Prior / James Black
/ Paul Gillam
Tel: +44(0) 20 7260 1000
-------------------------- -------------------------------
About Aureus Mining Inc.
The Company's assets include the New Liberty Gold Mine in
Liberia (the "New Liberty Gold Mine," "New Liberty" or the "mine")
which has an estimated proven and probable mineral reserve of 8.5
Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated
measured and indicated mineral resource of 9,796 Kt with 1,143,000
ounces of gold grading 3.63 g/t and an estimated inferred mineral
resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t. A
Definitive Feasibility Study ("DFS") has been completed, the first
gold pour has taken place and commercial production has been
declared. The foregoing mineral reserve and mineral resource
estimates and additional information in connection therewith are
set out in the Company's technical report dated March 25, 2015 and
entitled "New Liberty Gold Project, Bea Mountain Mining Licence
Southern Block, Liberia, West Africa, Definitive Project Plan."
The New Liberty Gold Mine is located within the Southern Block
of the 100% owned Bea Mountain mining licence. This licence covers
478 km(2) and has a 25 year, renewable, mineral development
agreement. The Bea Mountain mining license also hosts additional
gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which
are the focus of exploration programs during 2016. Ndablama has an
indicated mineral resource of 386,000 ounces of gold grading 1.6
g/t and inferred mineral resource of 515,000 ounces of gold grading
1.7 g/t and Weaju has an inferred mineral resource of 178,000
ounces of gold grading 2.1 g/t. The Yambesei (759 km(2) ), Archaen
West (112.6 km(2) ), Mabong (36.6 km(2) ) and Mafa West (15.6 km(2)
) licences will also be subject to preliminary reconnaissance
geological work. The foregoing mineral resource estimates and
additional information in connection therewith are set out in the
Company's technical report dated December 1, 2014 and entitled
"Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence,
Northern Block, Technical Report on Mineral Resources" ("Ndablama
and Weaju Technical Report 2014").
The Company also has a gold exploration permit in Cameroon.
Qualified Persons
The Company's Qualified Person is Mark J. Pryor, who holds a BSc
(Hons) in Geology & Mineralogy from Aberdeen University, United
Kingdom and is a Fellow of the Geological Society of London, a
Fellow of the Society of Economic Geologists and a registered
Professional Natural Scientist (Pr.Sci.Nat) of the South African
Council for Natural Scientific Professions. Mark Pryor is an
independent technical consultant with over 25 years of extensive
global experience in exploration, mining and mine development and
is a "Qualified Person" as defined in National Instrument 43 -101
"Standards of Disclosure for Mineral Projects" of the Canadian
Securities Administrators and has reviewed and approves this press
release.
Forward Looking Statements
Certain information contained in this Announcement constitutes
forward looking information. This information may relate to future
events or the Company's future performance. All information other
than information of historical fact is forward looking information.
The use of any of the words "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "should",
"believe", "predict" and "potential" and similar expressions are
intended to identify forward looking information. This information
involves known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward looking information. No assurance
can be given that this information will prove to be correct and
such forward looking information included in this Announcement
should not be unduly relied upon. This information speaks only as
of the date of this Announcement.
Actual results could differ materially from those anticipated in
the forward looking information contained in this news release as a
result of the risk factors, including: the risk that the waiver and
standstill agreement will terminate; risks normally incidental to
exploration and development of mineral properties; the inability to
obtain required waivers and amendments from the Company's creditors
in respect of its debt repayment obligations and consequential
risks of default thereon; risks related to operating in West
Africa; health risks associated with the mining workforce in West
Africa; risks related to the Company's title to its mineral
properties; adverse changes in commodity prices; risks related to
current global financial conditions; the inability of the Company
to obtain, maintain, renew and/or extend required licences,
permits, authorizations and/or approvals from the appropriate
regulatory authorities and other risks relating to the legal and
regulatory frameworks in Liberia, including adverse changes in
applicable laws; competitive conditions in the mineral exploration
and mining industry; risks related to obtaining insurance or
adequate levels of insurance for the Company's operations; risks
related to environmental regulations; uncertainties in the
interpretation of results from drilling; risks related to the legal
systems in Liberia; risks related to the tax residency of the
Company; changes in exchange and interest rates; risks related to
the activities of artisanal miners; actions of third parties that
the Company is reliant upon; lack of availability at a reasonable
cost or at all, of plants, equipment or labour, including required
equipment, explosives and other necessary material not being
delivered in the expected time frame, or at all; the inability to
attract and retain key management and personnel; political risks;
and future unforeseen liabilities and other factors.
The forward looking information included in this Announcement is
expressly qualified by this cautionary statement and is made as of
the date of this Announcement. The Company does not undertake any
obligation to publicly update or revise any forward looking
information except as required by applicable securities laws.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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