TIDMANGM
RNS Number : 0575I
Angel Mining PLC
19 July 2012
ANGEL MINING PLC
("Angel Mining" or the "Company")
AIM: ANGM
TRADING UPDATE
The Board of Angel Mining, the Greenland-focused mining and
exploration company, is pleased to provide shareholders with the
following trading update:
Highlights
-- Based on a projected average gold price received of
US$1,575/oz, the Nalunaq gold mine is projecting revenues of
US$44.5 million over the next twelve months, subject to receipt of
the permit for partial pillar extraction;
-- A joint exploration project with Nuna Minerals is being
considered, to determine whether there are other gold deposits in
the same mountain as the Nalunaq mine; and
-- The Company has been investigating the potential benefits of
in-situ hydro power at Black Angel to replace its oil fired
generators.
Nalunaq
Production
On 29(th) May 2012, the Company advised shareholders it had
ceased mining in South Block as it had encountered serious
faulting, but since then production has continued without a break,
using material mined in the Mountain Block, which has enabled cash
generation to continue. Grades have been below the average expected
for the mine but this is expected to change once pillar mining
commences and production should then be within the target range of
1,500oz to 2,000oz Au per month.
To achieve the new production plan at Nalunaq, the following
steps are necessary:
1. The permit from the Greenland Bureau of Minerals and
Petroleum ("BMP") to part mine the pillars;
2. A second long-hole drill, which has already been purchased,
and should arrive at the site before the end of August;
3. Relining of the ball mill. New liners are currently being
manufactured and should be onsite before the end of August;
4. A larger jaw crusher to deal with the existing inventory of
oversize ore. A unit has been purchased from EMJ-Atcom and it
should arrive onsite this week;
5. The crushing circuit needs to be capable of feeding the ball
mill at its rated capacity of 10 tons per hour. Management believe
this can be achieved by placing the new jaw crusher at the top of
the ore pass, which feeds directly into the crushing circuit. The
plant crushing circuit is currently supplemented by crushing
outside the mine with a mobile cone crusher, and then feeding the
material into a ball mill feed hopper. This process is quite
inefficient. and the new arrangement is expected to be a big
improvement and transform winter operations.
Resource
The team at Nalunaq has just completed a detailed volumetric
survey and grade of all mineable material that can be identified at
each level in the mine. This exercise has identified 68,800 tonnes
of ore with an average grade of 15.04 grams Au per tonne. This
figure includes 29,500 tonnes of ore which can be safely recovered
from the pillars, as confirmed in the report prepared for the
Company by Golders Associates earlier this year. Note: the
estimates of resource quoted above are based upon internal
estimates and have not been independently verified.
The report supported the application to the BMP for permission
to mine the pillars, which was presented to the BMP on 7(th) March
2012. The BMP have indicated that the response to the application
should be received within the next two weeks.
The 68,800 tonnes of ore, referred to above, should enable the
plant to produce approximately 28,300 ounces of gold in the next 12
months and at the current gold price of US$1,575 per ounce, this
would generate US$44.5 million of sales.
The resource referred to above does not include any additional
material that might be discovered as the Company mines the Mountain
Block. This part of the mine is at the top of the mountain and it
has not been possible to undertake core drilling from the surface
due to the difficult terrain. The Company's geologists believe
there are likely to be further deposits of very high grade material
to be found there, similar to the ore we are currently being
recovered from that part of the mine.
Exploration Plan
Nuna Minerals A/S is a highly regarded Greenlandic exploration
company which made the original discovery of gold at Nalunaq. They
have established a large gold area in the south of Greenland, and
they have just completed their summer gold exploration drilling
programme in the Nalunaq region. Indeed, they used Nalunaq as their
base camp.
Their CEO, Ole Christiansen has suggested that, in his opinion,
it is highly likely there will be other gold bearing intrusions in
the same mountain as Nalunaq and he has proposed a simple and
inexpensive joint exploration project to see if Nuna's geologists,
working with Nalunaq's geologists, can find evidence of further
outcrops of such intrusions. If this were so, it could lead to more
serious exploration activity next year and if Mr. Christiansen's
theory is correct there may be further gold mining opportunities
for the Company to exploit at Nalunaq. Should this project proceed,
we will provide further details to the market when appropriate.
The Team
Alex Hamilton has been appointed General Manager with immediate
effect. Alex has been plant manager at Nalunaq since mid May 2011
and has been responsible for getting the plant to the point where
it is capable of operating at target throughput and recovery
efficiency.
Gordon McClure has been appointed Head of Mining. He is an
energetic and experienced hard rock miner who has been an effective
deputy to Steve Ainsworth since January 2012. Gordon's deputy is
Steve Dash who was one of the first Cornish miners to join Angel
Mining at Nalunaq back in January 2010.
Haraldur Haraldsson has been appointed Health & Safety
Officer and Environmental Superintendent.
Together with the existing appointees, Management is confident
we have now assembled a very strong team with many years of
experience and proven technical expertise.
The Company's previous duty manager and Head of Mining, Steve
Ainsworth, has recently left the Company to start work at a mine
close to his home in Armenia. We are grateful to Steve for the
excellent job he has done for Angel Mining since he joined last
September, both in the areas of Health & Safety and in the
development of the mining team. The Copmpany now has a robust
Health & Safety policy which has been approved by the BMP, with
detailed risk assessments established for all critical mining and
process plant roles. Angel Mining also have three mining teams with
strength in depth. We wish Steve well in his new role.
Black Angel
Finance
Zinc and lead prices remain below US$2,000 per tonne and to
attract finance the Company is making every effort to keep
operating costs as low as possible to improve the financial
attractiveness of the project.
Fuel oil is projected to account for over 25% of the cash cost
of production, amounting to approximately US$10.5 million per year,
and represents an important area for potential cost savings through
the possible alternative use of hydro-electricity. A detailed study
undertaken in 1979 by Cominco showed that water from South Lake
should be sufficient to generate 9MW of power. This would be more
than enough to supply the needs of the Black Angel process plant
and all other site power needs, with the exception of mobile
equipment. Clearly there would be a significant increase in capital
expenditure, but operating costs would be much reduced throughout
the long life of the mine. The Company will be inviting detailed
quotes from specialist design and construction suppliers for
hydro-electric plants over the coming months.
The Company has referred many times to the JORC compliant
resource statement produced by Wardell Armstrong International in
2007, which confirmed a resource of 4.425 million tonnes of medium
to high grade zinc ore. The resource identified by an extensive
drilling programme in the 1970s and 1980s by Cominco is
unfortunately now not capable of being integrated with the existing
JORC compliant data, but a report prepared in 2007 and written by
Dr. Robert Dowdell, estimates a resource of 2.6 million tonnes of
high grade ore. Even though this resource statement does not comply
with JORC standards, Management believes it does help to
demonstrate that at an extraction rate of 250,000 tonnes per annum,
the Black Angel mine could have a life expectancy of 28 years.
Nicholas Hall, CEO, commented: "My latest visit to Greenland has
confirmed we are making great progress at our Nalunaq gold mine. We
have reorganized our team and morale on site is excellent. The
resultant cost savings and our detailed measurement of the resource
base means we potentially have the ability to generate enough cash
to repay the Company's existing debt balance and also to make a
worthwhile contribution to the funding requirements of Black
Angel.
Our Black Angel project continues to develop as further
innovative ideas emerge. The latest proposal we are investigating
is the possibility of generating hydro electricity onsite, which
would significantly reduce operating costs and help make the mine a
a very environmentally efficient mining operation. The capital cost
of doing so is still being evaluated.
In summary I am becoming increasingly confident of our ability
to deliver real shareholder value."
Enquiries:
Angel Mining plc
Nicholas Hall, Chief Executive
Officer 07931 709 053
Kevin McNair, Chief Financial
Officer 07900 690 908
Fox-Davies Capital (Nominated
Adviser & Broker)
Daniel Fox-Davies
Simon Leathers 0203 463 5010
Bishopsgate Communications Limited
Nick Rome 0207 562 3350
Background to Angel Mining
Nalunaq
The Company first poured gold at Nalunaq on 27(th) May 2011
following final commissioning of the processing plant and is
targeting optimal production of approximately 18,000 oz per annum,
thereby providing the Company with cash flow which will be
dedicated to funding development at Black Angel, further
exploration at Nalunaq and reducing debt. Angel Mining owns the
only operational gold mine in the region and anticipates its plant
may be suitable for processing ore from other gold mining companies
in the region in the future. It may therefore enter into toll
treatment arrangements with other potential gold mining activities
in the region where appropriate.
Black Angel
The Black Angel project is a high grade zinc/lead project based
around a previously developed mine in the north of Greenland, which
includes three sets of zones within the mine and three satellite
deposits which have been explored.
Summary of Black Angel Mineral Resources (JORC) as of 31 December 2007
======================================================================================
Category Tonnage Zinc Lead Silver (g/t) Mineable reserves
(kt) (%) (%) (kt)
==================== ========== ======= ==== ==== ============ =================
Angel Zone Indicated 791 13.0 4.5 25.0 218
==================== ========== ======= ==== ==== ============ =================
Cover Zone Indicated 522 8.3 2.4 18.0 231
==================== ========== ======= ==== ==== ============ =================
Other zones within
the Black Angel
mine Indicated 697 10.4 3.3 13.0 -
==================== ========== ======= ==== ==== ============ =================
South Lakes Glacier Indicated 1,726 6.9 2.5 14.5 -
==================== ========== ======= ==== ==== ============ =================
Ark Inferred 492 4.7 2.2 20.4 -
==================== ========== ======= ==== ==== ============ =================
Nunngarut 2 Indicated 196 9.0 3.4 31.0 -
==================== ========== ======= ==== ==== ============ =================
Nunngarut 2 Inferred 1 4.5 1.9 9.0 -
==================== ========== ======= ==== ==== ============ =================
Total 4,425 449
================================ ======= ==== ==== ============ =================
Source: Wardell Armstrong International Ltd.
======================================================================================
The project consists of three phases:
Phase I: Complete the rehabilitation of infrastructure to allow
access to the mine, the mine camp and related facilities.
Phase II: Complete the detailed review of the pillar extraction
programme within the Angel and Cover Zones, including construction
of the process plant and related systems to allow for the shipment
of concentrate from the site.
Phase III: Develop a further exploration programme for the
existing JORC resources at the Ark and Glacier deposits as well as
identified mineralization at Deep Ice, Nunngarut and a number of
other exploration targets within the license area (see the
announcements made by the Company on 6(th) June 2006 titled "Black
Angel 2006 Resource Statement" and on 30(th) November 2007 titled
"Black Angel 2007 Resource Statement").
Dr. Bob Dowdell is the qualified person who has reviewed and
approved the technical information contained in this announcement.
Dr. Dowdell holds a BSc and Doctorate in Mining Engineering from
Newcastle University and is a Chartered Engineer and a Member of
the Institute of Mining and Metallurgy. Dr Dowdell is a Competent
Person for the purposes of the AIM Guidance Note on Mining, Oil and
Gas Companies dated June 2009.
More information on the Company is available on the website,
please click here: http://www.angelmining.com/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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