TIDMANGM
RNS Number : 2134P
Angel Mining PLC
22 October 2012
AIM: ANGM
22 October 2012
ANGEL MINING PLC
("Angel Mining" or the "Company")
Financial and Operational update
The Board of Angel Mining today provides the following financial
and operational update.
Nalunaq
A mechanical breakdown on Polaroil's fuel oil delivery tanker
led to the late delivery of fuel oil at Nalunaq and as a result
production was stopped on 26 September for 5 days. The production
halt was a prudent response and was required to ensure that
sufficient fuel was available to maintain the tank agitators in the
plant and to operate the air compressors until the fuel oil could
be supplied. The crushed rock already in the circuit was
progressively washed out to tailings to avoid the possibility of
the material settling at the bottom of the tanks.
The fuel oil was subsequently delivered on 1 October and
production recommenced immediately. The processing circuit has
since been re-charged with new ore and carbon stripping recommenced
on 14 October. As a consequence of the delayed fuel oil delivery
the plant will only achieve a single gold pour in October and this
will be for a lower quantity of gold than had previously
anticipated for the monthly production total.
Extension of Loan Arrangements
The unforeseen shortfall in gold production in October has
placed further pressure on the Company's limited financial
resources and, as a result, the Company today announces that it has
extended its loan arrangements with Cyrus Capital Partners LP
("Cyrus") by an additional US$2,000,000.
In addition to Cyrus making available this further short term
loan, they have agreed to the extension of the repayment date of
the existing outstanding loans made available by Cyrus pursuant to
the facilities agreement entered into on 6 June 2007 (as amended
and varied from time to time) from 31 December 2012 to 15 February
2013 . The aggregate amount now repayable by the Company to Cyrus
on 15 February 2013 is US$30.4 million plus accrued interest (such
amount, the "Cyrus Outstandings").
One of the conditions to Cyrus making the additional funds
available to the Company was that the Company grant to Cyrus an
option entitling Cyrus to acquire 75% of the issued share capital
of Arctic Mining Limited in exchange for GBP1 and a write-down of a
portion of the Cyrus Outstandings to be agreed at the time of
exercise. Arctic Mining Limited is a wholly owned subsidiary of the
Company that owns 100% of the share capital of Black Angel Mining
A/S. It does not include the Nalunaq license which is held
separately in another wholly owned subsidiary of the Company.
This option is exercisable by Cyrus on or after 15 February 2013
in the event that the Company has not, on or before such date,
repaid at least US$3,850,000 of the Cyrus Outstandings and also
complied with certain other conditions, including the raising of
further equity, as set out in the option agreement.
The Company will be seeking a more long-term solution to its
financing arrangements during the next few months, including
raising further equity. The Company recognises the challenges that
raising equity present whilst the current debt structure is in
place and as such we are pleased to report that Cyrus have
confirmed their intention to participate in a discussion about the
Company's capital structure before the end of November. Further
announcements will be made in respect of any agreed restructuring
in due course.
In order to facilitate this process and to avoid any conflict of
interests, Daniel Bordessa has resigned as a Director of the
Company with immediate effect. The Board would like to thank Daniel
for his support and commitment as a Director and look forward to
continuing to their working relationship. The structure and
composition is under review and the Company expects to announce
further details in this respect before 31 December 2012. This will
coincide with a broader strategic review the Company intends to
undertake within the same period.
Yorkville
The Company has today issued 25,000,000 shares at a price of 1.0
pence per share to Yorkville in settlement of the current
outstanding loan repayment. The amount of the loan has been reduced
from US$1,626,339 to US$1,226,339 and the repayment date has been
extended to 31 March 2013. Interest on the balance continues to
accrue at 4% per annum. The newly issued shares are expected to be
admitted to trading on AIM on 26 October.
Nick Hall, CEO of Angel Mining, commented: "This latest incident
was beyond our control and it was totally unexpected as Polaroil
have an excellent record of reliability. It came just at the time
that the Company was expecting to see a significant increase in
gold production at Nalunaq and this has been extremely frustrating.
Cyrus and Yorkville have been most supportive for which we are most
grateful. Moreover, the offer by Cyrus to consider longer term debt
restructuring should help us to strengthen the Company's balance
sheet and to ensure that it is not, in itself, an impediment to
financing Black Angel. We look forward to sharing these
developments with you in the coming months."
Enquiries:
Angel Mining plc
Nicholas Hall, Chief Executive
Officer 07931 709 053
Kevin McNair, Chief Financial
Officer 07900 690 908
Fox-Davies Capital (Nomad and
Broker)
Daniel Fox-Davies/Simon Leathers 0203 463 5000
Bishopsgate Communications Limited
Nick Rome/Ivana Petkova 0207 562 3350
Background to Angel Mining
Nalunaq
The Company first poured gold at Nalunaq on 27 May 2011
following final completion of the processing plant and is targeting
optimal production by Q1 2012 of approximately 24,000 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. The current mining plan
anticipates a mine life of two to five years, subject to further
exploration work. The directors anticipate that Nalunaq may enter
into toll treatment arrangements with other potential gold mining
activities in the region where appropriate. Angel Mining currently
operates the only operational gold mine in the region and
anticipates that its operation may be suitable for processing ore
from other gold mining companies in the region in the future.
Black Angel
The Black Angel project is a high grade zinc/lead project based
around a previously developed mine in the north of Greenland. The
table below sets out the JORC Code compliant mineral resources
estimate for the Black Angel project 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 Mineable
(kt) (%) (%) (g/t) reserves
(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 the
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 June 2006 titled "Black
Angel 2006 Resource Statement" and on 30 November 2007 titled
"Black Angel 2007 Resource Statement").
Dr Bob Dowdell is the qualified person that 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 Member of the
Institution of Mining and Metallurgy.
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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