Monday's AIM news: Metals and mining
19th March 2012 11:52
by Darshini Shah from interactive investor
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Eight AIM-listed metals and mining companies, including Beacon Hill Resources and Vatukoula Gold Mines, updated investors on Monday. See what they, and the others, had to say.
Archipelago Resources
has appointed Colin Sutherland as chief financial officer (CFO), with effect from 26 March 2012.
Immediately prior to his appointment, Sutherland was CFO for Timmins Gold and has acted as CFO for Aurico Gold and Mexgold Resources.
The company also confirmed that Archipelago would report its results for the year ended 31 December 2011 on 29 March.
Beacon Hill Resources
has announced a marketing partnership with Vitol Coal for the sale of export coal from Minas Moatize.
The strategic partnership is initially for four years, with Vitol having the option to extend for a further four years and a break clause in the event of a change of control at Beacon Hill. In return for an appointment as agent to market Beacon Hill's export coal, Vitol will provide Beacon Hill with a $20 million (£12.6 million) secured debt facility available in two $10 million tranches, repayable by 31 December 2016.
Beacon Hill will continue to market 600,000 tonnes per annum to Global Coke.
"This result is a strong endorsement for Beacon Hill's development and logistics plans from Vitol. Importantly, a change of control clause has been included into the agreement, maintaining the key attraction for any potential acquirer of being able to secure the rights to the coal supply," noted broker Collins Stewart.
While Collins Stewart warned that logistics remained the key challenge for the group, it also acknowledged that Vitol would have analysed in detail the opportunity for Beacon Hill to access the export market before investing in a marketing deal. "As Vitol are likely to only be repaid if product enters the seaborne market, one would assume they have achieved confidence in Beacon Hill's ability to access that market.
"We therefore believe this deal adds a solid third-party endorsement of the mine's development and logistics plans as outlined in the definitive feasibility study, released last month," it stated.
"With first production of coking coal expected next quarter, followed by further shipments expected from Beira during the course of the year (including a maiden coking coal shipment) and the company hopeful of gaining an allocation on the logistically important Sena rail line, Beacon Hill looks to be building positive momentum this year," it added.
Botswana Diamonds
on Monday announced that Andre Fourie was stepping down as a director.
The news came as the company appointed Kabelo Mohohlo to the board of Kukama Mining and Exploration and Atlas Minerals, the wholly-owned Botswana subsidiaries of Botswana Diamonds.
Separately, the company confirmed that sampling operations have commenced on its Mobilong licence in the Cameroon. Two 100 to 150 tonne samples were being gathered from areas of potentially diamond-bearing conglomerate identified in earlier exploration. Results are expected to be released in the second quarter of 2012.
In Zimbabwe, a small bulk sample is ongoing on diamond claims in the Masvingo area. discovered diamond indicator minerals and kimberlites on the claims. "The purpose of the work on the claims which are 49% owned by Botswana Diamonds and 51% local Zimbabwean ownership, is to confirm the presence of kimberlites and to determine if they are diamondiferous," said the company.
Finally, data gathering preparation and analysis was continuing on the company's 50/50 joint venture in Botswana, with initial results expected in the second half of 2012.
Rambler Metals and Mining
confirmed that Tinma International has become a strategic shareholder in Rambler by way of a non-brokered private placement of about 10.4 million ordinary shares.
Rambler has granted Tinma a right of first refusal to participate in all subsequent equity fundraisings "so as to enable Tinma to increase its shareholding in the company to not more than 19.9% of the issued share capital of the company, and thereafter to maintain its percentage shareholding for so long as it holds at least% of the issued share capital of the company".
Tinma has also been granted the right to nominate one director to the Rambler board of directors. It will have the right to nominate a second member of the board when Tinma controls, either directly or indirectly, at least 15% of Rambler's issued share capital.
Sylvania Platinum
has cut its production guidance for the year from 60,000 to 50,000 ounces due to severe weather conditions caused by storm Dando, strike action and safety stoppages.
However, the company confirmed that with the recent commissioning of the sixth plant at Mooinooi, it still had the capability to achieve 15,000 ounces per quarter.
Vane Minerals
on Monday updated investors on its copper exploration drilling programme.
At the McGhee Peak, the company has completed two rotary exploration holes and partially drilled a third hole. "An attempt to re-drill the third hole, MP-1, reached a depth of 500 feet, but was unable to reach the desired depth due to poor ground conditions again being encountered," said the company.
It confirmed that a diamond drill rig, which was "more suitable for the encountered ground conditions", would be used for the follow-up drilling programme.
"Although it is frustrating not to have completed the third hole at McGhee Peak to target depth, our analysis of the drilling to date has given us sufficient confidence to commit to diamond drilling there," stressed chief executive David Newton.
In the meantime, the rotary drill rig has been moved from McGhee to Vane's next exploration target, Peg Leg, located in southern Arizona. An initial two-hole drilling programme has already commenced on 12 March.
Final drilling permits have now also been received for two additional drilling projects, Railroad and Lone Hills.
Vatukoula Gold Mines
second-quarter operational update showed an 8.73% fall in production compared to the previous quarter, partially due to heavy rainfall in January and lower gold recoveries.
Combined with a slight fall in received gold price to $1,639 per ounce, this resulted in a 35% fall in profitability to about £900,000.
However, the company believes that it is on track to reach 65,000 ounces of production this year.
Also during the quarter, the Fiji Sugar Corporation announced that Vatukoula Gold Mines would be partnering in the Rarawai Biomasse Power Project, which could reduce the company's power costs from $0.30 to $0.12 per kilowatt hour.
Wildhorse Energy
on Monday announced the conclusion of an independent engineer's review of its flagship Mecsek Hills UCG project.
"[The] outcome provided confirmation to Wildhorse Energy that the engineering design forms a satisfactory basis of design for the bankable feasibility study," said the company, adding that the conclusions of the review further underpinned Wildhorse Energy's confidence in the UCG potential.
The publication of the ore-feasibility study is expected at the end of the first quarter.
For an understanding of what to look for when considering exposure to the sector, read: Analysing... Miners.