Update on the Ereen Licence Status
08 Dicembre 2010 - 8:00AM
UK Regulatory
TIDMCAML
RNS Number : 5524X
Central Asia Metals PLC
08 December 2010
8 December 2010
CENTRAL ASIA METALS PLC
("Central Asia Metals" "CAML" or the "Company")
Update on the Ereen Licence Status in Mongolia
Central Asia Metals (AIM:CAML), a mining exploration and development company
focused on base and precious metals in Central Asia, would like to provide an
update on the status of its Ereen licence located in Mongolia.
On 17 November 2010 the Government of Mongolia published a list of 254 mineral
licences in the country that they intend to revoke on satisfaction of certain
events, the most relevant of which is a compensation payment to the owners.
This list is pursuant to the Water and Forest Law passed in July 2009 by the
Mongolian Parliament, whereby they enacted legislation that would prohibit
mineral exploration and mining in water basins and forest areas, and provided
for the revoking of licences already issued in such areas. The legislation
allows for the termination of such a licence only after the government has paid
compensation. This payment will be based on previous work, fees and taxes
incurred by the owner.
All the 254 licences included in the recent list relate solely to 'placer' gold
occurrences which are commonly defined as 'alluvial deposits containing heavy
minerals such as gold'.
CAML has, within its portfolio of mineral properties in Mongolia, three areas of
mineral interest, including Handgait, Alag Bayan and Ereen. The Ereen gold
deposit comprises five (5) mining licences; three (3) of which have been
included in the list of 254 licences, referenced above. The licences listed
include MV-15617, MV-15618 and MV-15619 which were transferred to mining
licences in June 2010 with a 30 year term. Two smaller mining licences, 2616A
and 4265A, have not been included in the list and it is estimated that these
contain approximately 50% of the known mineral resource. The remaining 50% lies
predominantly within licences MV-15618 and MV-15619 from which the Company has
been left with 19.4 hectares and 22.3 hectares of ground area respectively.
These areas correspond very closely to the plan area of resource within the
listed licence areas for revocation. CAML is actively pursuing clarification
from the government authorities that the areas not included in the potential
cancellation are indeed intended for continued ownership with CAML.
CAML owns 85% of the Mongolian entity Zuun Mod UUL LLC which holds the rights to
the Ereen mining licences. Ereen comprises a hardrock gold occurrence with a
JORC compliant resource of 19.9 million tonnes at a gold grade of 1.2 gram per
tonne for 773koz of contained gold at a 0.5 gram per tonne cut off, as defined
by Wardell Armstrong International in the Competent Persons Report (CPR) in the
CAML IPO admission document of 30 September 2010. As the Ereen deposit is
mostly of hardrock origin and not considered to be 'placer', the Company has
lodged official letters with the relevant authorities disputing the inclusion of
the three Ereen licences in this recently published list. In the CPR the Company
had indicated that only $0.2-$0.8 million would be spent during 2011 on
exploration and evaluation expenditure at Ereen and CAML will continue to comply
with its mining licence obligations.
CAML is aware that this new law has caused some concern amongst the mining
community in Mongolia which was evidenced last week when a number of alluvial
mining companies voiced their concern, stating that a number of the assets
included in the list of 254 have been used to secure loans with local banks and
that many thousands of workers may be laid off causing extensive social
hardship.
CAML will continue to keep all stakeholders informed of any further developments
in relation to the Ereen licences and ongoing discussions with the relevant
government authorities in Mongolia.
The Chief Executive Officer of CAML, Nick Clarke, commented;
"The key focus for CAML in the coming year remains the construction of our
10,000 ton per annum copper production plant at Kounrad. We are obviously
disappointed with the inclusion of our Ereen licences in the list of revoked
licences. However we feel confident that the government has left CAML with
sufficient area to encompass our known resource thus securing our title. In so
doing the government is showing some understanding of the needs of mining
companies and demonstrates the progressive nature it has shown to mining in the
recent past. We also understand the states desire to protect its natural
environment which is very much a part of the attraction of Mongolia but it has
to balance this against responsible inward investment into the mining sector.
We remain confident in the lasting security of our Ereen asset and this is
evidenced by our continuing work on a locally based feasibility study and other
environmental obligations."
Enquiries:
+------------------------------------+----------------------------------+
| Central Asia Metals | |
| Nick Clarke, CEO | +44 (0)20 7183 5402 |
| Nigel Robinson, CFO | |
+------------------------------------+----------------------------------+
| | |
| KPMG Corporate Finance | |
| Nominated Adviser | |
| Susan Walker | +44 (0)20 7311 1000 |
+------------------------------------+----------------------------------+
| Mirabaud Securities LLP | +44 (0)20 7321 2508 |
| Broker | |
| Peter Krens | |
+------------------------------------+----------------------------------+
| Pelham Bell Pottinger | |
| Charles Vivian | +44 (0)20 7861 3883 / +44 (0) |
| Klara Kaczmarek | 7859 048 228 |
+------------------------------------+----------------------------------+
Overview of Central Asia Metals
Central Asia Metals Plc currently has interests in a number of copper, gold and
molybdenum mining exploration and development assets in Kazakhstan and Mongolia.
In Kazakhstan, the Company has advanced plans for the construction of a plant at
the former Kounrad copper mine that will have the capacity to deliver 10,000
tonnes per annum of near term, low-cost copper production. CAML plans to
construct the plant with a joint venture with a local Kazakh government entity,
Saryarka. Kounrad was formerly an open-pit copper mine that was operated between
1936 and 2005. The site around the mine contains a number of dumps of waste
material from the mine from which copper can be extracted through an in-situ
leaching process followed by Solvent Extraction - Electro-Winning ("SX-EW").
Initial construction ground-works for the commercial SX-EW plant have already
been started and production at the plant is expected to commence in the fourth
quarter of 2011.
Central Asia Metals also has exploration opportunities in the region. One of
these is Alag Bayan, an early stage exploration project in Mongolia, where the
Company is focused on outlining a potentially significant copper/gold porphyry
target. This asset is situated close to the Oyu Tolgoi copper mine being
developed by Rio Tinto and Ivanhoe Mines. In addition Central Asia Metals plans
to develop further its molybdenum exploration project, Handgait, and its gold
exploration project, Ereen, both located in Mongolia.
The Company has an experienced management team that has a proven track record of
developing and commercialising mining opportunities in Central Asia. Central
Asia Metals plans to use this experience to look at additional opportunities in
the region and is already in early stage discussions in respect of a new
exploration and development opportunity.
Further details about Central Asia Metals can be found on the Company's website:
www.centralasiametals.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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