VANCOUVER, Feb. 23, 2017 /CNW/ - Euromax Resources Ltd
("Euromax" or the "Company") (TSX:EOX) (OTCQX:EOXFF) is pleased to
provide an update with respect to its wholly owned Ilovica-Shtuka
copper gold project in Macedonia,
(the "Project").
Permitting
Two key milestones have been achieved towards the granting of
the exploitation permit. The first is the merger of the
Company's two exploitation concessions, Ilovica 6 and Ilovica 11
(over which the Ilovica-Shtuka Project footprint extends), that has
been approved by the Macedonian Ministry of Economy and submitted
to the Government for ratification.
The second milestone is the approval of the Strategic
Environmental Impact Assessment by the Macedonian Ministry of
Environment within the process of the urbanization of the mine
footprint.
An Environmental and Social Impact Assessment (ESIA) produced by
Golder Associates to international standards and requirements has
also been prepared. This follows the Macedonian Environmental
Impact Assessment published last year and will facilitate project
financing and requirements of various project stakeholders.
The ESIA will be published on the Company's website during
March 2017.
Capital Expenditure
Mine Planning and Contract Mining
Following additional mine plan work completed during 2016 aimed
at achieving a mine schedule with the required detail to start
planning of operations, the Company initiated a Contract
Mining tender process in November
2016. The tender was aimed at covering the first 7
years of mine life (i.e. the 2-year construction and pre-strip
period plus 5 years of operation).
As a result of this tender process, the Company has received
indicative offers from three international companies for the
provision of Contract Mining Services. The Company is
currently evaluating these bids, seeking clarifications and
assessing the economic impact. However, the average cost
per tonne mined of material during production from the bids
received is US$ 1.79/t of
material moved with capex of approximately US$ 58.5m
(including prestrip costs), compared to the Company's Feasibility
Study Technical Report (February
2016), which indicated US$
1.62/t and capex of US$ 100.7m (including prestrip
costs) over the same period.
Engineering, Procurement and Construction Contract
("EPC")
The Company has agreed to a binding Memorandum of Understanding
(the "MoU") with Ausenco Engineering Canada Inc. ("Ausenco") for
further initial detailed engineering and design and a framework to
allow Ausenco to proceed through a two-step process to ultimately
provide the Company with a Lump Sum Turnkey Price for the
construction of the process plant and related infrastructure for
the Project.
The first step is for Ausenco, on an open book basis, to provide
the Company with a Guaranteed Maximum Price ("GMP") based on an
agreed scope of work within 90 days of commencing the work to do
so. Following the delivery of the GMP, provided only that the
GMP is at or below the Project capital expenditure as per the
Company's Feasibility Study Technical Report, Ausenco would proceed
with the second step in preparing and negotiating with the Company
a Lump Sum Turnkey EPC contract for the development of the
Ilovica-Shtuka Project, the substantial terms of which are included
in the MOU.
As per the MOU, the cost of Ausenco's work to deliver the GMP
will be settled through the issuance of Euromax shares to Ausenco,
at a premium to the share price immediately prior to delivery and
announcement of the GMP. Based on the current market price, the
amount of common shares to be issued to Ausenco in connection with
the MoU would be less than 5% of those currently issued and
outstanding. The commencement of Ausenco's work towards the GMP is
contingent upon Euromax independently funding an agreed
amount. The proposed issuance of common shares to Ausenco is
subject to the final approval of the Toronto Stock Exchange.
Commenting on the announcement, Steve
Sharpe, President & CEO stated:
"The strong support of the Macedonian authorities has yet
again been shown by the approval of the merger of Concessions and
Strategic EIA. The achievement of these Key Milestones, sets a very
clear path to the timely development of the Ilovica-Shtuka
Project. The offers for Contract Mining have come in at rates
far lower than we had anticipated. With the potential for a
US$40 million capex reduction, they
seem a very compelling alternative to the owner operated mining
plan presented in the Feasibility study. Finally, the faith in the
project shown by Ausenco's willingness to not only guarantee a
maximum price for the Project at or below the Feasibility Study
Price, but further, to undertake the detailed engineering and
design work required to deliver this price commitment in exchange
for equity, issued at a premium, is not only a resounding
endorsement of the technical and economic viability of the project,
but also a definitive indicator of their confidence and ability to
optimize and deliver value for the Euromax shareholders. In
addition to a fixed price, Ausenco's ability to provide schedule
and plant performance certainty will significantly enhance our
ability to optimize and deliver the financing plan for the
Project".
About Ausenco
Ausenco is a private, diversified, engineering, construction
and project management company, majority owned by Resource Capital
Funds ("RCF"), providing services to the global resource and energy
sectors. Ausenco's experience in precious and base metal projects
ranges from conceptual studies for new project developments to
execution with EPC or EPCM delivery.
Ausenco has delivered a number of projects under Lump Sum
Turnkey contracts which provide cost, schedule and performance
certainty often required by financiers and investors. Ausenco
is currently completing the process plant and other support
infrastructure for a gold project in Nova
Scotia under a Lump Sum Turnkey contract and is often
pioneering the entry into new jurisdictions and/or innovative
technologies focused on the delivery of superior shareholder
returns.
About Euromax Resources Ltd.
Euromax has a major development project in Macedonia and an exploration services company
in Bulgaria. We are focused on
building and operating the Ilovica-Shtuka copper/gold project in
Macedonia, as well profitably
deploying the wealth of exploration experience within our Bulgarian
Exploration Services subsidiary.
Forward-Looking Information
This news release contains forward-looking information, such
as statements relating to the development of the Project.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Euromax to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. There are no assurances
that the Project will be placed into production. Factors that could
affect the outcome include, among others: the inability to raise
the funds necessary to achieve the milestones or complete
development of the Project and inability to raise the funds
necessary to advance exploration activities; the actual results of
development activities at the Project ; project delays; general
business, economic, competitive, political and social
uncertainties; future prices of metals; actual metal recovery;
conclusions of economic evaluations; changes in project parameters
as plans continue to be refined; accidents, labour disputes and
other risks of the mining industry; political instability,
terrorism, insurrection or war; delays in obtaining governmental
approvals, necessary permitting or in the completion of development
or construction activities. For a more detailed discussion of such
risks and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements, refer to Euromax's filings with Canadian securities
regulators available on SEDAR at
www.sedar.com.
Although Euromax has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are made as of the date
of this news release and Euromax disclaims any obligation to update
any forward-looking statements, whether as a result of new
information, future events or results or otherwise, except as
required by applicable securities laws.
For more information, please visit www.euromaxresources.com or
contact:
SOURCE EurOmax Resources Ltd.