In Response To Weakening World Manganese
Prices
LONDON, Dec. 4, 2019 /CNW/ - Meridian Mining SE (TSX V:
MNO) ("Meridian" or the "Company") today announces, that due to the
continued depressed world manganese ore prices, production from the
Company's Espigão d'Oeste Manganese operation ("Espigão Mn") in
Rondônia, Brazil, will be
immediately be put on temporary Care and Maintenance ("C&M"),
while continuing to explore value maximizing alternatives,
including discussions with the Company's major shareholder,
Sentient Equity Partners, and other potentially interested
parties.
Manganese ore ("Mn") prices have been under pressure since
April 2019 due to rising inventories
in Chinese ports, depressed manganese alloy prices and general poor
market sentiment. China's
manganese ore port stockpiles are currently at a 12 month high of
4.69 Mt, at the start of 2019 the stockpile was 2.90 Mt - a ~62%
increase.
In parallel with the increasing stocks and since the start of
the year, the price for +44% Mn concentrates CIF Tianjin
(China) has relentlessly declined
from USD 7.18 to USD 5.12; a ~30% decrease at the 3rd Quarter's
end. Subsequent to the Quarter's end, the price weakened rapidly to
USD 3.73 as of today - a ~48%
decrease from the start of the year.
"With the continued state of oversupply in the manganese market
and no expectation of change on the immediate horizon, it does not
make commercial sense for the Company to continue producing and
selling its high grade Espigão Mn concentrates at a financial loss"
said Mr. Gilbert Clark, Meridian
Mining's interim CEO. "The Company regrets what it hopes is a
temporary impact, that this action will have on our workforce and
other stakeholders and are doing what it can to cushion this, while
ensuring the long-term sustainability of the Company. Meridian is
retaining a core management/operations team (administration,
mining, processing, geology and environmental personnel). We
believe these actions will help shield the Company from the current
depressed manganese price and is a long-term approach to the
Espigão Mn; and one that will benefit all our investors and
stakeholders as we continue the strategy to build & plan for
long-term value. During this period of C&M for the Espigão Mn,
the Company will continue to progress the Espigão polymetallic and
Mirante da Serra manganese exploration projects. For the Espigão
mining and exploration tenements, the evaluation of the
polymetallic potential represents a strategic long-term change in
focus."
As a result of the C&M program, there will be a reduction in
the number of employees & contractors within Brazil. The Company will commercialise the
remaining stocks of Mn concentrates domestically but will suspend
ongoing discussions with potential new customers.
This measure is consistent with other actions the Company has
implemented over the past 18 months as part of a deliberate and
disciplined strategy to strengthen the Company for the long term.
The Company has optimized operations, avoided selling into weak
spot markets, resisted locking-in long-term sales commitments and
significantly reduced costs. However, the collapse in the Mn price
eroded the financial benefits of the modernization program of the
last 18 months.
"To date, we have made good progress in reducing costs but
unfortunately given the continued market weakness, more needs to be
done", said Mr. Clark. "Meridian can't control the world market's
prices for Manganese, so our focus is on positioning the Company to
continue to develop its strong pipeline of projects (Espigão
polymetallic and Mirante da Serra manganese) that have potentially,
a wholly different set of economic parameters, while completing its
local commitments."
On behalf of the Board of Directors of Meridian Mining SE
Gilbert Clark
Interim CEO, President and Director
Qualified person
The technical information about the Company's exploration
activity has been prepared under the supervision of and verified by
Dr. Adrian McArthur (B.Sc. Hons,
PhD. FAusIMM), the Chief Geologist of Meridian Mining, who is a
"qualified person" within the meaning of National Instrument
43-101.
ABOUT MERIDIAN
Meridian Mining SE is focused on the acquisition, exploration,
development and mining activities in Brazil. The Company is currently focused on
exploring and developing the Espigao polymetallic project, the
Mirante da Serra manganese project and the Ariquemes tin
exploration portfolio in the state of Rondônia, Brazil.
Further information can be found at www.meridianmining.co
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking
information or forward-looking statements for the purposes of
applicable securities laws. These statements include, among
others, statements with respect to the Company's plans for
exploration and development of its properties and potential
mineralization. These statements address future events and
conditions and, as such, involve known and unknown risks,
uncertainties and other factors, which may cause the actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the statements. Such risk factors include, among
others, failure to obtain regulatory approvals, failure to complete
anticipated transactions, the timing and success of future
exploration and development activities, exploration and development
risks, title matters, inability to obtain any required third party
consents, operating hazards, metal prices, political and economic
factors, competitive factors, general economic conditions,
relationships with strategic partners, governmental regulation and
supervision, seasonality, technological change, industry practices
and one-time events. In making the forward-looking
statements, the Company has applied several material assumptions
including, but not limited to, the assumptions that: (1) the
proposed exploration and development of mineral projects will
proceed as planned; (2) market fundamentals will result in
sustained metals and minerals prices and (3) any additional
financing needed will be available on reasonable terms. The
Company expressly disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events or otherwise except as otherwise
required by applicable securities legislation.
The Company cautions that it has not completed any feasibility
studies on any of its mineral properties, and no mineral reserve
estimate has been established. In particular, because the
Company's production decision relating to Meridian Mineraçao Jaburi
S.A, manganese project is not based upon a feasibility study of
mineral reserves, the economic and technical viability of the
Espigão manganese project has not been established.
The TSX Venture Exchange has neither approved nor disapproved
the contents of this news release. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Meridian Mining S.E.
