TIDMAMC
RNS Number : 0682R
Amur Minerals Corporation
26 February 2019
26 February 2019
AMUR MINERALS CORPORATION
(AIM: AMC)
Kun-Manie Pre-Feasibility Study
Amur Minerals Corporation ("Amur" or the "Company"), the
nickel-copper sulphide exploration and development company focused
on the far east of Russia, is pleased to announce the release of
its Pre-Feasibility Study ("PFS") on the Company's Kun-Manie
nickel-copper sulphide project ("Kun-Manie" or the "Project").
The PFS is a significant milestone, reinforcing the Project's
technical and economic viability, and consolidates the Company's
commitment to delivering the best outcomes for the project and
Amur's shareholders. The PFS covers two production scenarios for an
annual mining production rate of six million tonnes per annum. The
first option is the Toll Smelt option ("TS Option") which provides
the swiftest path to revenue generation, where the concentrate is
sold to a purchaser. The second option is where the Company
constructs and operates an electric furnace / flash smelter ("FFS
Option") converting the concentrate to a Low Grade Matte ("LGM")
which allows for the capture of additional revenues from the
by-product metals of copper, cobalt, platinum and palladium.
Highlights
-- Project parameters:
o JORC Mineral Resource Estimate containing 155.1 million ore
tonnes comprising a nickel equivalent grade of 1.02%, equating to a
total of 1.58 million equivalent tonnes of nickel
o A three year construction period and a 15 year production
period with upside potential to extend the LOM
o Production will derive from four open pits and one underground
mining operation
-- Project economics:
o TS Option
-- NPV post-tax at 10% discount rate of $614.5 million using a
long-term nickel price of $8.00 per pound
-- Post tax IRR of 29.3%
-- Total free post tax cashflow of $2,041 million
o FFS Option
-- NPV post-tax at 10% discount rate of $987.4 million using a
long-term nickel price of $8.00 per pound
-- Post tax IRR of 34.7%
-- Total post tax free cashflow of $2,980 million
-- Low cost operations:
o C1 costs within the second lower quartile for nickel
producers
-- TS Option estimated $3.87 per pound of payable nickel
-- FFS Option estimated $2.34 per pound including additional
by-product revenues
-- Capital costs and infrastructure:
o Pre-production capital expenditure
-- TS Option - $570.4 million with a payback period occurring
three years
-- FFS Option - $695.0 million with a payback period three
years
-- Project upside potential:
o 2018 drill programme to be incorporated:
-- Increase in the Mineral Resource Estimate
-- Expansion of mine life
-- Optimisation of production schedule
o Metallurgical test work to reduce the magnesium oxide
content
o Potential to generate a separate copper concentrate stream
The strength of the PFS puts Amur and the project in an
attractive position for the Company to continue the implementation
of its strategic plan and identify partnerships that will add to,
and complement, the Company's exiting experience and influence in
order to bring Kun-Manie into development.
Robin Young, CEO of Amur Minerals Corporation, commented:
"The PFS provides a robust review of Kun-Manie's value, scale
and viability and it is our intention to explore further the
strategic options that will enhance the Company's continued
development of the project. We believe that it puts the Company in
a strong position and provides attractive economics to invite
discussions with varied parties to strengthen our team and deliver
production at Kun-Manie.
"Additionally, there is significant potential for further upside
to this PFS, following the Company's successful drill programme
last year, which yielded a number of positive results including
expansion of the mineral resource estimate and mine life.
"As a Company, we are encouraged by the PFS and the further step
it has created in positioning the project to attractive partners
that will support Amur's goal of seeing Kun-Manie being developed
further and value delivered to shareholders."
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance Blytheweigh
LLP
Robin Young CEO Lindsay Mair Megan Ray
Soltan Tagiev Tim Blythe
+44 (0) 20 7138
+7(4212)755615 +44(0)20 3470 0470 3203
Pre-Feasibility Executive Summary Overview
Amur Minerals Corporation ("AMC"), a Far East Russia focused
mineral resource exploration and development company holds 100% of
the production rights to the Kun-Manie nickel, copper sulphide
project located in Amur Oblast, of the Russian Federation. It is
one of the largest undeveloped nickel sulphide resources globally
and is situated immediately adjacent to the three largest nickel
consuming nations in the world (China, Korea and Japan), by-product
metals cobalt, platinum and palladium will also be recovered. AMC
has compiled a Prefeasibility Study ("PFS") evaluating the
technical and economic potential of the Kun-Manie project that has
been reviewed and evaluated by an independent and experienced
mining specialist.
Two operational scenarios are presented and include the
construction and operation of all facilities required to mine and
process six million tonnes of ore per annum at the Kun-Manie mine
site, a 338 kilometre ("km") long access road linking the mine site
to the Baikal Amur ("BAM") rail line allowing resupply to and
concentrate delivery from the mine site, the supporting rail
station, the shipment of saleable product to the Port of
Vladivostok and incumbent offtake agreement considerations.
The Base Case represents the quickest and lowest initial capital
cost investment pathway to revenue generation. This option consists
of the sale of concentrate (FOB Port of Vladivostok) to a purchaser
based on typical nickel industry offtake Net Smelter Return ("NSR")
schedules. This is the Toll Smelt ("TS") Option.
The second scenario utilises the same operational considerations
used in the TS Option. However, it includes the addition of an AMC
constructed and operated Electric Furnace / Flash Smelter ("FFS")
located at AMC's BAM rail station. This owner operated facility is
planned to treat the sulphide concentrate generating a Low Grade
Matte ("LGM") which would be shipped to the Port of Vladivostok.
This FFS Option includes consideration of typical intermediate
nickel product offtake terms. The FFS Option has a similar lead
time to revenue generation, although its initial capital
expenditure is higher than that of the TS Option. The LGM product
is anticipated to produce substantially increased revenues derived
from credits related to the recovery of by-product metals not
available to the TS Option.
The PFS establishes that Kun-Manie is technically and
economically viable for the two production scenarios. Being a
sulphide deposit, the technical risk related to the generation of a
final nickel product in both cases is substantially reduced from
that of lateritic nickel deposits. These Options utilise industry
proven mining approaches, proven sulphide flotation methods in
concentrate generation and the subsequent treatment of the
concentrate based on proven metal extractive practices.
Using a long term nickel price of US$ 8.00 per pound nickel
($17,637 per tonne), the economic potential of Kun-Manie has been
determined using cash flow models for both production scenarios.
Payable nickel for the TS Option is projected to be 24,306 tonnes
per annum, whilst payable nickel (plus credits for copper, cobalt,
platinum and palladium) for the FFS Option will average 29,155
nickel equivalent tonnes. Summarised in Table 1.1, robust economic
results based on Net Present Values ("NPV"(10%) ), exceeding the
Initial Capital investment, the Internal Rate of Return ("IRR")
ranging from 29% to 35% and the Payback Period ("PP") occurring in
the second year of operations are determined. Sensitivity analyses
of +/-25% for the nickel price, operating costs and capital
expenditures indicate the project is most sensitive to the nickel
price.
Table 1.1
Economic Results
Production NPV (10%) IRR PP Initial Sustaining Free Cash Flow
Capital Capital
Option $US (m) (%) (Yrs) $US (m) $US (m) $US (m)
TS $614.5 29.3% 3* $570.4 $494.3 $2,041
---------- ------ ------- --------- ----------- ---------------
FFS $987.4 34.7% 3* $695.0 $495.2 $2,980
---------- ------ ------- --------- ----------- ---------------
*PP rounded up.
Alternative Performance Measures and Reconciliation ("APMR")
indices are summarised in Table 1.2. Life of Mine ("LOM") C1 Cash
Costs per payable nickel unit is indicated to be in the order of
$3.87 per pound ($8,532 per tonne) for the TS Option and $2.45 per
pound ($5,401 per tonne) for the FFS Option including credits for
recovered by-product metal (copper, cobalt, platinum and
palladium). C1 Cash Costs for both operating scenarios fall within
the second lowest quartile of industry reported C1 Cash Cost. On a
Capital Intensity basis (Initial Capital Expenditure / Average
Annual Payable Nickel Production unit), the TS $10.64 per pound
($23,450 per tonne) and FFS $10.82 per pound ($23,838 per tonne)
Options lie at the mid-range when compared to 16 selected nickel
sulphide projects. Both Options are lower than the median CI cost
project West Musgrave ($25,897).
Table 1.2
APMR Analytical Results
AMPR Cost Basis TS Option FFS Option
C1 Cash Cost $8,536 / t $5,390 /t
$3.87 / lb $2.45 / lb
------------- ------------
All In Sustaining $9,890 /t $6,521/t
Cost $4.49 / lb $2.96 / lb
------------- ------------
Fully Loaded All $10,473 /t $7,252 / t
In Cost $4.75 / lb $3.29 / lb
------------- ------------
Capital Intensity
Cost 24,306 t 29,155 t
------------- ------------
Initial Capital
Cost $570.4 m $695.0 m
------------- ------------
Capital Intensity $23,450 / t $23,838 t
Cost $10.64 / lb $10.82
------------- ------------
The PFS is based on information available in June 2018.
Substantial upside opportunities have been identified within this
study require further investigation. The successful 2018 drill
programme results were completed after the June 2018 cutoff date
for inclusion in the PFS. Some of the major factors include an
increase in the Mineral Resource Estimate ("MRE"), expansion of the
mine life based on Mining Ore Reserve increases, optimisation of a
production schedule to move higher revenue material forward
allowing for enhanced early cash flow during the first 10 years of
production when reduced Metals Royalty ("MR") and Net Profits Tax
("NPT") are available, metallurgical test work to reduce the
magnesium oxide content for which penalty fees are applied during
smelting, the potential to generate a separate copper concentrate
stream providing copper stream revenues, negotiate better off take
agreement terms, and define Russian government low cost loan
considerations for the access road.
This PFS is based on multiple independently compiled documents
by industry recognised and certified organisations. The Company has
compiled the PFS based on this information and the document has
been audited and modified as necessary by Mr. Kevin Wright, a
Qualified Person ("QP") as set out in National Instrument 43-101
("NI43-101") and is also defined to be a Competent Person ("CP") as
set out in Section 11 of the JORC Code 2012 Edition. In addition,
Alternative Investment Market ("AIM") standards are met by the
auditor which include being professionally qualified, in good
standing within Professional Associations, has a minimum of five to
10 years of experience, the work is fee based (no success fee) and
works in the interest of the investors and not the company.
Notes to Editors
The information contained in this announcement has been reviewed
and approved by the CEO of Amur, Mr. Robin Young. Mr. Young is a
Geological Engineer (cum laude), a Professional Geologist licensed
by the Utah Division of Occupational and Professional Licensing,
and is a Qualified Professional Geologist, as defined by the
Toronto and Vancouver Stock Exchanges and a qualified person as
defined by the AIM Rules for Companies. An employee of Amur for 12
years, previously Mr. Young was employed as an independent
consultant with Fluor Engineers, Fluor Australia and Western
Services Engineering, Inc. during which time his responsibilities
included the independent compilation of resources and reserves in
accordance with JORC standards. In addition, he was the lead
engineer and participant of numerous studies and projects requiring
the compilation of independent Bankable Studies utilised to finance
small to large scale projects located worldwide. Mr. Young is
responsible for the content of this announcement.
For further information, see the Company website at
www.amurminerals.com.
Glossary
DEFINITIONS OF EXPLORATION RESULTS, RESOURCES & RESERVES
EXTRACTED FROM THE JORC CODE: (December 2012) (www.jorc.org)
A 'Mineral Resource' is a concentration or occurrence of
material of intrinsic economic interest in or on the Earth's crust
in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which tonnage, grade and mineral content can be
estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain
quality and reliability.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a
reasonable level of confidence. It is based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or
inappropriately spaced to confirm geological and/or grade
continuity but are spaced closely enough for continuity to be
assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough
to confirm geological and/or grade continuity.
An 'Ore Reserve' is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials
and allowances for losses, which may occur when the material is
mined. Appropriate assessments and studies have been carried out,
and include consideration of and modification by realistically
assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors. These assessments
demonstrate at the time of reporting that extraction could
reasonably be justified. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proved Ore
Reserves.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCEAXASASPNEFF
(END) Dow Jones Newswires
February 26, 2019 02:01 ET (07:01 GMT)
Amur Minerals (LSE:AMC)
Historical Stock Chart
From Apr 2024 to May 2024
Amur Minerals (LSE:AMC)
Historical Stock Chart
From May 2023 to May 2024