TIDMAMC
RNS Number : 1796P
Amur Minerals Corporation
16 February 2021
16 February 2021
AMUR MINERALS CORPORATION
(AIM: AMC)
Kun-Manie Production Licence Amendments and Activity Update
Amur Minerals Corporation ("Amur" or the "Company"), the nickel
copper exploration and development company focused on the Kun-Manie
project (the "Project") located in the Far East of Russia, is
pleased to report that the terms and conditions for the Company's
Kun-Manie "Detailed Exploration and Mine Production Licence"
("DEMP"), have been amended and registered with Rosnedra, the State
Licencing Agency. The certified modification to the DEMP was
received 4 February 2021 from Amurnedra and is dated effective 30
November 2020.
The amendments are related to the delivery dates for two terms
and conditions specific to the registered 36 square kilometre ("
km(2") licence ( 15883 ). During processing of the amendment to the
DEMP, work on the Permanent Conditions TEO ("TEO") has progressed,
identifying further optimisation opportunities and continues toward
completion. To further evaluate the quality of the TEO results
(compiled by Oreall), the Company engaged an external consultant to
independently verify Oreall's work.
In addition, RPM Global ("RPM") has been engaged to update the
20 March 2018 JORC resource estimates to include the 32,526.5
meters of drilling completed in 2018. The 169 holes are distributed
throughout the Maly Kurumkon / Flangovy ("MKF"), Vodorazdelny
("VOD") and the now largest and constinuous Ikenskoe / Sobolevsky /
Kubuk ("ISK") deposits. The combination of RPM's and Oreall's
enables the Company to ev aluate and compare the Project potential
based on both Russian (required by mandatory regulatory
considerations) and western funding opportunities for joint venture
alternatives, various and combined off take agreements and / or
merger and acquisition considerations.
The Company submitted the application to amend the delivery date
of the 1 December 2020 TEO which has now been successfully extended
to 1 December 2021 for its delivery.
Highlights:
-- Necessitated by delays induced by the Covid-19 pandemic where
the impact of working remotely, the need to maintain social
distancing and timely availability of key contract personnel, the
Company submitted the application to amend the delivery date of the
1 December 2020 TEO. The amended delivery date for the TEO has been
extended to 1 December 2021.
-- In addition, the delivery date of the ensuing Mine Plan
design (including detailed comprehensive Project engineering) has
been extended. This work can only be implemented post-delivery of
the TEO and its subsequent approval allowing for Russian reserve
registration in accordance to the State Committee on Reserves
"(GKZ") regulatory requirements. The Mine Plan is now due 1 June
2023.
-- During the DEMP modification process, ongoing work has
continued toward completion of the TEO. As reported in a RNS dated
25 November 2020, the remainder of the work necessary for
completion of the TEO included the compilation of capital and
operating costs and the subsequent evaluation of economic potential
of the Project per Russian Federation standards and
requirements.
-- Open pit designs generated by Oreall are also being
independently evaluated. An independent evaluation by an external
consultant will provide additional pit designs for a greater number
of cutoff grades than the Oreall scope of work which is linked to
Russian regulatory criteria which evaluates fewer designs at
specific cutoff grades.
-- Previous western study work on the MKF deposit by RPM (RNS
dated 9 April 2018) confirmed a combination of open pit and
underground operation would generate an enhanced revenue flow on
this Project.
-- Ongoing Company audits and reviews of the Oreall TEO results
have identified the need to include Russian based open pit versus
underground trade off studies allowing for the identification of a
preferred life of mine production scenario(s) for the deposits of
MKF and ISK. VOD is an open pit only target as the depth of the
mineralisation is at and near the surface. For MKF and ISK, results
presently indicate a staged operation may be best for the
development and life of mine production plans. This work is under
evaluation.
-- RPM is presently compiling an update to the JORC resource
estimates for MKF, VOD and ISK. These results will provide the
ability for the Company to directly compare the Russian and western
resource / reserve generated results.
-- RPM's and Oreall's work will also provide the Company with
the ability to evaluate and compare the Project potential based on
both Russian (required by mandatory regulatory considerations) and
western funding opportunities that may be considered from Russian
versus western joint venture alternatives, various off take
companies and / or merger and acquisition potential.
Robin Young, CEO of Amur Minerals Corporation, commented :
"As a result of the impact of the Covid-19 pandemic and having
extended the delivery dates for the Permanent Conditions TEO and
the subsequent ensuing Mine Plan wherein detailed engineering for a
full year for each, we are now fully assured on maintaining the
integrity of the Detailed Exploration and Mine Production licence
for Kun-Manie.
"Ongoing work continues on the compilation of the TEO and we
have further identified that underground production may be a viable
and better financial option as previously defined by RPM in
previous study work. Simultaneously to the TEO work, we are
awaiting JORC resource estimates allowing for the verification of
the Russian reserves. The availability of Russian and western
resource / reserve estimates provides Amur with the ability to
simultaneously assess and contrast the funding potential of
Russian, western or a combination for joint venture consideration,
alternative or combined off take agreements and the assessment of
any merger / acquisition opportunities."
For completeness and to provide a more detailed understanding of
the licence amendment procedure, TEO considerations and constraints
and geographical financial setting, additional information is
provided below.
Licence Amendment
Russian state, regional and federal mineral resource licencing
organisations have been responsive to changes in the terms and
conditions denoted in the contained terms and conditions of Russian
wide mineral licences as necessitated by the Covid- 19 pandemic.
Various amendment alternatives have been and are available to
companies. The Company's amendment programme was based on a full
amendment to the licence itself. Other lesser regulated amendment
options are available, however, the Company undertook the full
amendment process as it is considered to be the most conservative
and most solidly based amendment in the Rosnedra regulatory
system.
TEO
The Permanent Conditions TEO provides the operating design for a
mining operation. The GKZ reserve estimate presented within and
registered by the GKZ subsequent approval (with negotiated
modifications) is a benchmark for the operation. It is this reserve
from which production must be derived.
Finance - Russia versus the West
Kun-Manie is located within the Russian Federation and therefore
must be engineered, designed, constructed and operated in
accordance with Russia Federation regulatory constraints. The
successful completion of the work allows for financing within
Russia and other similar economies that recognise the Russian
system.
For large scale investments, often a consortium of financial
institutions is required to fund the Project. Assuming Kun-Manie is
such a project, the documentation to obtain a funding structure
external Russia can and will likely vary substantially. This is
especially key to the area of resource and reserve reporting as the
Russian and western (typically JORC) substantially differ in the
calculation methodology and reporting of reserves.
The Company's use of RPM to calculate a JORC estimate based on
the same information used to compile the Russian reserve estimate
provides Amur with the ability to directly compare results based on
two apparently divergent approaches to project evaluation. By
working two parallel assessment methods, Amur can better evaluate
financing of the Project from more than one financial system.
Competent Person's Statement
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 17
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.
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.
For further information, see the Company website at
www.amurminerals.com and its twitter account of amur_minerals .
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals Corp. S.P. Angel Corporate Finance Blytheweigh
LLP
Robin Young CEO Richard Morrison Megan Ray
Adam Cowl Tim Blythe
+44 (0) 20 7138
+7 (4212) 75 56 15 +44 (0) 20 3470 0470 3204
Description of Kun-Manie Licences (Strategic Law) and Land
Allotments
Through its wholly owned subsidiary ZAO Kun-Manie, Amur
possesses 100% production rights for the 36.2 km(2) DEMP. It is
from within this area that mining will be implemented. Additional
licence and land allotments will be necessary to bring the Project
into production. A licence is attributable to use of resources
(including water usage) and land allotments can be considered to be
land use areas, as well as all non-mine specific extraction areas,
including site based facilities to fully treat the mined material,
the access road right away and the rail station on the BAM rail
line (possible site of electric furnace / flash smelter). More
specifically:
-- The DEMP is the area from which Amur can mine the
mineralisation. Mine specific facilities such as underground
portals, ventilation shafts, open pits and waste dumps, road,
necessary near mine shops and fuel stations, etc. are to be fully
located within the boundary limits of the DEMP. An additional water
licence from which to source water for ore treatment and staff
usage is required and the location of the licence has been
identified.
-- Land allotments to support the operation are also required.
Three distinct allotments will be needed. These are designated
external to the DEMP area boundary where all other mine site
support facilities (considered to be an Industrial Site) will be
located, the right of way for the access road (considered to be a
Linear Object) and the rail station (possible Furnace / Flash
Furnace facility) adjacent the Baikal Amur rail line (another
Industrial Site).
Licence Chronology
The Company originally obtained a reconnaissance licence over an
area of 950 km(2) . During exploration, a 36.2 km(2) mining
potential area within the reconnaissance licence was identified for
which Amur applied for the production rights. The Company holds
100% production rights within the DEMP and the area located
external to the DEMP has been returned to the Russian
Federation.
Reconnaissance Licence
In 2004, a five year reconnaissance licence ( 01497 ) was
granted allowing for the exploration of nickel and copper within an
area of 950 km(2) . Selection of the highly prospective area had
been made based on the area containing:
-- Russian Federation state sponsored reconnaissance results of
the Stanovoy Mountain system where several anomalous areas of
nickel and cobalt had been identified during stream sediment and
grab sampling programmes. Airborne geophysical surveys also covered
the region.
-- Falconbridge Limited Canada ("FLC") had previously drilled
ten diamond core holes (completed in 2000) near and within two
mineralised outcrops of exposed sulphide mineralisation (the VOD
and IKEN deposits). Economic grades of mineralisation were
identified at both deposits. FLC relinquished the licence in 2000
due to weakening metal prices, labour problems at one of its
external Russia facilities, dampening profits and the decision to
cut back production (including exploration).
The terms and conditions of the licence required that sufficient
exploration and drilling be completed allowing for the compilation
of a certified reserve approved by the Russian Federation State
Committee on Reserves ("GKZ"). Upon acquisition of the
reconnaissance licence, the Company undertook a two phased
exploration approach. These included:
-- Licence wide, airborne geophysics (helicopter) being flown
and exploration personnel completing geological mapping and
sampling reconnaissance. Mapping and sampling along all ridge
crests and ravines throughout the licence area was completed with a
total of 1,548 kilometres ("km") being traversed. The objective was
to identify the source of the geochemical anomalies and identify
and specific additional drill targets.
-- Drilling and trenching were implemented to confirm FLC drill
results and expand the aerial limits of drilling to more fully
define the extent of the mineralisation. By the end of 2008, the
Company had drilled the limits of the VOD deposit, expanded IKEN
and drill discovered a new deposit, MKF.
By the end of 2009, the reconnaissance exploration work had
identified the Kurumkon Trend as the primary exploration target
within which to focus future drilling. The GKZ had also approved
the reserve estimate compiled by Sibsvetmetniiproyect and granted a
"Certificate of Discovery" for the deposits of VOD, IKEN and MKF.
The certificate and the certified reserve provided the Company with
the right to obtain an extension of the licence and apply for a
"Detailed Exploration and Mine Production" (the DEMP) licence.
Over the next six years, the Company continued exploration
drilling focused on the Kurumkon Trend and the immediate area of
the yet to be awarded DEMP. Having been awarded three consecutive
two year extensions to the exploration licence (the final extension
expired 31 December 2014), drilling had expanded the known limits
of the deposits and the KUB deposit was also discovered.
In late 2014, the Company compiled the mandatory closure report
enabling it to return unwanted property located external to the
DEMP boundary limits to the Russian Federation. The closure report
is a key document as it specifically confirms that there are no
encumbrances related to the returned ground and that all necessary
work obligations per the terms and conditions of the licence had
been completed.
DEMP
After award of the Certificate of Discovery and in June 2010,
the Company applied for the DEMP which was focused on an area of
36.2 km(2) aligned along the Kurumkon Trend and fully contained
within the explored limits of the exploration area. The boundary
limits for the DEMP included the MKF, VOD and IKEN deposits as well
as highly prospective ground located along the Trend including the
then undrilled (but trenched) area of KUB.
In May 2015, Russian Prime Minister Dmitry Medvedev approved the
Company's DEMP application (which had been modified to include
consideration of exploration results acquired during the approval
process) for Kun-Manie. This enabled the Ministry of Natural
Resources ("MNR") and Rosnedra to issue the licence, subject to
Amur's one-time payment of RUB 23.6 million (c US$ 429,000 at the
time of the payment) within 30 days of the registration of the
final document, which was duly done.
The licence ( 15883 ) grants Amur the right to recover all value
from the minerals defined to be present at Kun-Manie. As the
Certificate of Discovery only specifically stated nickel and
copper, it was amended to state recoverable metals to include
nickel, copper, cobalt, platinum, palladium, gold, and silver. All
drilled mineralisation (through 2018) lies within the limits of the
production licence and The Company's responsibilities under the
terms of the DEMP licence are:
-- That the results of a pre-production evaluation are to be
presented in a Permanent Conditions TEO (Russian Feasibility Study)
and the final Reserves Estimate Report to the State Reserves
Committee ("GKZ") 1 December 2020 (Extended one year to 1 December
2021). Reserves are to be certified by the GKZ.
-- A mining plan based on the GKZ stated reserves to be approved
by June 2022 (Extended one year to June 2023).
-- A re-cultivation / site remediation plan is to be submitted to the government one year before decommissioning.
-- Annual activity reports to be submitted to Rosnedra and
Amurnedra (local branch of Rosnedra), which have been completed
since the award of the DEMP.
Strategic Investments Law Impact
Approval and award of the DEMP required more than five years.
The primary reason for the extensive delay was the introduction of
a new law. In mid-2008, the Russian Federation enacted Federal Law
No. 57-FZ related to foreign investment into assets or companies
considered to be strategic to the nation. This law is entitled, "On
the Procedure for Making Foreign Investments in Business Entities
of Strategic Importance to National Defense and State Security"
(the "Strategic Investments Law" or the "Law No. 57-FZ").
The issuance of a DEMP markedly changed with the introduction of
the law by adding in additional agencies to the review process when
a strategic asset is to be awarded to a foreign entity.
Administration of the law included the four additional agencies
being the Federal Antimonopoly Service ("FAS"), Ministry of Defense
("MOD"), the Federal Security Service ("FSB"), and the Ministry of
Economic Development ("MED").
Within the mining sector and as a part of the then newly
implement 57-FZ, the newly defined concept of Strategic Projects
was adopted. Based on the metal contained and also the amount of
metal, many projects immediately became Strategic and entered unto
a Strategic List, no matter who controls the mineral rights. In the
case of Kun-Manie, the presence of a GKZ certified reserve placed
the Project on the Strategic List as it contained nickel, cobalt,
platinum and palladium (all considered to be Strategic Metals).
Copper could also be considered Strategic if its reserve exceeds
250,000 tonnes. As a foreign controlled Strategic project, it was
mandatory Amur proceed through the newly implemented Strategic
system to obtain its DEMP.
The process is managed by Rosnedra and is conducted on a highly
linear basis. After application for the DEMP with Rosnedra, it
submits the necessary information sequentially to each four
agencies. Once an agency has approved the submission, Rosnedra
submits it to the next agency. This process continues through the
four agencies. With all four approvals, Rosnedra then reviews and
submits a package to the MNR for its final review, approval and
submission to the Russian Government for final authorisation. At
the time of submission, the Russian Government's representative was
the Russian Prime Minister (Mr. Dimitry Medvedev) who officially
stamps the approval.
As the application moved through the newly created system and
changes to 57-FZ were made during the approval process, delays were
encountered for various reasons. It is noted that Amur was the
first mining company to enter the strategic review process. General
milestones and actions follow:
-- Submission of the application to Rosnedra / MNR in June 2010.
-- FAS, MOD and FSB approvals were successively and rapidly
completed with submission to MED in December 2010. A key part of
MED's remit was to calculate the one-time payment due on
registration of the DEMP.
-- In March 2013, the one-time calculation procedure was
reassigned to Rosnedra who immediately assigned the task to
Rostat.
-- Rostat completed the calculation in May 2013. As the FAS, MOD
and FSB approvals had expired due to the delay by MED, Rosnedra
obtained updated materials from the Company and immediately filed
the new materials with each of the agencies in turn.
-- In September 2013, MED reviewed the documentation and noted
that in light of the new definition of Strategic deposits and that
Kun-Manie was one such deposit, the Company may wish to amend its
Certificate of Discovery. The 2009 Certificate of Discovery stated
the Company had the right to mine "nickel, copper and associated
minerals". By specifically adding the metals to be recovered,
confusion would be avoided. This was immediately implemented by the
Company with the assistance of Rosnedra.
-- In July 2014, the updated Certificate of Discovery was issued
and specifically states that the Company has the right to mine
"nickel, copper, cobalt, platinum, palladium, gold, silver and
sulphur". Rosnedra immediately actioned a recalculation of the
one-time payment using the most recent GKZ reserve statement.
-- As all documents and approvals had once again expired,
amended documents were again provided to Rosnedra for submission to
the four agencies resulting in all four approving the application
for the DEMP with MED completing its work in November 2014.
-- In November 2014, Rosnedra provided MNR with all necessary
approvals from its review and those rendered during the strategic
review process. The MNR approved the package and forwarded it to
the Russian Government for signoff, the final step in the
process.
-- In May 2015, final authorisation was obtained when Mr.
Dimitry Medvedev approved issuance of the licence.
-- In June 2015, the MNR and Rosnedra registered the licence
which triggered a 30 day period for the Company to submit its
one-time payment (23.6 million RUR). This was duly completed and
verified by the MNR and Rosnedra well in advance of the
deadline.
The Company now holds 100% of the production rights to
Kun-Manie. Law 57-FZ also states no foreign entity shall hold more
than 25% of a strategic asset. As the Company had begun its work
well in advance of the implementation of the law in 2008 and
considering that it was in good standing and compliant with
government procedures, Amur was allocated 100% control of the
production rights.
Hydrological Licence
In 2015, the Company acquired water licence 02708 which expired
December 2019. This five year licence allowed the Company to
conduct subsurface exploration for identification of sources of
technical and potable water in the area of the currently selected
mill site. The necessary first phase of water exploration has been
completed and has allowed for the selection of a more limited area
from within which water can be extracted for the operation of
Kun-Manie. This licence is easily acquired and it is planned to
acquire in the future.
Land Use Allotments
Land use allotments will need to be acquired. An allotment
allows for use of the land for non-mining specific (excavation)
activities but are required to host the facilities to process the
mill feed, fully support the operation and store tailings from the
plant. In addition, two additional but separate allotments will be
required. The longest is the 338 km long access road and the rail
station to be located immediately adjacent the BAM rail line.
Schematics of the proposed allotment areas can be viewed through
the link below.
https://amurminerals.com/content/wp-content/uploads/20210215_RNS.pdf
Mine Area Industrial Allotment
Located to the south of the DEMP, the mine support operational
industrial complex is planned for construction. This includes all
mine area roads between the mine areas and mill site, the tailings
storage facility, the stockpile(s), processing plant, power
station, boiler house, all mine offices, personnel support
facilities, maintenance and repair shops, consumable and spare
storage, explosives magazine, water well field and landfill
facilities.
Schematics of the currently identified configurations are
provided in the link above presenting a potential land allotment
configuration a more detailed operations layout for the ore
processing facilities area. The allotment will be applied for and
assigned once final designs of the full area footprint are
established.
Access Road Allotment
Upon completion of the final road design and approval by the
Russian Federation, an allotment will be needed for construction
and exploitation of the road. A right of way width of up to 50 m
will be obtained along the length of the 338 km long road. The
current location of the planned access road shown in red on the
link below. For convenience and orientation purposes, the winter
ice road is depicted in yellow.
Rail Station Allotment
A minimum allotment of approximately one km(2) is required for
the rail station. This will enable full operational support of the
annual six million tonne mill capacity operation with regard to
resupply of the operation and shipment of concentrate to a
purchaser.
Inclusion of the Furnace / Flash Smelter option requires
expansion of the allotment to two km(2) allowing for the addition
of the furnace and the associated furnace waste that will be
generated. Additional storage is also required for coal and
limestone needed to "smelt" the concentrate in generation of a LGM.
A preliminary lay out of the footprint allotment including
consideration of building the furnace.
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