TIDMAMC
RNS Number : 4395R
Amur Minerals Corporation
29 June 2015
29 June 2015
AMUR MINERALS CORPORATION
(AIM: AMC)
Operational Blueprint Defined For Kun-Manie
Amur Minerals Corporation ("Amur" or the "Company") is pleased
to present the forward looking Operational Blueprint ("Blueprint")
for the development of the Kun-Manie nickel copper sulphide project
located in the Russian Far East. The optimised design has been
derived from the combination of an extensive Company generated
update to the 2007 SRK Consulting Ltd ("SRK") Pre Feasibility Study
("PFS") and the consideration of the terms and conditions as
contained within the newly acquired "Detailed Exploration and
Production Licence" (the "Licence").
Highlights of the Operational Blueprint include the
following:
-- Existing resources can sustain a 15 year production period
where 6.0 million tonnes per annum are produced. Infill drilling
will be required.
-- Mine production will be derived from four open pits and two underground operations.
-- A simple flotation concentrate will be generated which can be
smelted by the Company owned smelter as verified by Outotec.
-- The project has an estimated operating cost per ore tonne of $US 34.86 per ore tonne.
-- The total initial capital expenditure is projected to be $US
1.38 billion to be expended in a two year construction period.
Sustaining capital is estimated to be $US 474 million over 15
years.
-- The Net Present Value ("NPV") using a 10% discount rate is
projected to be $US 0.71 billion and $US1.44 billion using the long
term nickel prices of $US 7.50 per pound and $US 9.50. per pound
These economic projects cover an owner operated smelter and
refinery.
The Blueprint establishes an operational plan for the
comprehensive beneficiation of the sulphide ores from mining
through the sale of final metal products generated by a Company
owned smelter / refinery on the international market. Definition of
the Blueprint included various trade off sensitivity studies that
identified the most profitable configuration for Kun-Manie. From
the plan, the operational configuration, technical operating
parameters, operating and capital cost expenditures as well as pro
forma cash flow projects have been established by the Company. The
results will be independently audited by one of three shortlisted
western mining consultancies possessing Russian experience.
Robin Young, CEO of Amur Minerals Corporation, commented:
"This Operation Blueprint contained within our PEA, represents
ten years of successful exploration at Kun Manie, along with a
total redesign of the project. As we worked on the study, we
challenged all past and previous assumptions. As a result, mining
will best be performed using a combination of underground and open
pit productions, power will be generated on site, a substantial
access road upgrade can be supported and the construction of own
smelter and refinery.
"These choices make a tremendous difference to the bottom line,
which we measure in global project NPV. Moving forward through
infill drilling, metallurgy and more detailed engineering studies,
we will continue to search for ways to optimise the project so that
it delivers the highest possible value to the shareholders. We are
comfortable with the final values we have generated as a Company,
however, we are compiling a Request for Proposal from three
independent companies."
Enquiries:
Company Nomad and Broker Public Relations
Amur Minerals S.P. Angel Yellow Jersey
Corp. Corporate Finance
LLP
Robin Young Dominic Barretto
CEO Ewan Leggat Kelsey Traynor
Katy Birkin
+44 (0) 7981 +44 (0) 20 +44 (0) 77
126 818 3470 0470 99 003 220
Notes to Editors
The information contained in this announcement has been reviewed
and approved by the CEO of Amur, Robin Young. Mr. Young is a
Geological Engineer (cum laude) and is a Qualified Professional
Geologist, as defined by the Toronto and Vancouver Stock
Exchanges.
For further information, see the Company website at
www.amurminerals.com.
Long Term Operational Blueprint
In 2014, the Company initiated an internal evaluation and update
of the 2007 SRK Consulting Ltd ("SRK") Pre Feasibility Study
("PFS"). A substantial amount of technical data had been acquired
since the 2007 PFS was issued, including the increase in the
resource base through step out drilling and the discovery of two
new deposits. The first conclusion derived from the update was that
the additional resource could support a 20 year mine life producing
at a nominal production rate of 4.0 million tonnes per year. This
work confirmed that infill drilling should take priority over
resource expansion, which also remains highly prospective.
In mid-2014, the PFS update was under executive review and
prepared for release when two events impacted the quality of the
study, placing its release on hold.
-- Economic sanctions placed against the Russian Federation
required a reassessment of the equipment selection by identifying
alternatives from within Russia and from sources outside the
sanctions bloc.
-- A rapid devaluation of the Russian Rouble impacted the
quality of all operating costs and selected capital equipment
estimates. This especially disrupted the projections related to
labour costs. The devaluation was so significant that it
invalidated significant portions of the study.
During Q3 and Q4 2014, the Company continued to update the study
information where possible whilst monitoring the Rouble exchange
rate. By February 2015, the Rouble had stabilised and the Company
resumed its update of the study, which included a key change in
scope. In Q4 2014, the terms and conditions for the Production
Licence were negotiated (though final approval was still pending)
with a 20 year Production Licence life being established. As a
result, the Company increased the annual nominal throughput from
4.0 million to 6.0 million tonnes. It was determined that the
existing resource inventory could support the increase as well as
sustain a total production of 90 million tonnes for a 15 year mine
life.
Another key decision was undertaken by management wherein a
longer term vision of the operation was implemented. This called
for the development of an 'Operational Blueprint' of an optimised
conceptual design, providing for a fully integrated operation that
will produce a substantially improved financial assessment for
Kun-Manie. By doing so, a series of trade off studies were
identified wherein each step of the proposed operation could be
optimised. In June 2015, the Operational Blueprint and the
associated economic evaluation were completed.
It is important to note the reasons that the Company is
restricted from specifically identifying its work as a PFS by JORC
standards and therefore considers the results to be at a PEA level.
There are three primary reasons for this use of the study as a PEA.
Firstly, the project analysis included Inferred resource as
reserves, portions of the work and results were derived internally
by the Company, although much of the work is based on external
results compiled by qualified specialist companies and our CEO, Mr.
Robin Young is a licenced professional geologist provided
substantial input to the document which could be considered to be a
conflict of interest. Until the PEA has undergone independent
audit, the Company cautions the shareholder that there are forward
looking statements which could vary substantially from results
obtained in the future. Presently, the Company has shortlisted
three internationally recognised mining consultancies to complete
the audit of the PEA which contains new information and
identifiable changes from 2007 allowing the Company to update its
strategy in a way that can significantly enhance the long-term
economics of mining at Kun Manie. Pressing ahead without
consideration of important new data could sacrifice profitability
for short savings of time, a trade-off the Company could not have
justified to its shareholders.
The Proposed Operational Blueprint
The PEA has established the Operational Blueprint for the
Kun-Manie nickel - copper sulphide project. The indicated scale of
the project supports the conclusions that it will be a substantial
producer, placing the Company among some of the world's larger
nickel miners. The integrated Operational Blueprint for Kun-Manie
includes the following:
-- Power for the site will be generated using diesel fuelled
generators, typical of remote Russian operations. The capital cost
for site-generated power is substantially less than that required
to construct a 360 kilometre long power line, estimated by the
utility company to range from US$800,000 to US$1,000,000 per
kilometre. Conversely, operating costs will be higher than with
power delivered through a grid. This is a substantial change from
2007, when the local utility stated that the power line would be
constructed at its expense. This is no longer the case. Power
generation alternatives such as wind, hydroelectric, etc. could
augment the power needs on site and shall be further
investigated.
-- To support the additional needs to provide power at the site, the access road design will be substantially upgraded by widening it to handle two-way traffic on a year round basis. This requires additional road maintenance equipment and is substantially higher than previous capital cost estimates related to construction of the 320 kilometre long access road.
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