UPDATE ON THE RECOMMENCEMENT OF PROCESSING OPERATIONS
June 9, 2016Back
9 June 2016
Aureus Mining Inc.
TSX : AUE
AIM : AUE
NEW LIBERTY GOLD MINE
UPDATE ON THE RECOMMENCEMENT OF PROCESSING OPERATIONS
Aureus Mining Inc. (“Aureus” or the “Company”), the TSX and AIM listed West African gold producer, is pleased to announce that it has made significant progress towards the recommencement of gold processing operations at the New Liberty Mine.
The Company highlights the following:
- The Environmental Protection Agency of Liberia (“EPA”) has granted the Company permission to discharge from its Tailings Storage Facility (“TSF”) and issued a permit for future discharges in compliance with the International Cyanide Management Code (“ICMC”) limits;
- A detailed start-up plan has been submitted to Ministry of Lands, Mines and Energy (“MLME”) for formal approval, outlining a controlled start-up of the gold processing plant;
- The Company has received a letter from the MLME stating their commitment to working with the Company to recommence operations and supporting the detailed start-up plan the Company has submitted for its review;
- Modifications to the gold processing plant and detoxification circuit are nearing completion;
- The recommencement of gold processing operations is currently targeted for mid-June 2016 following the completion of gravity circuit screen replacement works and a full mill reline;
- Mining operations have continued with a current run of mine (“ROM”) ore stockpile balance of approximately 105,694 tonnes at a grade of 4.02 g/t Au; and
- The Company is in advanced discussions to secure additional funding in the short term from a potential strategic partner.
During the temporary suspension of processing operations, the Company has been focused upon the completion of various modifications to the process plant and detoxification circuit, with the assistance of technical specialists from Maelgwyn Mineral Services Africa (“MMSA”). These modifications are nearing completion and have all been undertaken in accordance with the ICMC and various operational reviews have been carried out on site by international consultants including TSF experts Knight Piésold Consulting (UK) (“Knight Piésold”).
Prior to the recommencement of processing operations, the Company intends to complete a full reline of the New Liberty ball mill, which was previously scheduled to be undertaken at the end of June 2016. This reline involves the mill being fitted with more heavy duty liners than originally supplied and improved lifters and grates.
The Company has received a letter from the MLME stating their commitment to working together with the Company to recommence operations at New Liberty and supporting the detailed start-up plan the Company has submitted for review. Following the completion of the on-going modifications to the process plant, and subsequent sign off by both MMSA and representatives of the MLME, the Company expects the MLME to grant formal approval to commence with a controlled start-up of the gold processing plant.
The detailed start-up plan submitted by the Company includes a gradual ramp-up in operations with waste and low grade ore towards name plate capacity at ROM grade ore, and including scheduled periods of plant downtime to allow for performance testing and additional modifications to be made within the process plant. It is anticipated that this controlled start-up process will be initiated with the support of staff from MMSA, and in full cooperation with both the EPA and MLME.
A further announcement will be communicated following receipt of the MLME’s approval to commence start-up of the process plant.
The Company believes that following extensive consultation and technical studies by international experts, the plant modifications currently being undertaken and the enhanced monitoring programme and compliance regime it has initiated at New Liberty will enable it to operate in compliance with its operating licence and social commitments as well as its commitment to compliance with the ICMC.
Investigations to date have shown that cyanide discharge exceedances of ICMC compliance guidelines and the environmental laws of Liberia have been recorded on the TSF and at environmental compliance monitoring points downstream of the TSF periodically between mid-December 2015 and March 2016. Full disclosure of the historic exceedances has been made to the EPA. These exceedances can be attributed to operational issues at the plant, including complications with the oxygen plant, the detoxification circuit and on site laboratory resulting in a lack of stable operating conditions. Processing operations were suspended as previously reported by the Company on 10 May 2016.
Investigations led by international experts are ongoing with the aim of understanding the impact of these discharges on the river ecosystem and downstream water users, and defining appropriate rehabilitation actions. The Company has provided additional water wells within the village of Jikando, the closest settlement to New Liberty situated five kilometres downstream, and is ensuring there is no impact on the residents’ livelihoods while assessments to the downstream river ecosystem continue.
|Aureus Mining Inc.
David Reading / Paul Thomson
Tel: +44(0) 20 7010 7690
Bobby Morse / Anna Michniewicz
Tel: +44(0) 20 7466 5000
|Numis Securities Limited
John Prior / James Black / Paul Gillam
Tel: +44(0) 20 7260 1000
|RBC Capital Markets
Richard Horrocks-Taylor / Richard Hughes
Tel: +44(0) 20 7653 4000
About Aureus Mining Inc.
The Company’s assets include the New Liberty Gold Mine in Liberia (the “New Liberty Gold Mine,” “New Liberty” or the “mine”) which has an estimated proven and probable mineral reserve of 8.5 Mt with 924,000 ounces of gold grading 3.4 g/t and an estimated measured and indicated mineral resource of 9,796 Kt with 1,143,000 ounces of gold grading 3.63 g/t and an estimated inferred mineral resource of 5,730 Kt with 593,000 ounces of gold grading 3.2 g/t. A Definitive Feasibility Study (“DFS”) has been completed, the first gold pour has taken place and commercial production has been declared. The foregoing mineral reserve and mineral resource estimates and additional information in connection therewith are set out in the Company’s technical report dated March 25, 2015 and entitled “New Liberty Gold Project, Bea Mountain Mining Licence Southern Block, Liberia, West Africa, Definitive Project Plan.”
The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 478 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which are the focus of exploration programs during 2016. Ndablama has an indicated mineral resource of 386,000 ounces of gold grading 1.6 g/t and inferred mineral resource of 515,000 ounces of gold grading 1.7 g/t and Weaju has an inferred mineral resource of 178,000 ounces of gold grading 2.1 g/t. The Yambesei (759 km2), Archaen West (112.6 km2), Mabong (36.6 km2) and Mafa West (15.6 km2) licences will also be subject to preliminary reconnaissance geological work. The foregoing mineral resource estimates and additional information in connection therewith are set out in the Company’s technical report dated December 1, 2014 and entitled “Ndablama and Weaju Gold Projects, Bea Mountain Mining Licence, Northern Block, Technical Report on Mineral Resources” (“Ndablama and Weaju Technical Report 2014”).
The Company also has a gold exploration permit in Cameroon.
The Company’s Qualified Person is David Reading, who holds a MSc in Economic Geology from University of Waterloo, Canada and is a Fellow of the Institute of Materials, Minerals and Mining. David Reading is the President and CEO of Aureus Mining Inc. and has reviewed and approves this press release.
Forward Looking Statements
Certain information contained in this Announcement constitutes forward looking information. This information may relate to future events or the Company’s future performance. All information other than information of historical fact is forward looking information. The use of any of the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, “predict” and “potential” and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this Announcement should not be unduly relied upon. This information speaks only as of the date of this Announcement. Such forward looking information includes, among other things, statements or information relating to: plans to recommence processing operations, to conduct various environmental and social studies, to construct remediation facilities and to modify the process plant and detoxification circuit, the Company’s ability to successfully complete the foregoing, the continuation of commercial production at the New Liberty Gold Mine and the proposed plans relating thereto regarding operations, estimates relating to tonnage, grades, waste ratios, recovery rates and future gold production, expectations regarding throughput gold production, mill treatment and plant feed, expectations regarding the engagement of external contractors, as well as the other forecasts, estimates and expectations relating to the New Liberty Gold Mine included in this Announcement; the future market price of commodities; production targets; timetables; the continued listing of the common shares of the Company on the TSX and AIM.
With respect to forward looking information contained in this Announcement, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; that Aureus will be able to advance and complete its planned remediation, rehabilitation and restoration activities within expected timeframes; that there will be no significant delay or other material impact on the expected timeframes for completion of the planned remediation and restoration of the New Liberty Gold Mine and the recommencement of processing operations; that any required permits, approvals and arrangements to proceed with planned remediation and restoration and the resumption of processing operations will be obtained in a timely manner; that there will be no interruptions that will materially delay Aureus’ progress with any remediation plans; that Aureus will have access to any additional capital if required to fund such activities and other operations; , the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities; interest rates and foreign exchange rates the parameters and assumptions employed in the New Liberty Technical Report, (including but not limited to, those relating to future mining and operating costs, processing and recovery rates, net present values and internal rates of return, timing for the commencement of production, tax and royalty rates, future gold prices, metallurgical rates, operations and management, grades); the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities; the obtaining of waivers and amendments from the Company’s creditors in respect of its debt repayment obligations; the business of the Company including the political environments and legal and regulatory frameworks in and the ability of the Company to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet its demand. Assumptions used in the preparation of such information, although considered reasonable by Aureus at the time of preparation, may prove to be incorrect.
Actual results could differ materially from those anticipated in the forward looking information contained in this Announcement as a result of the risk factors, including: uncertainty regarding the outcome of any sample testing and analysis to be conducted on the area affected by the overflow from the TSF; risks relating to the timely receipt of necessary approvals and consents to proceed with the proposed remediation plan and with the recommencement of processing operations; risks relating to the timing, costs and liabilities relating to the proposed modifications and new facilities; uncertainty as to actual timing of completion of any remediation and restoration activities and the recommencement of processing operations at the New Liberty Gold Mine; risks relating to the impact of the overflow from the TSF on Aureus’ reputation; the quantum of any claims, fines or penalties that may become payable by Aureus and the risk that current sources of funds are insufficient to fund any such liabilities; risks that Aureus will be unsuccessful in defending against any legal claims or potential litigation; risk of costs arising from any unforeseen longer-term environmental consequences of the overflow from the TSF at the New Liberty Gold Mine risks normally incidental to exploration and development of mineral properties; the inability of the Company to obtain required financing, when needed and/or on acceptable terms or at all; the inability to obtain required waivers and amendments from the Company’s creditors in respect of its debt repayment obligations and consequential risks of default thereon; risks related to operating in West Africa; health risks associated with the mining workforce in West Africa; risks related to the Company’s title to its mineral properties; adverse changes in commodity prices; risks related to current global financial conditions; risks that the Company’s exploration for and development of mineral deposits may not be successful; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in Liberia, including adverse changes in applicable laws; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company’s operations; uncertainty of mineral resource and reserve estimates; the inability of the Company to delineate additional mineral resources; risks related to environmental regulations; uncertainties in the interpretation of results from drilling; uncertainties in the estimates and assumptions used, and risks in the methodologies employed, in the New Liberty Technical Report and that the completion of additional work at the New Liberty Gold Mine could result in changes to the forecasts, estimates and expectations contained in the New Liberty Technical Report; risks related to the legal systems in Liberia; risks related to the tax residency of the Company; the possibility that future exploration, development or mining results will not be consistent with expectations; inflation; changes in exchange and interest rates; risks related to the activities of artisanal miners; actions of third parties that the Company is reliant upon; lack of availability at a reasonable cost or at all, of plants, equipment or labour, including required equipment, explosives and other necessary material not being delivered in the expected time frame, or at all; the inability to attract and retain key management and personnel; political risks; the inability to enforce judgments against the Company’s directors and officers; and future unforeseen liabilities and other factors.
The forward looking information included in this Announcement is expressly qualified by this cautionary statement and is made as of the date of this Announcement. The Company does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.