Minera shares rise as offer talks revealed

Minera IRL (LON:MIRL, TSE:IRL) confirmed on Friday that it was in talks with LionGold Corp over a possible offer for the firm.

Shares saw a rally on London’s AIM market and rose over 18% to stand at 17 pence each.

In addition, LionGold (LGC) and Minera are in discussions regarding a potential placing, under which LGC would agree to subscribe for up to US$10 million of Minera shares in two tranches.

The announcement came with the caveat that there was no certainty that any offer would indeed be made.

LionGold Corp is listed in Southeast Asia and its corporate profile decribes it as the largest gold company listed there.

It has established itself in the global gold mining industry and has acquired since 2012, seven gold exploration and mining companies.

Last week, Minera announced it had received the key approval for the development of its Ollachea gold project in Peru.

The company revealed that the Peruvian Ministry of Mines and Energy (MEM) had approved the Environmental and Social Impact Assessment (ESIA) for the project.

Courtney Chamberlain, chief executive of Minera, said the ESIA report was a “major milestone toward production”. 

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Avrupa Minerals inks exploration alliance with Callinan Royalties

Avrupa Minerals (CVE:AVU) says it has signed an exploration alliance agreement with Callinan Royalties Corp (CVE:CAA) to fund exploration for new properties in Portugal as well as to advance work on its existing projects so as to attract more potential partners, bringing more value for its shareholders. 

The company, which has properties in Portugal, Kosovo and Germany that it is working to joint venture, holds a total of 16 exploration licenses in these European countries, including 10 in Portugal. It operates three joint ventures in Portugal, including the Covas partnership with Blackheath Resources (CVE:BHR), and the Alvalade joint venture with Antofagasta Minerals in the southern part of the country.    

“This agreement is a great way for Avrupa to generate new projects and advance them,” said president and CEO Paul Kuhn in a statement released late Thursday. “We are pleased to have a new partner in Callinan and look forward to working closely with their geological team.”

Under the terms of the three-year deal, Callinan will fund $150,000 of generative exploration in Spain and Portugal during the first year, and at its option, fund up to $100,000 in each of the two subsequent years. In return, Avrupa will give Callinan the option to get a 0.5% net smelter returns (NSR) royalty on any new projects acquired as a result of the work. 

If Callinan decides to fund an additional $150,000 in further exploration work on any of the new projects, the NSR royalty would bump up to 1.5%. After this, there is the possibility that the two parties would jointly fund the new projects on a 50/50 basis, with Callinan’s NSR royalty and interest remaining unchanged. 

Callinan also has the option to fund additional exploration on Avrupa’s existing properties, thereby earning a 1.5% NSR royalty in exchange for the $150,000 in financing.

According to the statement, Avrupa can also propose additional new prospect areas outside of Portugal, with Callinan being given the option to fund the exploration in those areas in return for the same royalty structure.

Last week, Avrupa said it closed a $600,000 financing, with the funds to be used to advance the company’s project generation business model in Europe. The financing that closed late last Thursday, which was first reported in August and increased by $0.1 million in early September, involved both strategic investors, as well as management.                

Avrupa also recently announced that it had started phase 2 diamond drilling at its Covas tungsten joint venture in northwest Portugal, which is operated by the Canadian company and fully funded by partner Blackheath. The new drilling program, which will include up to 2,000 metres of drilling at up to 19 separate locations, will aim to expand known deposits and mineralization around the Covas property. 

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Mawson Resources climbs on high grade gold core sampling results from Rompas prospect

Mawson Resources (TSE:MAW) shares jumped on Thursday on core sampling results from the Palokas gold prospect at its Rompas property in Finland. 

The results represent the first core sampling from the prospect, which is located within the Rajapalot area, 7 kilometres east of the company’s drilling in the vein style mineralization at Rompas. Highlights include an intersection of 9 metres at 10.2 grams per tonne (g/t) gold from surface, including 3 metres at 27.5 g/t gold from hole PRAJ0003. 

An airborne geophyscial survey at Rajapalot indicates that mineralization discovered in this hole is coincident with a conductor that extends for more than 500 metres, according to a statement released Thursday. 

Shares of Mawson rose more than 22 per cent in early deals, to 43 cents. 

“This is the first core test of the disseminated style of gold mineralization at the Rompas project,” said president and CEO Michael Hudson in the release. 

“This result has validated our prior limited surface sampling, with hole PRAJ0003 producing the widest and most consistent gold grades at Rompas to date.”

The company said Thursday that near-surface core sampling will continue at Palokas, with further results still pending.  Six core sample holes have been completed so far at the prospect, over a 35-metre strike, with a further 18 core holes planned. 

The stellar hole announced today was slightly offset from a previous sampled rock chip panel, which averaged 13.4 g/t gold and 226 parts per million (ppm) uranium over 9 metres.               

The company says Palokas is located in an EU-defined biodiversity Natura 2000 area, where at this stage of permitting, it is entitled to 100% of the mineral rights, with certain limitations on exploration methods that can be completed, including no larger scale drilling or mechanical trenching. 

Mawson has applied for a modification of this decision as it seeks permission to conduct larger scale drilling in these areas, with a decision not expected until the first quarter of next year. An environmental study has been completed that defined the impact that Mawson’s exploration work will have on the “biodiversity values”, the company said, with the key consultant on the study being one of the biologists who mapped the Natura 2000 area in the late 1990s. 

Separately, the company said two diamond drill holes have been completed at a high angle to previous drill orientations at South Rompas, while diamond drilling is also in progress at the Kaita prospect, with results pending. 

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Sunridge Gold boosts size of financing to $4 mln, hires new CFO

Sunridge Gold Corp. (CVE:SGC) (OTCQX:SGCNF) has boosted the size of its brokered private placement financing to $4 million from $3 million previously, with the proceeds to go towards the further development of its Asmara project in Eritrea. 

The company, which is working to move its project to the production stage, will issue up to 21.05 million units at a price of 19 cents apiece, with Sunridge also granting the agent, Tempest Capital, an option to sell up to an additional 15 per cent of the number of units, or a maximum of 3.16 million units. 

Each unit will be made up of one common share and one share purchase warrant, with every warrant good for one additional share at a price of 35 cents each until October 18, 2017. 

The company also said it will move to settle outstanding debts with “arm’s length parties” in the amount of $830,128 by issuing units concurrent with the closing of the  private placement. It will make an application to the TSX Venture Exchange to list the shares and warrants issued under the placement. 

Separately, the company announced that its CFO, Doris Meyer, has decided to retire from her role effective at the start of this month, with Sunridge appointing Dan O’Brien as her successor. O’Brien was previously a senior manager at a Canadian accounting firm, where he specialized in the audit of public companies in the mining and resource sector. 

Sunridge is moving ever closer to production with the Vancouver-based exploration and development company very much focused on its flagship copper-zinc-gold-silver project in the eastern-African nation of Eritrea, making notable progress.

The four advanced deposits that make up the Asmara project (Emba Derho, Adi Nefas, Gupo Gold and Debarwa) have already been the subject of a feasibility study earlier in the year that showed that mining at the project and processing of the ore near the large Emba Derho deposit is economically robust.

In recent days, the company has undertaken a social and environmental impact assessment due for completion this month, in order to make application to the government for a mining license. In addition to these efforts, negotiations are underway with the Eritrean National Mining Corporation (ENAMCO) to determine the price the government organization will pay to purchase 30 per cent of the project from Sunridge.

Discussions with potential debt financing lenders have also begun, as has an independent due diligence review — the step in advance of signing the financing agreement, when potential investors examine the project in detail before deciding to fund work on the property. The review, which is being conducted by Micon International Limited, commenced in June and is due for completion before the end of the calendar year.

The project, which has a mine life of more than 15 years, is pegged to produce a total of more than 841 million pounds of copper and 1.87 billion pounds of zinc, as well as gold and silver. Average operating costs over the life of the mine are estimated at just under $30 a tonne.

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Tarsis turns up high-grade gold values on Yago site

High-grade gold values were confirmed in the exploration and assay results from Tarsis Resources Ltd’s (CVE:TCC) Yago gold-silver property in Mexico, the Vancouver-based explorer announced Thursday.

The company conducted a focussed orientation at two historical locations, La Tejona and La Sarda, within the central and northern parts of the property located in Nayarit State, Mexico. At both sites, previously reported vein zones were re-exposed and channel samples were collected using a diamond blade rock saw, Tarsis said. 

La Tejona, the location central to the property, yielded 13.65 grams per tonne (g/t) of gold and 57.4 g/t silver across 0.37 metres, while La Sarda, the more northerly of the two locations, returned 10.40 g/t gold and 92.5 g/t silver across 0.52 metres. 

“We are very encouraged with the results of our first work program at Yago,” said president and CEO Marc Blythe in a company statement released with the results, “particularly the potential widths of the vein system interpreted at La Tejona, in excess of 15 meters, coupled with the presence of multi-gram gold values at numerous locations on the property.”

Significant assay results saw channel samples from the La Tejona location include one trench, the 2.88 metre wide LT-13-01, that returned results of 3.10 g/t of gold and 35.6 g/t of silver including one area 85 centimetres in width that showed 8.49 g/t of gold and 29.9 g/t of silver.

Meanwhile at the La Sarda location, where small-scale mining took place between 1998 and 2007, at least four sub-parallel northeast trending vein structures were identified. The focus of Tarsis’ recent campaign was the La Esperanza vein, with the intent of following up a number of recent chip samples taken along strike from the site of historical gold-silver production.

Three historical sample sites were located along a 600 m section of the vein, which is known to extend over 1,200 metres. According to the statement, significant assay results included the 3.55 metre wide trench, Esp C, which turned up 2.42 g/t of gold and 16.7 g/t of silver, including 4.82 g/t of gold and 32.9 g/t of silver in one 1.25 metre portion.

The project, 50 kilometres from the state capital, Tepic, which is close to paved highways and electrical transmission lines, spans 15,000 hectares.

Tarsis, which works to the model of project generation and early stage exploration, works to find and develop economic base and precious metal deposits and then vends or options them to partners for development. The company has projects in Nevada and the Yukon in Canada in addition to the Mexican property.

Shares in Tarsis closed up on the TSX Venture Exchange at 6 cents on Wednesday.

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Largo Resources says Maracas project development continues on track

Largo Resources (CVE:LGO) provided investors Thursday with an update for its Maracás vanadium project in Brazil, saying the civil construction contractor has already begun the demobilization process – an important construction milestone. 

Electrical mechancial erection at the project, which includes the installation of equipment and structures, continues on plan, said the company in its release, with commissioning on track for the first quarter of next year. 

At the mine, pre-stripping of the Gulçari “A” open pit is proceeding as planned, with the main pit access ramp well underway. 

Commissioning of the beneficiation plant and the production of 5,000 tonnes of concentrate is expected to start in November, and pre-commissioning of the crushing plant is currently underway, with full commissioning expected to start before the end of October. 

All but minor civil work remains to be completed by the civil contractor, said Largo, with non-magnetic tailings and iron by-product dams now complete. 

The Canadian strategic mineral company’s primary focus is to continue to advance its flagship Maracas vanadium project with the company targeting a production start date in first quarter of next year. The project, which is fully funded, permitted and in construction, is slated to be the world’s “premier producer of vanadium”, according to Largo, due to its high grade and low operating costs.

The 27,000-hectare property is located 813 kilometres northeast of Brasilia, the capital of Brazil, and 250 kilometres southwest of Salvador, the capital of Bahia State.

Earlier this week, the Toronto-based company received yet another accolade for its Maracas project, getting Latin Finance magazine’s best mining finance award for the funding of the asset last year, with the magazine citing “the novel nature of the non-recourse financing structure”, as well as difficult market conditions and unique aspects of the project and its chief commodity. The total R$556 million transaction, which was led and financed entirely by Brazilian banks, was completed in June of 2012. The Brazilian property is the first Greenfield mining project ever to be fully funded by Brazilian banks, according to Largo. 

The news, released in a statement late Monday, follows another award earlier this year, when Largo was named the recipient of Project Finance magazine’s Latin American Mining and Metals Deal of the Year, 2012.

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African Queen Mines to raise up to $0.5 mln

African Queen Mines (CVE:AQ) says it will raise up to C$0.5 million through a non-brokered private placement offering, to be used for exploration at its properties, as well as for working capital. 

The Canadian junior explorer will offer for sale up to 10.0 million units at a price of 5 Canadian cents apiece. The company can also increase the size of the offering by up to 20 per cent, to a maximum of 12.0 million units. 

Each unit will be made up of one common share and one half of a share purchase warrant, with every warrant allowing the holder to buy an additional share at a price of 7.5 Canadian cents for a period of two years. 

The deal still needs the approval of the TSX Venture Exchange to close. 

Earlier this year, African Queen started its 2013 field program at the Ugunja gold project in Kenya’s Lakeland district. The field work underway is a continuation of the phase 1b exploration program started last year, and includes regional mapping, soil and rock sampling, trenching and ground geophysics. At the time, chief executive Irwin Olian said the company was planning to accelerate activities at Ugunja to find the optimal drill targets in order to start a core drilling program later this year. 

It also in January expanded and renewed its exploration license on its Noyem-Nyanfoman gold project in Ghana’s Ashanti Belt for a period of two years. The project is held under a joint venture between African Queen and Akan Exploration, and is operated by African Queen, which controls a 60 per cent interest. 

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Rambler Metals looks to Little Deer to further Newfoundland ambitions

Rambler Metals and Mining’s (LON:RMM, CVE:RAB) planned acquisition of the Little Deer project is a timely reminder of the copper and gold miner’s progress in building a leading position in Newfoundland during difficult markets.

Where other juniors are having to hive off assets, if not going to the wall completely, Rambler with cash-flow from operations is expanding its portfolio and getting a new and highly exciting project.

Little Deer, of which Rambler has agreed to buy a 50% participating interest for C$550,000, consists of a copper deposit and associated dormant Whalesback mine.

It lies only 30km from Rambler’s deep water port facility, less than 150km from its processing plant and the company 

Rambler hopes it can repeat the success here that it has had at its now producing flagship Ming mine (pictured), which it took on five years ago.

Chief executive George Ogilvie recently told Proactive how the purchase ticked all the “right boxes” regarding the firm’s strategy of finding a further local project to supplement Ming’s copper output.

He cites the region’s favourable tax system, good infrastructure and stable socio-economic features, among the reasons which make Little Deer so attractive.

He also highlights the deals compelling finances.

“If you consider the indicated resources alone (of Little Deer) of 129 million tonnes of copper and an acquisition cost of C$550,000, that equates to about one cent per pound of copper in the ground for a 50% stake,” says the CEO.

“Of course there are risks involved. No-one can categorically say at this stage that these mines will be profitable and resurrected but certainly based on Rambler’s track record, I’d have to say it has a better chance than most, particularly when you consider what we bring to the table.”

Mining analyst Asa Bridle at Cantor Fitzgerald recently echoed this sentiment, highlighting that the transaction is the largest made by the firm in the copper space to date.

Based on an economic assessment two years ago, Little Deer could produce 12,000 tonnes a year – which is a whole 60% more than the maximum figure the broker forecasts Ming could produce each year.

Bridle notes that assuming Rambler uses its existing equipment, plant and shipping facilities he would expect substantial savings to be possible on the original US$110mln capex estimate for the project which included around C$60m for a new mill, though “there would still need to be some spending to expand the facilities to treat these additional volumes”.

The deal begs the question of course, why did Cornerstone Capital want to sell the 50% stake? 

Ogilvie’s answer echoes a theme being repeated up and down the mining sector, namely that it saw it as “non-core” and needed to monetise it to concentrate on its main asset.

“As these difficult markets continue to persist, I think we’ll see more junior explorers undertake this strategy (of disposals..),” he says.

“In my opinion this creates more opportunities for companies like Rambler, who have producing assets, which are free cash-flowing.”

And in these constrained times, which Ogilvie sees continuing in the short to medium term, he says Rambler will continue to be “opportunistic” and snap up further deals if they represent “good value for money”.

Cash is thus currently not a problem for the firm, and with better-than-expected production in the three months to July, it has been able to make serious inroads into paying off its Sprott debt – paying back C$500,000 leaving C$5.4mln outstanding.

Ogilvie said a main priority for Rambler was to pay this off and it is hoping to have done this by the end of the year.

Beyond that, Ogilvie added that Rambler’s mix of free cash flow from its operations mean the board would certainly need to consider how best to deploy its capital whether it be paying a dividend to return rewards to shareholders or look at share buy-back schemes if it believes the shares were still undervalued.

And momentum is certainly being maintained at Ming. The firm recently made its fourth concentrate shipment from Ming of around 7,800 wet metric tonnes, meaning it has shipped a total of around 26,000 WMT since first production in May last year.

Recoveries of copper through the Nugget Pond milling facility averaged 95% over the past two months, exceeding expected levels.

The company is forecasting copper production for fiscal 2014 of between 5,700 and 6,840 tonnes with  7,000 to 9,000 ounces of gold and 32,000 to 39,000 ounces of silver.

Analyst Bridle, which repeated his ‘buy’ stance on the stock notes: “With monthly production rates since August well in excess of 2kt concentrate, we believe RMM looks to be on track to meet its recently published guidance for FY14, its first full year of commercial production.” 

So at a time where many commentators are positive on the longer term copper price, despite temporary setbacks in the market, Rambler is well-positioned to make the best of its Newfoundland assets.

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Century Iron Mines moves to simplify Attikamagen ownership structure by acquiring Champion’s stake

Century Iron Mines (TSE:FER) has agreed to acquireChampion Iron Mines‘ (TSE:CHM) remaining interest in the Attikamagen Lake project, giving it and its joint venture partner WISCO International – one of China’s leading steelmakers – a 100 per cent stake in the asset, and simplifying the structure of the property. 

After the transaction is complete, the project, near Schefferville, Quebec, will be owned completely by Labec Century, a joint venture between WISCO and Century, in which Century holds a 60 per cent stake and the Chinese company holds the remainder. 

Under the terms of the deal, Century Iron will issue 2.0 million common shares and 1.0 million warrants, with different stipulated prices based on the date of exercise. In addition, Champion, which previously held a 40 per cent interest in the property, will get a 2% net smelter return royalty on iron and minerals produced from the project. 

Century Iron president and CEO Sandy Chim in a release Thursday said he is quite pleased to have concluded the deal with Champion to own 100 per cent of Attikamagen Lake. 

“This is a major advancement of the project following the further $20 million investment in the project by WISCO announced last week. WISCO has invested a total of $40 million to date to complete its earn-in of its full 40% interest,” he said, adding that the transaction is accretive to shareholders and to the company’s strategic partners. 

“Now the project can be developed more effectively to fruition on a simplified 60/40 basis between Century and WISCO.”

The deal, which has been approved by Century’s board, still needs approval from the Toronto Stock Exchange. 

“Over the course of the last few years, we have made substantial investments in exploring and developing the project with excellent results,” Chim said, referring mostly to the Joyce Lake direct shipping ore (DSO) deposit – the most advanced part of the project, where a preliminary economic assessment was completed in April, and is now moving toward the feasibility study stage. 

The preliminary economics showed a pre-tax net present value of $94.5 million at an 8 percent discount rate at Joyce Lake. The internal rate of return was pegged at 35 percent pre-tax, with initial project capex estimated at $96.6 million including contingency, and a projected payback period of just less than three years from production start-up. 

The joint venture is also carrying out a fall drilling program at Joyce Lake and expects to expand and upgrade the resource base used in the preliminary study, with the feasibility report due out next year.        

Direct shipping ore refers to iron ore that can be shipped directly to a steel furnace, with these mines typically rarer than magnetite-bearing banded iron formations, but considerably cheaper to mine and process as they require less beneficiation due to the higher iron content. 

Century Iron, which is aiming to become a major iron ore producer, is one of the largest iron ore companies in Canada, in terms of number of claims by area. It has 6,493 claims and titles, covering some 198,779 hectares in the provinces of Québec and Newfoundland & Labrador. It has interests in four iron ore projects, none of which yet generate revenue.

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Belvedere Resources issues positive PEA for Kopsa

Belvedere Resources (CVE:BEL) has released the results of a positive preliminary economic assessment (PEA) on its wholly-owned Kopsa gold-copper project in Finland.

The PEA’s base case model outlines a pre-tax and pre-finance net present value of US$38.6mln at a discount rate of 8%, with an internal rate of return of 47.6%.

The PEA assumes a gold price of US$1,200 an ounce, a copper price of US$6,000 per tonne and a silver price of US$20 per ounce.

The life of mine (LoM) has been set at nine years with a peak production rate of 1.2mln tonnes per annum. LoM capital costs have been set at US$48.3mln and LoM operation costs at US$700 per ounce of gold equivalent.

The annual average production is seen weighing in at 27,000 ounces of gold and 1,050 tonnes of copper at an average operating cost of US$645 per troy ounce gold equivalent over the first six years.

The LoM production is envisaged to be 196,000 ounces of gold and 8,200 tonnes of copper at a mined grade of 0.91 grams per tonne gold and 0.15% copper.

It is currently envisaged that Kopsa will be mined by conventional open pit methods using an excavator-truck configuration with the output processed at Belvedere’s Hitura facilities, located some 19 kilometres via sealed road from the deposit.

The project has an extremely low life of mine stripping ratio of 0.63 tonnes of waste to one tonne of run of mine material, Belvedere said.

The Hitura mill until recently processed nickel sulphide ore at a nominal annual throughput rate of 600,000 tonnes per annum. Belvedere suspended nickel production from the Hitura mine in Finland in June due to the slump in the price of the metal.

In order to treat Kopsa ore, the flotation circuit would be configured to produce two sulphide concentrates: a marketable copper sulphide concentrate, containing some gold and silver, and a bulk sulphide concentrate. The bulk sulphide concentrate would be cyanide leached for the recovery of gold and silver followed by a conventional carbon-in-pulp (CIP) / carbon-in-leach (CIL) recovery, producing a smelted gold/silver doré onsite, Belvedere revealed.

More to follow …

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