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Geometric Drilling - UK Based onshore drilling contractor

Mining Week: 18 December

18 December 2009

The latest news, moves, deals, drilling, surveys and speculation from small cap miners

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In its final results for the year, African Diamonds (AFD) confirmed that the AK6 discovery in Botswana is due to be developed in 2010 with its new partner Lundin. The mine should come on stream in 2011 at 400,000 carats a year, rising to 1 million.

Labrador Iron Mines (LIM), the Canadian iron ore miner that is 50%-owned by AIM listed Anglesey Mining (AYM), completed a series of five transactions to acquire control over an additional 50 million tons of direct shipping iron ore (DSO) in the Province of Quebec.

Gold explorer Ariana Resources (AAU) said it was making solid progress towards production on its proposed joint venture with Proccea Construction on the Red Rabbit Project in western Turkey. Work is underway on a number of fronts in preparation for the planned 2010 feasibility study.

Baobab Resources (BAO) said it was planning an aggressive exploration campaign in early 2010 at its flagship Tete magnetite-ilmenite project in Mozambique.

Carlton Resources (CLN) paid £0.6 million to acquire an option over Tobon Tondo, a Malian company holding highly prospective gold exploration interests known as the Karan exploration license and the Diatissan research permit in Mali, Africa's third largest producer of gold.

Central China Goldfields (GGG) signed an exclusive option agreement over the Cikoleang Gold Property in the Banten Province, Indonesia with a local partner company PT Fino Bersaudara with a view to entering a definitive joint venture agreement within six months.

Churchill Mining (CHL) the Indonesian-focused coal miner, said that feasibility work on its 75%-owned East Kutai Coal Project had identified the potential to exploit the project's thermal coal reserves at a preferred annual production rate of 20 million tons per year.

Welsh coal mining group Energybuild (EBG) raised around £14.5 million in a 15p per share placing with investors. The company will see £10 million of new funds from the move, with the balance of the shares being used to convert old loans owed to one of its shareholders, Western Coal Corp.

Emed Mining (EMED) advised that the Junta de Andalucia had formally confirmed the permitting process, or “roadmap” to facilitate the start-up of the Rio Tinto copper mine. The roadmap foresees the start of production some time in 2011.

Frontier Mining (FML) said it had achieved substantial progress in the last seven months at its Benkala project in Kazakhstan and was now focused on ensuring that production would begin at the copper-molybdenum-gold deposit in 2011.

Demetri Manolis, the CEO of Goldplat (GDP), said the company was enjoying significant cashflow from its recovery operations in South Africa and Ghana and was now evaluating new opportunities through which it could drive the business forward.

Great Eastern Energy Corporation (GEEC), the group specialising in coal bed methane projects in India, signed a significant long term Gas Sale Agreement with SAIL ISP for the supply of up to 12.85 MMscfd of gas.

Greatland Gold (GGP), the gold group with projects in Tasmania and Western Australia, completed a diamond drill programme at Firetower and a RC drill programme at Warrentinna, and is due to receive the results in due course.

Production problems at Canadian gold miner Kirkland Lake Gold (KGI) had a big impact on second quarter 2010 figures, with production down 77% on the previous quarter to 3,912 ounces and revenues down 69% at $6.9 million. The production problems have since been fixed.

Kopane Diamond Developments (KDD) said it was no longer going to extend an exclusivity deal with an potential investor in the Liqhobong Project in Lesotho, southern Africa. Kopane said recent strong improvements in the diamond market and new expressions of interest at a corporate level from other organisations would instead be further investigated.

Nyota Minerals (NYO), the AIM listed mining group that changed its name in September from Dwyka Resources, raised £2.25 million in a share placing priced at 7p.

Red Rock Resources (RRR) tapped £120,000 from its standby equity distribution agreement with YA Global, advised by Yorkville Advisors. The subscription was priced at 1.304 pence per share. Red Rock also issued 4,365,215 shares to Kansai Mining Corporation at 1.9 pence each as the second tranche of the consideration payable for an interest in the Migori gold property.

Regency Mines (RGM) pulled another £100,000 from its standby equity distribution agreement with YA Global, advised by Yorkville Advisors. The latest subscription was priced at 1.48162 pence per share.

Serabi Mining (SRB) said it had drawn down the full £300,000 of a convertible loan from Greenwood Investments. Greenwood can elect to convert the loan into shares at an exercise price of 1.5p per share at any time on or before October 31, 2014. Serabi is using the cash to start the first stage of exploration and further evaluation of the 18 prioritised geophysical anomalies identified near to its Palito mine.

Shanta Gold (SHG) entered into a standby equity distribution agreement with YA Global in a move that will see the fund commit up to £3 million to subscribe for new shares in the company.

Sylvania Resources (SLV) raised £10.0 million in a 40p per share placing with M&G Recovery Fund, a new institutional investor. The company will use that cash to elevate its Grass Valley project to JORC compliant status; bring forward the purchase of long lead items for the Tweefontein plant and complete the acquisition of Mooinooi tailings dumps from Lonmin in order to provide additional feed for the Mooinooi plant.

Uruguay Mineral Exploration (UGY) reported that it had produced 13,580 ounces of gold for the quarter ended November 30, 2009- approximately 10% down on expectations. Separately, the company said that ongoing resource definition drilling at its Arenal Deeps project had extended mineralization at the edges of the deposit and confirmed continuity of higher grade shoots in areas that were previously poorly defined.

Namibian copper miner Weatherly International (WTI) produced an in-house five-year mine plan for the reopening of its Otjihase and Matchless underground mines. Elsewhere, Weatherly said that preliminary pit optimisation results indicated that an economically viable open cut operation could be established at its Tschudi project.

Vatukoula Gold Mines (VGM), the AIM-quoted Fijian gold producer, said earnings in the first quarter to November 30, 2009 had jumped to £1.292 million up from a loss of £1.587 million in the previous quarter. Gold sales hit 8,826 ounces, up from 6,617 ounces in the previous quarter.

Xtract Energy (XTR) raised £1.2 million in a placing of 60 million new shares at a placing price of 2 pence per share in order to fund its working capital needs.

ZincOx (ZOX) reported that its subsidiary in the USA, Zinc and Iron Recycling of Ohio, Inc., (ZIRO), had signed an agreement with a subsidiary of Severstal North America to acquire the processing equipment at its Waste Oxide Recycling Facility (WORF) based in Dearborn, near Detroit, Michigan.