SmallCapNews | Mining Week: 6 March

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Mining Week: 6 March

06 March 2009

This week Albidon (ALD) reported that its Zambian subsidiary had received notice of default from the senior lenders to the Munali Nickel Project. The default has arisen because the project has been placed on care and maintenance, largely because of the currently depressed world prices for nickel. Earlier in the week Albidon received a conditional financing proposal from its major shareholder, Jinchuan Group, which it said it was now pursuing instead of an earlier proposal by Pacific Road Resources Funds.

Ariana Resources (AAU), the gold explorer working in Turkey, has completed an agreement Eti Gms AS to process ore from the its Kiziltepe deposit on a trial basis. Dr Kerim Sener, Ariana’s MD, said: “This event marks the dawn of a new era for Ariana Resources. We have successfully made the transition from explorer to a committed developer of gold resources in Turkey.”

Cambrian Mining (CBM) announced that it was suspending production of one of the underground mining units at its Maple Coal metallurgical coal mine in West Virginia. The decision is a direct result of the current global coking coal market conditions. As a consequence, the company's annualised metallurgical coal production will be reduced by approximately 300,000 tons.

Central Rand Gold (CRG) announced the completion of the portal excavation and commencement of the decline development on its Slot 8 decline on CMR in Johannesburg, South Africa.

Churchill Mining (CHL), the Indonesia focused mining company with a JORC resource of 1.4 billion tonnes of thermal coal at its East Kutai Coal Project (EKCP), is still in talks with potential financial backers. In an update on operations at the project, Churchill said three separate surveys were currently underway looking at how coal could be transported to the local port. It is thought that the final haulage methods will be tailored to fit the needs of any investor – although the company noted that a deal is still yet to be done.

Cluff Gold (CLF) raised £8.1m in a placing of 20,285,000 new shares at a price of 40p per share. The placing was conducted by BMO Capital Markets, Thomas Weisel Partners and Smith's Corporate Advisory as placing agents to the Company. After completion, the funds will be used to progress an accelerated drilling programme on the company’s projects in Sierra Leone and Burkina Faso.

Discovery Metals (DME) announced the assay results of the most recent thirty five infill diamond drill holes at the Plutus Prospect of its 100%-owned Boseto Copper Project in north-west Botswana. The assays reinforced the continuity and grades of copper/silver mineralisation.

EMED Mining (EMED) unveiled the terms of a proposed $8.5m convertible secured loan facility that will, if approved, provide working capital for the company’s Detva Gold project in Slovakia and the Rio Tinto Mine in Spain. EMED has agreed the deal with existing shareholders Resource Capital Fund IV L.P. and RMB Australia Holdings Ltd.

Australian mining group Gippsland (GIP) is thought to be close to appointing a replacement nominated advisor in place of Seymour Pierce, which resigned last month. The new appointment, which is likely to include at least some of Gippsland’s broker work, is expected to include and be conditional on a new working capital fund raising exercise. The role is also likely to encompass the job of financial advisor for the raising of Gippsland's equity contribution to the Abu Dabbab tantalum-tin project scheduled for later this year.

Mariana Resources (MARL) has now earned a 70% interest in the Sierra Blanca gold-silver project in Santa Cruz, Argentina, and the nearby Canadon Largo concessions located in the centre of the Deseado Massif, in a joint venture with IAMGOLD Corporation (30%). Following independent analysis, the company said the Tongoril Gold Project, 100km NE from Sierra Blanca, was now a high priority target.

Polo Resources (PRL) acquired a total of £4.7m 8.5% unsecured convertible loan notes 2010 issued by Caledon Resources (CDN) and funded the move by issuing new shares.

Solomon Gold (SOLG) has signed a definitive venture agreement with Newmont Ventures, a subsidiary of US gold mining giant Newmont Mining Corp, over Solomon Gold's copper gold exploration projects on the island of Guadalcanal in the Solomon Islands.

West African Diamonds (WAD), the AIM listed diamonds and precious metals group, said it was close to commissioning its Bomboko mine in Guinea. Engineering work is believed to be finished at the alluvial mine, which is located near the Aredor diamond mine. Pre-production testing is set to begin towards the end of March followed by production in April.