SmallCapNews | Mining Week: 9 May 2008

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Mining Week: 9 May 2008

Friday, May 09, 2008

This was a big week for Oxus Gold (OXS) which for the first time in several years found itself not involved in any litigation after its only outstanding legal dispute was settled. The latest deal saw Oxus accept a cash settlement ahead of arbitration with the Kyrgyz Republic. Oxus walked away with shares worth US$73m in KazakhGold Group Ltd and retained its rights to the potential deferred consideration of up to $80m.

John Park, the chairman of African Eagle Resources (AFE), vented his frustration over the company’s disappointing share price performance during the last year. But announcing full year figures, Park also claimed that the cash-rich company was “well-placed” to take advantage of acquisition and joint venture opportunities that were likely to arise in a cash-strapped exploration sector over the next year or so. The company posted a loss for the year of £1.1m, slightly up on last year’s loss of £1.3m.

Shares in Cambrian Mining (CBM) soared to a 12 month high of 193.75 pence this week after the company completed the transfer of Falls Mountain Coal Inc. to Western Canadian Coal Corp (WCCC). The deal saw Cambrian book a pre-tax gain of £55m.

Rambler Metals and Mining (RMM) announced new drilling results from its ongoing Lower Footwall Zone delineation programme. It said the latest holes on the 1400, 1500 and 1700 levels had returned some of the best mineralization from the underground programme to date.

Medusa Mining (MML), the Australian gold mine operator working in the Philippines, advised that on-going diamond drilling at the Co-O Gold Mine had encountered an exceptional intersection of 33.50 metres at 18.07g/t gold including a massive grey quartz vein assaying 15.9 metres at 34.02 g/t gold. More accurate test results on the area are expected during late May to early June.

EMED Mining (EMED) raised £10m before expenses in a share placing with new and existing shareholders. The new cash will fund the final review phase of the Proyecto de Rio Tinto project in Andalucia, Spain in relation to the potential exercise of an option over the acquisition of a 100% interest in the Rio Tinto Mine. It will also pay for exploration work in Slovakia, Georgia and Cyprus.

Announcing full year results, Carnegie Minerals (CME) chairman Timothy Jones said the mineral sands resource company had made “continued good progress” in 2007. However, a fall-out with the Gambian government looks set to force it into other areas of “greater stability”, he said.

AIM Resources (AIMR) provided an update for drilling at the Mumbwa Joint Venture Project in Zambia where it said a 15-hole drilling programme had started. Currently there are two drill rigs on site working double shifts, with a proposal to introduce a third rig.

Ormonde Mining (ORM) reported that its drilling programme had now shown that a substantial, wide, tungsten zone, containing several high grade intervals, existed below the historic open-pit at its Barruecopardo Tungsten Project in Salamanca, Spain. Ormonde said the zone had the potential to add significant scale to the project's existing resource base.

DiamondTech (DTEC) said it was on schedule to meet its production plan to have ten laser recovery units (LRUs) operating on site and that the large-scale up-front plant was in line to be commissioned and ready for production at its Grasfontein site in South Africa by the end of April 2008.

In a move to boost its gold mining activities across Africa, Central African Gold (CFM) appointed several new non-executive directors including new chairman, Roy Lander.

Kiwara (KIW) the Zambian based miner, reported that iron ore, historically identified in the Kalumbila area of its projects in the west of the country, now forms part of its joint venture agreement with LM Engineering Ltd. Kiwara will pay LM Engineering US$100,000 to add iron ore to the joint venture, which currently includes copper, nickel, cobalt, uranium and platinum group metals (PGMs).

An agreement between Sunrise Diamonds (SDS) and private UK diamond explorer, Mantle Diamonds Ltd, will see Sunrise pick up a 20% free-carried interest in two kimberlite targets located close to the Lahtojoki kimberlite pipe in the Kaavi region of central Finland.

Drilling has kicked off on the eastern sector of the Sindo property in Mali belonging to Medoro Resources (MRL). A first drilling phase is aimed at checking at depth the gold occurrences contained within two highly anomalous areas in the vicinity of extensive artisanal workings.

There was excitement at Zambezi Resources (ZRL) after the company discovered a potentially significant VTEM anomaly at the 100% owned Kangaluwi Copper Project in southern Zambia. Zambezi is currently conducting a major regional VTEM survey at Kangaluwi.

Patagonia Gold (PGD) has entered into a Letter of Intent with Fomento Minero de Santa Cruz Sociedad del Estado (Fomicruz SE), a mining company owned by the pro-mining government of Santa Cruz Province, Argentina. The LOI sets out the key terms and conditions of a strategic partnership between the two parties, including the gold and silver projects of Lomada de Leiva, Cap Oeste and La Manchuria Main Zone, together with properties currently owned by Fomicruz SE.

African Energy Resources (AFR), the joint venture partner of Albidon (ALD), has completed the pre-feasibility study on the Chirundu Uranium JV Project. Results from the study showed that commercially viable mining of uranium from the Chirundu Project is possible under the projected uranium price, capital cost and operating cost scenarios used by AFR.