Mining Roundup

DiamondCorp’s (LON:DCP) shares soared after mining resumed at the Lace diamond mine and also announced that it has put itself up for sale.

Mining resumed at Lace after the Section 54 underground shutdown instruction issued last week by the South African Department of Mineral Resources was lifted.

DiamondCorp says the financial impact of the four days of mining lost as a result of the shutdown instruction has been minimised by a rescheduling of programme maintenance and the fact that the mine was ahead of its planned tonnage for the month at the time of the shutdown.

On 14 October, DiamondCorp announced that the company was in accelerated discussions with certain of the company’s shareholders and other third parties to address its immediate funding requirements in order to continue trading as a going concern.

It says these discussions are at an advanced stage and, while no assurances can be given as to successful resolution to these discussions, the company anticipates updating shareholders in the near term.

Following that announcement, and in response to initial expressions of interest from potential acquirers who are credible participants in the company’s sector, the board is of the view that the company should, in parallel to its discussions to secure additional funding, conduct a wider strategic review to explore additional opportunities including a corporate transaction such as a merger with or offer for the group by a third party or a sale of the group’s businesses.

The Board therefore intends to pursue any such possible alternatives to ensure the best outcome for its shareholders. It says the commencement of a ‘formal sale process’ in accordance with The City Code on Takeovers and Mergers provides the most appropriate framework under which these considerations can be made.

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Altona (LON:ANR) says its joint venture, the Arckaringa Coal Chemical Joint Venture Company Pty Ltd, has submitted an application for a petroleum exploration licence for an area overlapping that covered by PEL Application 604, which was lodged by Sapex Limited, a 100% subsidiary of Linc Energy Ltd, which is now in administration.

Altona says the PEL application follows talks with the South Australian government, which remains supportive of the company’s proposed investment in the Arckaringa Basin (in South Australia).

The directors cannot provide any assurances regarding the likely outcome of the PEL application at this time. However, the board remains confident that, along with its joint venture partners, Sino Aus Energy Group Ltd and Wintask Group Ltd, it will be successful in its endeavour to commence an Underground Coal Gasification test drilling programme.

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Shanta Gold’s (LON:SHG) Q3 has been another solid quarter for the company, setting it up to deliver at the top-end of production guidance for the year and once again improving its position on costs with a further reduction in target AISC to US$690 – 740 /oz, from US$730 – 780 /oz.

“On our projects, the underground development progressed well during the quarter and remains on schedule for first ore production in Q2 2017,” said CEO Toby Bradbury in a statement.

“We are also now actively working on the Ilunga reserve evaluation which we expect to add significant life to New Luika with its additional high grade resources.

“Outside of New Luika, our advanced stage Singida project delivered exciting drilling results in the quarter and is progressing well towards commissioning the pilot plant in Q2 2017.

“On our financial performance, it is very satisfying to see our debt reducing whilst we also fund such a significant capital program. This is reflective of the strong cash generative capacity of our business.”


– Quarterly gold production of 20,580 ounces (“oz”) (Q2 2016: 23,896 oz);

– Quarterly gold sales of 23,426 oz at an average price of US$1,301 per oz (“/oz”), compared to average spot price of US$1,335 /oz (Q2 2016: 26,134 oz at an average price of US$1,246 /oz);

– Cash costs for Q3 of US$387 /oz (Q2 2016: US$429 /oz) and All in Sustaining Cost (“AISC”) of US$621 /oz (Q2 2016: US$664 /oz); and

– No lost time injuries for the Quarter.


– Annual production guidance maintained for 2016 of 82,000 – 87,000 oz;

– Lowered AISC guidance to US$690 – 740 /oz, from US$730 – 780 /oz; and

– A revised Mine Plan is being generated to incorporate the Elizabeth Hill Reserve and the recently upgraded Ilunga Resource which will extend mine life and is targeted for completion in Q1 2017.

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Botswana Diamonds (LON:BOD) says drilling has started on kimberlite pipe AK 22 on Licence PL 260 in the Orapa area of Botswana. A further announcement will be made as soon as practicable regarding the commencement of drilling on licence PL 135 in the Gope region.

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KEFI Minerals (LON:KEFI) has issued an update for its operations in Ethiopia and Saudi Arabia.


– Raised £3.8 million (US$5 million) primarily for project finance for the scheduled development activities of the Tulu Kapi Gold Project, notably resettlement of the Tulu Kapi community and project finance syndication closure costs.

– Confirmed entitlement to ETB72 million (US$3.5 million) VAT refund from the Ethiopian tax authorities.

– The Board of KEFI is considering a number of financing proposals for the development of Tulu Kapi.

– Strengthened the Board with the appointment of Mr Mark Wellesley-Wood, an experienced African mining operator, as Non-Executive Director.

– RFC Ambrian appointed as joint broker.

Tulu Kapi gold project, Ethiopia which is wholly-owned by KEFI with the government entitled to 5% free carried interest:

– Community resettlement, livelihood restoration and community development programmes progressed and remain ongoing.

– Tulu Kapi project contract drafting advanced with Ausdrill for mining and Lycopodium for plant.

– Progressed drafting of shareholders’ agreement with the Government of Ethiopia.

– Development Bank of Ethiopia completed its evaluation process and the National Bank of Ethiopia (the central bank) approved the proposed maximum senior debt-gearing.

– Updated the Project timetable with the Government, project contractors and potential finance syndicate and revised the date for start-up of production to mid-2018.

– Received formal Front End Engineering and Design proposal for US$68 million from Lycopodium under its proposed fixed price Engineering Procurement and Design contract. This capital item, which is the largest single component of total Tulu Kapi capital expenditure, has increased 4% since the tender twelve months ago, mainly due to currency movements.

– Reviewed other capital estimates with contractors and financial advisers. After also adding contingencies and provisions for non-Tulu Kapi costs, the estimated funding requirement has been increased to c. US$150-160 million, which is fully covered by the financing proposals being considered and remains significantly less than the original c. US$289 million Tulu Kapi capital expenditure estimates of the previous owner of the Project.

Gold & Minerals Ltd Joint Venture, Saudi Arabia (40%-owned by the Company with KEFI as operator): Encouraging signs from Government

– New Energy, Industry and Mineral Resources Ministry created, to be headed by Khalid al-Falih, Chairman of state oil company Saudi Aramco.

– Ministry will handle oil and gas extraction, power generation and distribution, mining and industrial development.

– KEFI and its partner ARTAR, through its G&M joint venture, regard this as a positive sign and expect new mining policy to be issued before year-end.

Jibal Qutman

– KEFI’s plans for developing a heap leach gold project at the Jibal Qutman development await the outcomes of the Government policy review.


– Re-commenced fieldwork, focusing on depth-measurement of large buried targets as a prelude to drilling.

Portfolio of licence applications

– Upgraded and expanded its portfolio of licence applications to reinforce foundations for longer term growth opportunities.

At 4:14pm:

(LON:ANR) Altona Energy PLC share price was +0.1p at 0.48p

(LON:BEM) Beowulf Mining PLC share price was +0.01p at 5.63p

(LON:BKY) Berkeley Energia Ltd share price was -2.25p at 49p

(LON:BOD) Botswana Diamonds PLC share price was -0.18p at 1.43p

(LON:CEY) Centamin PLC share price was +3p at 147.2p

(LON:CHL) Churchill Mining PLC share price was +1p at 30p

(LON:CZA) Coal of Africa Ltd share price was +0.01p at 2.88p

(LON:DCP) Diamondcorp PLC share price was +1.1p at 3.15p

(LON:FDI) Firestone Diamonds PLC share price was -0.5p at 55.5p

(LON:FRES) Fresnillo PLC share price was +27p at 1635p

(LON:GEMD) Gem Diamonds Ltd share price was -2.37p at 113.13p

(LON:HOC) Hochschild Mining PLC share price was +9.05p at 265.05p

(LON:KEFI) KEFI Minerals PLC share price was -0.08p at 0.4p

(LON:KMR) Kenmare Resources PLC share price was -2.5p at 308.5p

(LON:SHG) Shanta Gold Ltd share price was +0.5p at 11.38p

(LON:VED) Vedanta Resources PLC share price was +12.25p at 649.25p

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