Mining Roundup

Antofagasta (LON:ANTO) reports a strong third quarter, with copper production up 8.7% versus the previous three months and Antucoya reaching production capacity in August.

Group copper production for the year to date of 503,900 tonnes was 9.4% higher than in the same period last year, primarily due to new production from Zald�var and Antucoya, offset by the closure of Michilla at the end of 2015

Gold production was 70,300 ounces in the quarter, a 33.1% increase on Q2 2016 largely due to higher gold grades at Centinela

Molybdenum production at Los Pelambres was 1,900 tonnes in Q3 2016, compared to 1,600 tonnes in Q2 2016 with higher grades at Los Pelambres

Chief executive Ivan Arriagada said: “Performance is expected to continue to improve during the final quarter of the year, with full year 2016 copper production expected to be close to the lower end of the original guidance range of 710,000 to 740,000 tonnes.

“Since becoming CEO I have continued to focus our efforts on reducing costs and improving operational efficiencies, and here again we are making good progress with net cash costs decreasing by 5.6% to $1.18/lb. We now expect cash costs for the full year to be $1.25/lb, 5c/lb lower than previously guided.

“As part of these efficiency programmes we have also reviewed our mine plans and wider operational activities to improve decision making and the accuracy of forecasting. This has involved a rigorous assessment of our plans with a focus on profitable tonnes and a higher level of certainty without compromising safety or operational standards. Following this review, production in 2017 is expected to be in the range of 685,000 to720,000 tonnes.”

Antofagasta also announced board changes with the retirement of non-executive director Hugo Dryland and the appointment of Francisca Castro. Both changes will take effect from 1 November.

Chairman Jean-Paul Luksic said: “Hugo has been a director since 2011 and the Board has benefited from his considerable experience and his valuable insights and guidance on a wide range of matters. On behalf of the Board and the entire Company, I would like to express our sincere gratitude to Hugo for his service, and to acknowledge his contribution to the Company during this time.”

Castro has more than 25 years’ experience in several industries, including mining, energy, finance and public/private infrastructure projects in the USA and in Chile.

Prior to her appointment to Antofagasta’s Board, Castro spent eight years at Codelco, most recently leading the company’s Business Development function. Before joining Codelco she spent 10 years working in various roles in the Chilean Government. Castro began her career at the World Bank where she was based in Washington DC for five years.

Luksic said: “On behalf of the Board, we are very pleased that Francisca has accepted our invitation to join the Board as a Non-Executive Director. She brings extensive Chilean and international experience across the mining, energy and finance sectors and I know her knowledge and expertise will be of great benefit to Antofagasta.”

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Kenmare (LON:KMR) says the proposed issue of warrants to the government of Mozambique’s investment vehicle, Empresa Mocambicana de Exploracao Mineira, are due to expire today.

EMEM was given the opportunity to acquire warrants for up to 5,466,110 ordinary shares at an exercise price of $3.84 each.

The arrangements were subject to the payment of US$1 million consideration on or before 26 October.

Kenmare says given present difficult macroeconomic circumstances in Mozambique, EMEM has decided not to provide the consideration to take up the warrants within the agreed timeframe and therefore no warrants will be issued to EMEM under the agreed arrangements.

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Mariana Resources (LON:MARL) has provided an update on the ongoing diamond drill programme at the high-grade Hot Maden gold-copper project in north east Turkey.

“Exceptionally positive results continue to be generated from the ongoing drilling at Hot Maden,” said CEO Glen Parsons.

“Infill drilling in the Main Zone has once again delivered Hot Maden’s best hole to date, with the significant bonanza grades in HTD-71 of 69.6 m @ 62.7 g/t Au + 2.68% Cu from 210m downhole, including an impressive initial 7m at 526 g/t Au and 3.28% Cu, which further highlights the continuity of the ultra high grade gold-copper zone.

“These infill holes are effectively spaced on 25 m centres and have been designed to both increase confidence in the reported mineral resource estimate, as well as for the acquisition of geotechnical data for the ongoing mine development studies.

“Encouragingly, drilling at the current southern limit of the Main Zone resource area has also intercepted what appears to be either a deep extension or an offset to the Main Zone. The importance of this discovery is that we now see the potential to extend the Main Zone mineral resource to the south.

“Further exploration drilling in the Southern Discovery Zone, located immediately to the north of the Old Russian Mining Zone, has also delivered strong mineralisation from sulphide quartz veins and breccias which will ultimately add to the current initial inferred resource for this area.

“Exploration drilling successfully continues to work closer to, and into, the known mineralised Russian Zone further to the south.

“Technical studies related to mine development are ongoing, and the work completed will be incorporated into both the Preliminary Economic Assessment (“PEA”) and Pre-Feasibility Studies (“PFS”) accordingly.

“I look forward to updating the market on the anticipated PEA results which are now expected around the end of November, along with the further pending assays and ongoing drilling activities.”

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Obtala’s (LON:OBT) forestry subsidiary, Argento Mozambique, has been awarded CPI status by the Mozambican authorities entitling it to various tax benefits and protections in return for inward investment from the company’s subsidiary Argento Continental Corporation. CPI is a government institution with a mandate to attract and facilitate the establishment of private domestic and foreign direct investment in Mozambique.

Companies operating under CPI status also have the advantage of non-tax benefits including insurance services specifically to offset investment risk, VAT exemption on domestic acquisitions, and importantly, legal protections and compensation against expropriation with international bodies.

In order to satisfy qualification for CPI status Argento is required, amongst other things, to implement a phased investment plan of $3m over a 5 year period.

If this investment were not made, CPI status would be revoked rather than this amount constituting a debt. This award covers all operations within Mozambique and allows Argento to apply for Industrial Free Zone (IFZ) status with Mozambique’s Office for Accelerated Development Economic Areas (Gazeda).

Gazeda established a duty free zone located in the district of Nacala, Nampula province in 2007 which services the export of our timber to international markets via Nacala Port. Achieving IFZ status in Nacala would lead to further enhanced tax incentives.

The Company is in continued talks with investors regarding inward investment via the previously announced Argento Preference Share. Investor due diligence trips are scheduled to our African operations in November with regard to this matter.

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The sector’s biggest riser was Amur Minerals (LON:AMC) – up by more than 32.6% in late trading. The biggest faller was Aurum Mining (LON:AUR) – down by over 4.9%.

At 4:12pm:

(LON:AMC) Amur Minerals Corporation share price was +0.92p at 3.72p

(LON:ANTO) Antofagasta PLC share price was -20.25p at 520.25p

(LON:BEM) Beowulf Mining PLC share price was +0.38p at 5.5p

(LON:BKY) Berkeley Energia Ltd share price was -0.25p at 48p

(LON:CEY) Centamin PLC share price was +0.55p at 157.15p

(LON:CHL) Churchill Mining PLC share price was +0.25p at 28.75p

(LON:CZA) Coal of Africa Ltd share price was +0.01p at 3.48p

(LON:FDI) Firestone Diamonds PLC share price was 0p at 56.25p

(LON:FRES) Fresnillo PLC share price was -30.5p at 1612.5p

(LON:GEMD) Gem Diamonds Ltd share price was +2.75p at 119.75p

(LON:HOC) Hochschild Mining PLC share price was -1.55p at 271.65p

(LON:KMR) Kenmare Resources PLC share price was -12.75p at 302p

(LON:MARL) Mariana Resources Ltd share price was -1.5p at 67p

(LON:OBT) Obtala Resources PLC share price was +0.88p at 15.13p

(LON:VED) Vedanta Resources PLC share price was -8.25p at 696.75p

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