Mining Roundup

Aurum Mining (LON:AUR) has announced a conditional placing of up to 150,000,000 ordinary shares at 4p apiece raising approximately £6 million before expenses.

The company also plans to change its name to Shearwater Group, subject to a shareholder approval in January.

The company will focus on the acquisition and development of businesses operating within the fields of information security and cyber security, with the aim of building a group of significant scale providing digital resilience solutions to UK based private and public sector organisations. The funds raised from the placing will help support the company’s ‘buy, focus, grow’ strategy, and following the recently announced board appointments, ideally positions the business for growth.

The directors estimate in the UK alone that the highly fragmented cyber security market is worth approximately US$7 billion. Further, the global market for cyber security is estimated to be worth approximately US$75 billion and is growing at around 10 per cent per annum.

The company will also seek to divest its existing mining assets over the coming months.

Chairman David Williams said: “We have extremely ambitious plans for the Company as has been made clear by the series of high-profile appointments to our board in recent weeks. We now have a team with substantial experience of operating within the technology, defence, cyber, information security and communication sectors, and a track record of delivering shareholder value through accelerated buy and build processes. This is an exciting time for the Company.”

The placing price represents a discount of approximately 30% compared with the mid-market price of 5.75 pence at close of trading on 20 December.

The placing is conditional (among other things) upon the passing of certain resolutions in order to ensure that the directors have the necessary authorities and powers to allot new shares for cash on a non-pre-emptive basis to persons participating in the placing.

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Karelian Diamond Resources (LON:KDR), the diamond exploration company focused on Finland, has raised £425,000, prior to expenses, through a placing of 94,444,444 ordinary and 31,481,481 warrants all at an exercise price of 0.8 pence per warrant, at a price of 0.45p per placing unit.

The warrants can be exercised at any time from admission of the placing shares to the second anniversary of the anticipated admission of the placing shares, being 29 December 2018.

The company intends to use the proceeds of the Placing to fund the advancement of the Company’s principal diamond opportunities and in particular the recently acquired Lahtojoki Diamond Project, its exploration at Riihivaara where the Company has discovered a potential new diamond source and for working capital generally.

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Kibo Mining (LON:KIBO) has entered into a binding term sheet with Sanderson Capital Partners Limited for a new US$2,940,000 forward payment facility.

The Facility provides for Kibo to be advanced part of the USD 3,672,036 development cost recovery, payable to the Company by SEPCO III on achieving financial close of the Mbeya Coal to Power Project) which was announced by the Company on 13 October 2016. The facility has the effect of forward selling the receivable at a 20% discount.

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Eurasia (LON:EUA) has entered into a new funding facility with a syndicate led by Sanderson Capital Partners Limited of up £1 million. This includes the £500,000 drawn down under the previous loan arrangement with Sanderson, announced on 1 August.

The directors believe this loan will provide the company with sufficient working capital for the immediate future, with cashflow generation from West Kytlim due to begin in April when production commences. 7

The facility comprises the following;

– A £500,000 unsecured, interest free, fixed term loan due for repayment no later than 15 May 2017

– The loan can be drawn down in two tranches of £150,000 tranches no less than 30 days apart and two tranches of £100,000, with tranches two, three and four subject to successfully achieving certain specified project deliverables

– The option for Sanderson to include the £500,000 drawn down from the previous arrangement with Eurasia (announced on 1 August 2016) into this facility (taking the total to £1m).

– A fee payable in 30,769,231 ordinary shares in the company shall be issued as soon as is practicable to Sanderson as an arrangement fee on signing.

– In addition, a drawdown fee of 15% will be paid by Eurasia to Sanderson for each drawdown, and a further 15% fee will be paid if Sanderson elects to include the previous £500,000 into the facility.

Following the execution of the Agreement, the Company has today issued new shares in lieu of both the arrangement fee and initial drawdown fee. The total number of shares issued amounts to 33,581,731 ordinary shares (30,769,231 in respect of the arrangement fee, and a further 2,812,500 calculated as 15% of £150,000 at a share price of £0.008).

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Beowulf’s (LON:BEM) shares were temporarily halted on AktieTorget pending the release of a clarifying announcement on the subscription in Sweden and the UK to raise approximately £1.0 million.

As announced on 1 December, the company was, at that time, 49.52% owned by Swedish shareholders. During the last two years, ownership in Sweden has more than tripled, and the company’s shares are actively traded on the AktieTorget.

With the increased level of ownership and market liquidity in Sweden, the company recently engaged Stockholm Corporate Finance as its financial adviser, to investigate the potential for raising funds from Swedish investors and, as a result, Beowulf has raised approximately £860,000 (before expenses).

On completion of the current fundraising the percentage owned by Swedish shareholders will increase to 51.50%.

In addition, the company has raised an additional £140,000 in the UK to complete the £1.0 million raise.

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Amur Minerals Corporation (LON:AMC) reports a substantial upgrade to the potential of the Kun-Manie project.

This follows a mining trade-off study by Runge, Pincock, Minarco on the Maly Kurumkon/Flangovy deposit located at Amur’s Kun-Manie nickel-copper sulphide project.

The new report indicates that previous preliminary economic assessment estimates for MKF significantly underestimate mineable reserves and instead indicates that 58,900 tonnes (31%) more nickel and 3,000 tonnes (5%) more copper is recoverable.

Highlights:

– RPM has identified a potential mineable reserve totaling 44.5 million tonnes of ore averaging 0.75% nickel and 0.19% copper located within its MKF deposit. The total tonnes of nickel to be mined are 332,172 with copper totaling 83,467 recovered tonnes. This represents approximately 50% of the planned 90 million tonne life of mine production.

– The RPM mine plan envisages that production from MKF will be derived from three open pits recovering the near surface ore within the western area of MKF. From these pits, access to ores suitable for underground production along the entire 2,100 metre length is also planned.

– The RPM study is based on the SRK Consulting (UK) Ltd mineral resource estimate as of May 2016 and does not include the 2016 infill drill results converting the Inferred resources to that of Indicated resources or the 40% expansion in the mineralised length of MKF from 2,100 metres to 3,000 metres. The RPM MTS is therefore considered to understate the mining potential at MKF and will be regenerated after the update to the MKF resource statement scheduled for completion in Q1 2017.

– Using an underground long hole retreat mining method and West Australia mining costs which are anticipated to be substantially higher than Russian production costs, a total of 31.7 million tonnes of ore have been identified for production and the average mined ore grades are projected to be in the order of 0.79% nickel and 0.19% copper.

– Open pit production is projected to be 12.85 million ore tonnes averaging 0.63% nickel and 0.18% copper per ore tonne. A total of 43.7 million tonnes of waste will be mined providing a stripping ratio of 3.4 tonnes of waste per mined ore tonne.

– The average metallurgical recovery is projected to be 76% for nickel and 78% for copper. Based on SGS Minerals’ grade recovery curves, a total of 251,700 tonnes of nickel and 65,400 tonnes of copper are expected to be recovered to the concentrate. Further work by Gipronickel Institute wherein a half tonne bulk sample is being processed to determine the final metallurgical recovery is under review and preliminary results indicate the projected SGS metallurgical grade recovery curves may be conservative.

– A total of 2.5 million tonnes of sulphide concentrate is projected to be recovered from the 44.5 million tonnes of ore and it is estimated that the concentrate will contain an average of 9.9% nickel and 2.9% copper.

– The total operating cost per tonne of ore is projected to be US$ 40.02 per tonne whilst long term nickel and copper prices used to define the reserve are US$ 16,530 per tonne nickel (US$ 7.50) and US$ 5,510 per tonne copper (US$ 2.50). By-product metals were not used to determine the extent of the mining reserves.

– The RPM MTS represents a substantial upgrade over the Company’s Preliminary Economic Analysis wherein a total of 45.5 million tonnes of ore from MKF were projected to be mined at an average grade of 0.53% nickel (approximately 241,000 tonnes) and 0.15% copper (approximately 69,300 tonnes).

– The PEA projected that underground production would be comprised of 28.1 million ore tonnes at 0.49% nickel and 0.15% copper. Open pit ore production was anticipated to be 17.4 million tonnes averaging 0.59% nickel and 0.16% copper having a stripping ratio of 2.73 tonnes of waste per tonne of ore.

– Based on nearly the same total ore production derived by RPM and reported by the Company in its PEA, the total metal reported to be recovered to the PEA concentrate was projected to be 192,800 tonnes of nickel and 62,400 tonnes of copper. The newly generated RPM total recovered metal is substantially greater by 31% (58,900 tonnes) for nickel and 5% (3,000 tonnes) for copper.

– At the long term nickel price of US$ 16,530 per tonne and copper price of US$ 5,510 per tonne, a total increase in the estimate of the metal value within the concentrate of US$ 990 million has been recognised over that calculated previously in the PEA.

Chief executive Robin Young said: “We are extremely pleased to report a substantial upgrade to the potential of the Kun-Manie project. The Runge, Pincock, Minarco trade-off study supports our earlier observation that much of the mineralisation within three of our four deposits at MKF should be mined using a combination of open pit and underground mining methods to enhance the economic potential of the project.

“Even though the trade-off study included Inferred resource, the Board believes the results of the 2016 drill season are likely to enable the conversion of the Inferred portion of the MKF resource to the status of Indicated, which is suitable for inclusion in reserve definition calculations.

“In addition, the extension of the mineralised length of the MKF deposit by 900 metres, which was also drilled at the Indicated spacing, is expected to further increase the ore reserve for MKF. We also anticipate similar upgrades to previously reported resources at the Ikenskoe / Sobolevsky and Kubuk deposits.

“Over the course of the holiday season, we will have the opportunity to complete a review of the Gipronickel metallurgical results on the half-tonne bulk sample to confirm the extent of the difference in the SGS metallurgical recovery curve data and that of this important sample. Presently, we are encouraged that we may see further improvements in the recovery of the metal from the processing plant on site.”

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Ariana Resources (LON:AAU), the gold exploration and development company operating in Turkey, has acquired 100% of the Salinbas gold project from Eldorado Gold (Netherlands) BV, a subsidiary of Eldorado Gold Corporation.

Salinbas had been part of a 49:51 joint venture with Eldorado Sub since 2012 and previously with European Goldfields Limited from 2008 prior to its acquisition by Eldorado.

Highlights:

– Salinbas Project is located within a multi-million ounce goldfield containing several significant gold-copper projects, notably the adjacent Hot Maden project.

– Ariana 100% owner of Salinbas following a Net Smelter Return (“NSR”) royalty of up to 2% on future production being granted to Eldorado Sub.

– Company considering a focused work programme on Salinbas during 2017 to identify potential resource extensions and consider routes to commercialise the project.

– Project area includes the Salinbas Au-Ag deposit, the Ardala Cu-Au-Mo porphyry and the Hizarliyayla Au-Ag system.

– Salinbas contains an approximately 10Mt Indicated and Inferred JORC resource, with an average grade of 2.0 g/t Au and 10.2 g/t Ag (for 650,000 oz gold and 3.2Moz of silver).

– Scoping-study completed on Salinbas demonstrated potential for production of approximately 50,000 ounces of gold and 100,000 ounces of silver per annum over 10 years, providing an NPV(8%) in excess of US$100 million.

– Ardala contains an approximately 16Mt Inferred JORC gold resource with a grade of 0.6 g/t Au (for 323,000 oz gold), also containing copper (up to 0.2%) and molybdenum (up to 0.01%) domains.

Managing director Dr. Kerim Sener said: “Completing this transaction with Eldorado on the Salinbas Project comes at a significant time in the evolution of the Company. With the Kiziltepe Sector of the Red Rabbit Project due to enter production shortly, we are keen to enhance our project pipeline and to demonstrate a pathway to increased downstream production capacity.

“The Salinbas Project represents a major opportunity for the future growth of Ariana, coming with approximately 1Moz in JORC Indicated and Inferred resources in its own right and in a region with significant exploration upside, as underscored by the recent discovery of the approximately 4Moz Hot Maden project just 16 kilometres to the south.

“We look forward to providing further updates on the project and towards enhancing its value in what is proving to be a multi-million ounce goldfield and one of the most prospective areas for new gold exploration in Turkey.”

At 4:13pm:

(LON:AUR) Aurum Mining PLC share price was -1p at 4.75p

(LON:BEM) Beowulf Mining PLC share price was -0.13p at 5.25p

(LON:BKY) Berkeley Energia Ltd share price was -1.5p at 50p

(LON:CEY) Centamin PLC share price was +3.55p at 124.15p

(LON:CZA) Coal of Africa Ltd share price was -0.22p at 3.13p

(LON:EUA) Eurasia Mining PLC share price was -0.08p at 0.7p

(LON:FDI) Firestone Diamonds PLC share price was +1p at 52.25p

(LON:FRES) Fresnillo PLC share price was +2p at 1093p

(LON:GEMD) Gem Diamonds Ltd share price was +1.13p at 105.13p

(LON:HOC) Hochschild Mining PLC share price was -1.7p at 188.5p

(LON:KDR) Karelian Diamond Resources PLC share price was -0.1p at 0.55p

(LON:KIBO) Kibo Mining share price was -1p at 6.13p

(LON:KMR) Kenmare Resources PLC share price was -9.87p at 239.88p

(LON:VED) Vedanta Resources PLC share price was -0.25p at 910.75p

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