TIDMHMB
20 April 2012
Hambledon Mining Plc
("Hambledon" or "the Company")
Activities Report for the Quarter Ended 31 March 2012
Hambledon Mining plc (AIM: HMB), the Kazakhstan gold mining and
development company, today provides its operational and corporate
report for the three months from 1 January to 31 March 2012. A copy
of this report will be available on the Company's website,
www.hambledon-mining.com
Q1 OPERATIONAL & CORPORATE OVERVIEW
Gold Production and Mineral Processing
-- Year-on-year gold production in Q1 increased 9.4%
-- Year-on-year mined tonnes in Q1 increased by 18%
-- The winterisation programme completed during 2011 aided overall
production figures
Underground Development
-- Development of the trial stopes has progressed in accordance with
design
-- Design and underground development of the first bulk mining zones is
on target
-- The underground drilling programme to continue throughout 2012
Finance
-- RaisedUS$8.6M net of expenses through share issue
-- Raised US$3M through a private share placement with the European Bank
for Reconstruction and Development ("EBRD"),
-- Agreed a US$15M debt facility with EBRD.
-- Received proceeds of US$1.2M from the liquidation of Ognevka
Tim Daffern, Chief Executive Officer of Hambledon, commented
today: "Q1 has been a quarter of mixed fortunes for the Company. It
was the first full quarter of gold production from the underground
mine which performed in line with expectations and is a solid base
from which to grow production. Extraction from underground remains
on schedule to attain a full year target of 100,000 tonnes in 2012
. Because of the extremely cold weather, the first quarter is
always the most challenging , but nevertheless the Company produced
a total of 4,870 ounces gold, an increase year-on-year for Q1 of
almost 10% and improvements were seen across a number of key
indicators. The performance and reliability of the process plant
was encouraging during severe weather condition, helped by the
winterisation programme carried out in 2011. We are also delighted
to receive the backing of the EBRD and look forward to a successful
partnership in building Hambledon's future.".
Production figures for the three months from 1 January - 31
March 2012:
January February March Total
Total milled tonnes (dry) 50,373 48,044 47,663 146,080
Gold grade (g/t) 1.24 1.43 1.32 1.33
Contained gold (gms) 62,462 68,703 62,915 194,080
Contained gold (oz) 2,008 2,209 2,023 6,240
Gold recovery % 79.12 76.21 79.01 78.1
Total recovered gold (oz) 1,589 1,683 1,598 4,870
Total recovered silver (oz) 2,096 1,770 1,163 5,029
Of which:
Underground milled tonnes (t) 4,220 4,650 5,635 14,504
Underground gold grade (g/t) 2.05 1.39 4.16 2.66
PROCESSING FROM OPEN PIT AND UNDERGROUND
Gold production for the quarter ended 31 March 2012 of 4,870
ounces was in line with management expectations. Mining activities
were primarily from the main open pit, with modest amounts of ore
extracted from the underground mine. Q1 was the first full quarter
of underground extraction and the Company expects the underground
contribution to grow significantly over the course of 2012. It is
pleasing to see that the grade from the open pit is increasing in
line with the geological models and is approximately 12% higher
than the same period last year. Although weather conditions were
severe as is normal in the Sekisovskoye region during this period,
the winterisation programmes, process plant refurbishment works
conducted in 2011 and improvements to maintenance management helped
to mitigate some of its effects.
The process plant recovery continues to be below budgeted
levels. The cause of this relates to the fluid chemistry associated
with the detoxification materials which are being used and
increased levels of thin layers of clays and carbonates in the
underground ores and deeper sections of the open pit. Recent
testwork also indicates an increased level of ore hardness.
Remedial works to modify the plant are on-going and are expected to
be complete in mid-2012, so that higher recovery levels can be
attained.
UNDERGROUND
The decline to access the next level of the underground ore zone
advanced according to plan during the quarter with no safety
incidents. The development of the underground decline is to be to
the 240mrl in 2012, allowing extraction of 100,000 tonnes of ores
and establishing a platform of infrastructure for 2013 mining
works.
Mining of ores has continued as planned with trials of different
extraction stope dimensions to test geo-technical parameters, all
of which have provided the necessary confidence to accelerate the
use of bulk mining. The trial mining also allowed grade control
methods to be stress tested and necessary improvements made to
ensure that high grade ores were not intermingled with low grade
hanging wall and footwall material.
The construction of the main ventilation house with attendant
ventilation fans and heating machinery is on target for
commissioning in Q2, 2012, in line with mining plans.
DRILLING
A total of 12,650m of diamond drilling has been completed since
the underground geological delineation programme started. The
results of this drilling have been published and illustrate the
robust geological resource at Sekisovskoye and that the average
widths are around 5.5m.
The underground drilling programme will continue throughout 2012
and will be used to both consolidate and upgrade the resource
knowledge and also to define mining zones for grade control of
stopes.
INFRASTRUCTURE
The remedial works associated with Tailings Dam 3 ("TD3") have
commenced and are expected to be completed in Q3, 2012. All site
works are being supervised by onsite technicians and engineers
employed by Golders Associates and SRK.
The court actions relating to the TD3 leak are on-going and
Hambledon is co-operating fully with the government and courts on
all matters. The Company has engaged two specialist law firms to
assist in the appeal against the penalties. We remain confident
that the fines paid to date will be significantly reduced once the
appeal process is completed. Further announcements will be made in
due course once more information becomes available.
The construction of Tailings Dam 4 embankment is 75% complete.
The construction of the base has commenced. All design and
construction supervision is being undertaken by Golders Associates
(UK).
The design and construction of the new effluent disposal and
treatment building with attendant machinery is due to start in the
middle of Q2, 2012 and this marks the next stage in developing an
integrated waste handling system that will lower substantially the
operating costs of the mineral process plant and effluent
disposal.
The detailed design and construction of the second electrical
line is due to commence in Q2, 2012, now that all permits have been
received. The execution of this project will take approximately 14
months and will result in a second secure electrical supply with
increased process plant availability and therefore lower operating
costs.
CORPORATE
Akmola
In relation to the acquisition of Akmola Gold LLP, despite the
Company's efforts to date, the position remains that certain
required permits and waivers from the Kazakhstan authorities have
not been received.
Ognevka
The bankruptcy proceedings for Ognevka have been completed and
Hambledon has received payment of US$1.2 million as fulfilment of
the proceeds to be paid to the creditors. The completion of the
auction process and divestment of this property underlines the
Company's focus on precious metal mining in Kazakhstan.
Finance
In March 2012, the Company raised a total of US$8.6 million net
of expenses in a placing of shares. In April 2012, the Company
announced an equity investment in Hambledon by the EBRD of US$3
million giving the EBRD 6% of Hambledon's issued ordinary share
capital.
The conditions for drawdown of the first US$10 million of the
EBRD debt facility are well advanced and the remaining obligations
and tasks should be completed in Q2, 2012 to allow drawdown of the
first tranche before the end of H1, 2012.
For further information please contact:
HAMBLEDON MINING:Charles Zorab, +44 (0)207 233 1462orFAIRFAX
I.S. PLC (NOMAD AND BROKER):Ewan Leggat/Katy Birkin, +44 (0)207 598
5368orTAVISTOCK COMMUNICATIONS:Ed Portman/Jos Simson, +44 (0)207
920 3150
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