Biely Vrch Gold Project: Another step forward for EMED Mining?
Today's RNS regarding EMED's 100% interests in Slovakia is another step forward in the company's slow but sure, steady as you go, move towards their target of becoming a notable copper & gold producer in Europe.
The MD, Harry Anagnostaras-Adams, today noted that "The revised Scoping Study for Biely Vrch has provided a much better understanding of our development options. We are now scheduling the next phase of the permitting process along with the associated community consultation and development feasibility studies. The regulators have just approved the initial Biely Vrch gold resource estimate."
He added, "That recognition by the State Commission constitutes a vital first step in the permitting process. In parallel, we are continuing to explore our large licence area in central Slovakia and are conducting due diligence on synergistic opportunities in the region."
For those that don’t know it, Emed Mining Public Ltd (LON:EMED) was admitted to trading on AIM in May 2005. The Company is focused on the development of metal production in Europe, with a focus on copper and gold. The Group's region of interest is the tectonic belts spanning across Europe and over to the Middle East. Recently the company's share price has taken a hit over the delays in obtaining the permits to re-open their flagship project, which is the old Rio Tinto copper mine in Spain. This is the largest metal deposit in Spain and comprises an open pit mine, copper-concentrator and waste disposal facilities. The company had hoped to have this process completed by now. But the local government had to take note of new EU Environmental and EMED had to re-issue their original applications to suit the new EU legislation. This process seems to have added a year to the re-opening of Rio Tinto and some shareholders have lost confidence as a result.
The interesting thing is that EMED's 100%-owned Biely Vrch Gold Project in Slovakia may even be in EMED's present share price for nothing! When it gets into full production in a few years, the Biely Vrch project is expected to produce some 60,000 ozs of gold per annum at a likely cost of around US$530/oz. That's a good opportunity in my book! Another iron in EMED's fire is KEFI which is currently engaged in gold exploration in Turkey and, most recently, in Saudi Arabia. EMED owns around 25% of KEFI.
So we have here a company with three potential opportunities. These are:
1. A re-opened copper mine in Europe which should provide a steady profit stream for at least 14 years
2. A likely gold project in Slovakia forecast to produce 60,000 ozs of gold for around ten years and;
3. Potential gold projects in Turkey and Saudi Arabia.
And all that for around 8.75p per share! Finally EMED are planning to list on the Toronto Stock Exchange before the end of this year. When they do this, it’s worth noting that EMED will become ISA-able.
I welcome thoughts or comments on this opportunity.
Disclosure of Interest: The Author holds shares in EMED Mining.
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3 comments
Earlier this month, EMED announced that its listing on the Toronto Stock Exchange was active, at last!
The Stock Code there is TSE:EMD. The shares were listed at a price of C%17.5 cents [C$0.175] and closed on Friday at C$0.19.
This of course means that the share is now ISA-able and, with the help of the excellent people at Selftrade, my EMED shares now lie in my ISA, after a quick bed and ISA transaction! So George Osborne will not get his hands on any future EMED profits of mine!
One more of the many intricate steps also needed for EMED to receive the go ahead from the local government [the Junta of Andalucia] has been taken. EMED recently were able to announce that the fourth signature had been added to a formal letter from the Liquidation Committee of the previous owners confirming the transfer of certain aspects of the ownership. This letter now has four signature out of a possible six. It was an important step in the interminable process of re-opening the Rio Tinto mine as the confirmation that the majority of the Liquidation Committee were in favour of the transfer, has been insisted upon by the Junta.
So it looks as though the way is now a bit clearer for this re-opening and the Riio Tinto mine may even be in production before the end of 2011 as forecast by EMED a year or so ago. The EMED share price fluctuated between 9p and 12p in December.
Meanwhile, KEFI Minerals - an EMED subsidiary, is also awaiting important news from Saudi Arabia. Here they are in a joint venture with ARTAR, a major Saudi construction company, and have submitted a total of 21 Exploration Licence Applications [ELAs] following Field Reconnaissance over some years. It is understood that the first few of these exploration licences is expected soon [But to be honest - they have been "expected" for the last three or four month!]. All the ELAs are in areas of historic gold mining and both EMED and KEFI sound quite excited about the possibilities.
KEFI also has potential in Turkey and EMED has its own gold interests in Slovakia with the Detva Gold Project in Slovakia which contains the Biely Vrch porphyry gold deposit. In addition EMED in recent months has acquired an option over the Regua tungsten deposit in Portugal.
So EMED offers an ISA-able investment and seems to be on the cusp of an exciting future in Copper, Gold and now Tungsten.
I hold shares in EMED and KEFI!
all that for around 8.75p per share!!
Giving the Market Cap would be more helpful. From the recent Equity Development note, it looks about GBP 55M.
Have you any sort of figures for expected production and costs from Rio Tinto? That's the key to any valuation.
Assuming everything goes to plan in Slovenia,(a massive assumption for any small miner, let alone one with a history as slow as EMED's), that's a cashflow of around £15M p.a., but when can we expect that sort of production?
You'd want early-stage gold exploration assets to be in for free, so there's no point valuing the Turkish and Saudi assets. Unless KEFI are listed?
In response to your queries and to give you a "key to valuation":
EMED's market cap at today's price [7.5p as I write] is £31.4 million [figure derived from ShareScope and number of shares at issue].
The estimated cash flow from copper production, production costs and timescales, at the re-opened Rio Tinto were all given in the company's presentation at the recent AGM at the mine and at a meeting in London. This presentation is on the company's website see:
[http://www.emed-mining.com/site/dmdocuments/10%2006%2015%20-%20EMED%20-%20AGM%20Pres.pdf]
The nett annual cash flow from the mine in full production is estimated to be between £69 million and £56 million @ a copper price of $3/lb depending on various £:$ exchanges rate [see slides 19 & 20].
The project is costed at £55 million [slide 15] and the payback time will be 2 years [slides 19 & 20]
The steps and timescales for the Rio Tinto project are given in slides 21 & 22 and the mine should be in full production before the end of 2011 - but this IS Spain!!
Biely Vrch is mentioned on slide 24 but there's no timetable for production as they are still at the stage of the scoping study.
KEFI is listed on Aim and its current market cap is £2.15 million at today's price.
Hope that's of interest
p3dr036