REG - EMED Mining Public - Quarterly Financial Statements <Origin Href="QuoteRef">EMED.L</Origin> - Part 2

Atalaya MiningAnnouncement

16/07/2015 13:30

- Part 2: For the preceding part double click  ID:nRSA7585Ra 

rainwater accumulated in the TMF
since industrial operations ceased in the early 2000´s with no actual damage
to the environment having taken place. 
 
In the Company's view it is unlikely that any fine or sanction will be imposed
against EMEDT once the Administrative File 2010 reaches its final conclusion
after all appeals are exhausted in approximately 3-5 years. 
 
On 28 January 2014, EMEDT was notified that the Huelva Territorial Delegation
of the Ministry of Environment (which has absorbed the former AWA) had
initiated another disciplinary proceeding for unauthorized discharge (the
"Administrative File 2013") of administrative nature following allegations by
the administration of alleged unauthorized industrial discharges from the TMF
at the Rio Tinto Copper Mine during the heavy rains occurred from 7 March to
25 April 2013.  The Administration has proposed the amount of E726,933.30 as
compensation for alleged damages to the environment ("Public Water Domain")
and a fine of between E300,507 to E601,012.  On 11 February 2015, the Huelva
Territorial Delegation of the Ministry of Environment dismissed the case. 
This outcome is especially relevant as it can now be used as a precedent for
defence of any other proceedings of a similar nature. 
 
On 19 February 2015, EMEDT was notified that the Huelva Territorial Delegation
of the Ministry of Environment had initiated another disciplinary proceeding
for unauthorised discharge (the "Administrative File 2014") which has proposed
a fine of between E300,507 to E601,012.  On 10 March 2015 the Company
submitted the relevant defence arguments. 
 
In the Company´s view, it is unlikely that any fine or sanction will be
imposed against EMEDT once the Administrative files reach their final
conclusion and taking into account the already accepted allegations and
mentioned arguments of defence. 
 
Rehabilitation obligation 
 
The Group anticipates that a rehabilitation liability will be recognised upon
commencement of operations at Proyecto Riotinto, the amount of which is not
determinable at this time as it is subject to negotiation with the relevant
authorities. 
 
16. Commitments 
 
Spain 
 
There are no minimum exploration requirements at Proyecto Riotinto.  However,
the Group is obliged to pay municipal land taxes which currently are
approximately E110,000 per year in Spain and the Group is required to maintain
the Rio Tinto site in compliance with all applicable regulatory requirements. 
 
As part of the consideration for the purchase of land from Rumbo, EMED
Tartessus has agreed to pay a royalty to Rumbo subject to commencement of
production of $250,000 in each quarter where the average price of LME copper
or the average copper sale price achieved by the Group is at least $2.60/lb. 
No royalty is payable in respect of any quarter where the average copper price
for that quarter is below this amount and in certain circumstances any
quarterly royalty payment can be deferred until the following quarter.  The
royalty obligation terminates 10 years after commencement of production. 
 
Commencement of production is defined as being the first to occur of
processing of ore at a rate of nine million tonnes per annum for a continuous
period of six months or the date that is 18 months after the first product
sales from Proyecto Riotinto.  Additionally, if after seven years from the
date of the land purchase, the Group has not obtained all necessary licenses
to open and operate Proyecto Riotinto, the land will be sold back to Rumbo for
E1.  Should the Group sell the land prior to this date to a third party, Rumbo
shall be paid E5.5 million and the above mentioned royalty novated to the
third party. 
 
EMED Tartessus has entered into a 50/50 joint venture with Rumbo to evaluate
and exploit the potential of the class B resources in the tailings dam and
waste areas at Proyecto Riotinto.  Under the joint venture agreement, EMED
Tartessus will be the operator of the joint venture, will reimburse Rumbo for
the costs associated with the application for classification of the Class B
resources and will fund the initial expenditure of a feasibility study up to a
maximum of E2 million.  Costs are then borne by the joint venture partners in
accordance with their respective ownership interests.  Half of the costs paid
by EMED Tartessus in connection with the feasibility study can be deducted
from any royalty which may fall due to be paid. 
 
At Proyecto Riotinto, the Group has four year options with each of Zeitung and
Inland for the purchase of certain land plots adjacent to the mine at a
purchase price of E4.202 million (expiry date 31 July 2016)  and E4.648
million (expiry date 2 August 2016) respectively.  The Zeitung option requires
an annual option payment from the Group of E119,500 and the Inland option
requires an annual payment of E130,500 which is deductible from the purchase
price.  In each case, half of the purchase price can be made by the issue of
shares in EMED Mining based on a weighted average market price at the time of
the purchase. 
 
Slovakia 
 
Annual tenement rental fees are E41,000.  EMED has met all of its obligations
to date. All annual technical and financial reports have been submitted on
time.  Exploration commitments are in the order of E65,000. In December 2014,
EMED has entered into a conditional Earn-in Agreement with Prospech Ltd
("Prospech"), a private Australian exploration company, in relation to 2
exploration licences held by EMED's 100% owned Slovakian subsidiary, Slovenske
Kovy s.r.o. Prospech will invest up to a E1 million over a three-year period
in return for an 81% interest in Slovenske Kovy. 
 
Other 
 
In Cyprus, there are no exploration commitments required and tenement rentals
are approximately E30,000 per annum. 
 
17. Events after the reporting period 
 
On 25 June 2015, the Company completed a fundraising of £64.9m (before
expenses) by the issue of 1,366,203,821 new Ordinary Shares at an issue price
of 4.75 pence per share.  The capital raising was effected by a way of a
subscription, placing and open offer.  In addition, amounts owed by the
Company pursuant to the Loan facility and Notes were satisfied by the issue of
694,316,864 new Ordinary Shares at the issue price of 4.75 pence per share. 
 
Mr. Jesus Fernandez, an employee of the Trafigura Group, joined the Board of
the Company on 23 June 2015. 
 
There were no other events after the reporting period, which would have a
material effect on the consolidated financial statements. 
 
This information is provided by RNS
The company news service from the London Stock Exchange