REG - Pembridge Resources - Minto Operations Update Q4 and Capstone Liability

Pembridge ResourcesAnnouncement

07/01/2022 11:45

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RNS Number : 7924X  Pembridge Resources plc  07 January 2022

 

7 January 2022

 

Minto Operations Update for Q4 and Partial Deferment of Capstone Liability

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER ARTICLE 7 OF THE MARKET
ABUSE REGULATION (EU) 596/2014 AS AMENDED BY REGULATION 11 OF THE MARKET ABUSE
(AMENDMENT) (EU EXIT) REGULATIONS 2019/310. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

London, United Kingdom - Pembridge Resources plc (LSE: PERE) ("Pembridge" or
the "Company") is pleased to report operational results of Minto Metals Corp
("Minto") for the full year of 2021, and announce that Minto has reached an
agreement with Capstone Mining Corp ("Capstone") to defer paying part of the
purchase price obligation and paid a further $10 million of that obligation.

Highlights

·    Minto copper production of 2021 increased by 46% on prior year

·    Minto 2022 outlook guidance showing continued improvement in
operations

·    $10 million of the remaining Minto purchase price payable to Capstone
paid in December 2021, the remaining $5 million deferred until 2023

Operations update

Minto has announced metals production levels in 2021 that have greatly
improved on 2020, helped by strong performances in November and December, when
they achieved an average of 3,000 tonnes per day of ore processed through the
mill and 6.1 million pounds of payable copper.

                                     Year ended
 Metal                  31 Dec 2021  31 Dec 2020  % change
 Payable copper (Mlbs)  26.0         17.8         46%
 Gold (oz)              11,783       7,674        54%
 Silver (oz)            135,354      67,490       101%

 

 

 

2022 outlook from Minto

Minto has released outlook guidance on production and cost for 2022.  The
plan is to operate the Mill at an average throughput of 3,000 tonnes/day for
H1/2022 and 3,250 tonnes/day for H2/2022 as the ore production continues to
ramp up towards the Mill's ultimate permitted capacity of 4,200 tonnes/day.

 Production and cash costs
 Copper production (million pounds)           28.0 - 31.0
 C1 cash cost (USD/lb)                        $2.70 - $2.90
 Capital expenditure (CAD millions, rounded)
 - Mine development (new areas)               $13 million
 - Vehicle Lease                              $7 million
 - Sustaining                                 $16 million
 Exploration (CAD millions, rounded)          $6 - $9 million

 

Capstone Liability

Under the Sale and Purchase Agreement of 3 June 2019, under which Pembridge
purchased the Minto mine from Capstone, the purchase price for the mine is up
to US$20 million (contingent on production targets and copper prices), to be
paid to Capstone.  In accordance with the Shareholders Agreement in place
prior to Minto becoming a publicly listed company and the Future Expenditures
Agreement between Pembridge and Minto announced on 1 December 2021, payments
to Capstone of the purchase price are to be made by Minto.  Of the total
purchase price of $20 million, $5 million has been paid by Minto on 30 March
2021 and the remaining $15 million (with the contingent requirements having
been met) was due to be paid in December 2021.  In accordance with a new
Agreement reached with Capstone, the amount to be paid to Capstone in December
2021 was adjusted to USD $10 million, which was paid prior to 31 December
2021.  The remaining USD $5 million is now payable on 15 January 2023.

http://www.rns-pdf.londonstockexchange.com/rns/7924X_1-2022-1-7.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7924X_1-2022-1-7.pdf)

Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board of
Pembridge said:

"We thank Minto's leadership and all of the team who made the improved
performance of the Minto mine happen in 2021 and look forward to further
improvements in 2022.  The Minto operation is now on a sound path to
continued increase of ore processing volumes as well as delivering on life of
mine extension once exploration is completed and results delivered.

With the copper price having been above US$3.50/lb for more than two
consecutive quarters since the acquisition of Minto by Pembridge, the
contingent consideration for the Minto mine has now become due.  We are
pleased that Minto has paid $15 million of the total purchase price to
Capstone in 2021 and we appreciate Capstone's flexibility in agreeing to this
partial deferment for the remaining $5 million.  Copper prices above $3.50/lb
that have triggered the contingent purchase price payment have also resulted
in higher revenues for Minto ensuring profitable operations and ability to
invest in the future development of the Minto mine."

 

Cautionary Statement

This News Release includes certain "forward-looking statements" which are not
comprised of historical facts. Forward-looking statements include estimates
and statements that describe the Company's future plans, objectives or goals,
including words to the effect that the Company, or management, expects a
stated condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "expects", "estimates",
"may", "could", "would", "will", or "plan". Since forward-looking statements
are based on assumptions and address future events and conditions, by their
very nature they involve inherent risks and uncertainties. Although these
statements are based on information currently available to the Company, the
Company provides no assurance that actual results will meet management's
expectations. Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results, performance,
prospects and opportunities to differ materially from those expressed or
implied by such forward-looking information. Forward-looking information in
this news release includes, but is not limited to, the Company's intentions
regarding its objectives, goals or future plans and statements. Factors that
could cause actual results to differ materially from such forward-looking
information include, but are not limited to, the Company's ability to predict
or counteract the potential impact of COVID-19 coronavirus on factors relevant
to the Company's business, failure to identify additional mineral resources,
failure to convert estimated mineral resources to reserves with more advanced
studies, the inability to eventually complete a feasibility study which could
support a production decision, the preliminary nature of metallurgical test
results may not be representative of the deposit as a whole, delays in
obtaining or failures to obtain required governmental, environmental or other
project approvals, political risks, uncertainties relating to the availability
and costs of financing needed in the future, changes in equity markets,
inflation, changes in exchange rates, fluctuations in commodity prices, delays
in the development of projects, capital, operating and reclamation costs
varying significantly from estimates and the other risks involved in the
mineral exploration and development industry, and those risks set out in the
Company's public documents. Although the Company believes that the assumptions
and factors used in preparing the forward-looking information in this news
release are reasonable, undue reliance should not be placed on such
information, which only applies as of the date of this news release, and no
assurance can be given that such events will occur in the disclosed time
frames or at all. The Company disclaims any intention or obligation to update
or revise any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by law.

 

ENDS

 

NOTES TO EDITORS

Pembridge is a mining company that is listed on the standard segment of the
Official List of the FCA and trading on the main market for listed securities
of London Stock Exchange plc. Pembridge has an investment in Minto Metals
Corp, a British Columbia incorporated business listed on the TSX Venture
Exchange under the symbol "MNTO" that operates the Minto mine in Yukon,
Canada.

About Minto Metals Corp

Minto Metals Corp operates the underground copper-gold-silver mine located in
central Yukon, approximately 240 kilometres north of the capital Whitehorse
along the Klondike Highway. In excess of US$350 million of capital expenditure
has been invested into Minto operations since site construction began in 2006.
The Minto mine was in continuous production between 2007 and 2018, when the
mine was placed onto temporary care and maintenance. Pembridge acquired the
Minto mine from Capstone Mining Corporation in June 2019 and restarted
operations in October 2019.

Enquiries:

 

Pembridge Resources plc:
 
+44 (0)7905 125740

Gati Al-Jebouri, Chief Executive Officer and Chairman of the Board

David James, Chief Financial Officer

 

Brandon Hill Capital - United Kingdom:
                                      +44
(0)20 3463 5016

Jonathan Evans

 

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