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Posted by Anonymous Sender on December 31, 2007, 3:45 pm
I own so many options I'll be a major shareholder on conversion!!
European Minerals Climbs on Project Startup
By Ben Abelson
28 Dec 2007 at 01:22 PM GMT-05:00
CHICAGO (ResourceInvestor.com) -- Shares of European Minerals [TSX:EPM; AIM:
EUM] climbed as much as 5% today to C$1.42 after the company announced the
first gold pour at Varvarinskoye, its large-scale copper-gold project in
Kazhakstan.
The news marks the culmination of several years of project and financial
development for EPM, previously cited by this correspondent as one of the
more compelling value propositions in the precious metals shares.
Varvarinskoye is now just months away from full-scale commercial production.
According to the company, all process plant construction and mine
infrastructure is now complete, and ore is currently being crushed and
introduced into the plant. The flotation circuit will begin commissioning in
January, with design throughput rate – which full-scale commercial
production – achievable by Q2.
Just over one year ago, as difficulties securing debt financing hampered the
stock, EPM’s shares traded in the C$0.65 range and was highlighted by
Resource Investor as extraordinarily mis-priced. In Sep. 2006, RI noted: “
Within 6-12 months, barring a complete and utter meltdown in metals prices,
European Minerals will be valued at a significantly higher multiple.”
This wasn’t the first time we've highlighted European Minerals. In Jan. 2006,
we said at share prices of C$0.90 and gold in the mid-US$550s, “the stock
represents one of the best risk/reward opportunities visible in the junior
mining sector in a long time.” The gold price is now in the US$830s.
The stark turnaround comes as a reminder to oft-skittish mining investors to
hold their ground and continue to invest when exceptional projects hit
operational or financial difficulties.
European Minerals CEO and President Bert Kennedy called the gold pour “a
remarkable achievement given the difficulties we have overcome and in light
of the challenges the whole mining industry faced in 2007.” He added the
company will “complete our evolution to a commercial mining company in the
coming months.”
The project is wholly owned by European Minerals and currently has resources
of 4.46 million ounces with proven and probable reserves of currently 2.2
million ounces of gold and 254 million pounds of copper at metal prices of
US$525/ounce for gold and US$1.30/pound for copper.
The project is expected to treat 4.2 million tonnes of ore per annum with a
waste to ore stripping ratio of 4.5:1. Over the 17-year mine life, average
annual production is expected at 120,000 ounces gold and 13 million pounds
of copper, with production significantly higher in the first few years of
operations.
Two banks have jointly underwritten US$61 million debt financing which will
provide part of the financing for the Varvarinskoye Project.
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