- Commissioning Progress: Steady progress; optimisation and milling issues being resolved
- Expansion Studies Initiated: planning to assess plant capacity increase in conjunction with resource update
- $4.6m recovered in successful litigation to recover expropriated funds
- Short delay in filing of annual financial statements, MD&A and AIF and restatement of quarterly financial statements
LONDON, ENGLAND--(Marketwire - March 31, 2008) - European Minerals Corporation (TSX:EPM)(AIM:EUM) -
European Minerals Corporation ("EMC" or the "Company") is pleased to report that steady progress is being made on the commissioning of the processing plant at its Varvarinskoye gold/copper project in Kazakhstan.
Metallurgical performance in the plant is good, with metal recoveries in the gold leach circuit and the copper/gold flotation circuit in line with design parameters. The gold elution, electro-winning and gold smelting systems are working well and gold is being poured on a regular basis. Three gold shipments have been delivered to the Metalor refinery in Switzerland.
The copper-gold flotation circuit is also operational and copper-gold concentrate is being produced. The Company expects to sell its first copper/gold concentrate during April 2008.
The commissioning process is however progressing slower than previously anticipated by the Company. The ramp up to commercial production is now planned to be achieved by the end of Q3 2008. Issues which are currently constraining a more rapid ramp up include:
- Optimising the crusher to achieve the design crush product.
- Replacing electric motors on the mill discharge pumps. The motors appear to have been undersized at the design stage and the supplier is co-operating with the Company to rectify this and achieve design capacity.
- Achieving design tonnage through the high-grade copper ball mill is proving more difficult than anticipated and the manufacturer continues to advise the Company to attain full design throughput capacity.
- A minor fire in the high grade mill cyclone cluster, the damage to which has been repaired.
- Unusually bad weather in late February and March disrupted operations at site.
Bert Kennedy, President and CEO commented today:
"Despite winter temperatures which reached -38 degrees centigrade our commissioning team are making steady progress. We were pleased to pour gold before the end of 2007 and are now focussing on building up daily tonnage. The commissioning of a large process plant such as Varvarinskoye, always has unexpected challenges, such as noted above. However, three of our four grinding mills are working well and as tonnage throughput builds, we will continue to identify and modify design features to reach design throughput. Although disappointed by the slower than anticipated progress, we are generally satisfied with the winter commissioning and, if possible, intend to accelerate the ramp up. The Company will initiate reporting of further details regarding production and sales on a quarterly basis, commencing at end of Q2 2008, when commissioning is more advanced."
The Company has appointed an independent engineering company to undertake a scoping study to engineer the expansion of the plant throughput beyond the currently planned 4.2 million tonnes of ore per annum. The Company will report further details in due course.
Bert Kennedy commented as follows:
"The Company is currently completing an internal update of estimated mineral resources at Varvarinskoye, the results of which are expected to result in an increase to resource estimates and will be announced shortly. This makes the announcement of our expansion scoping study very timely as it gives us confidence that the Company will be able to benefit further from the strong prices for gold and copper".
The Company is pleased to announce that on March 28, 2008 The Supreme Court of Appeal of South Africa issued judgment in favour of the Company in relation to its action to recover ZAR 28 million (approximately USD 3.5 million) of monies advanced to a former contractor and expropriated by ABSA Bank Limited of South Africa. In addition the Company has been awarded interest from December 2005, of approximately ZAR 10 million (approximately USD 1.1 million) and costs which are yet to be determined.
Late Filing of Annual Financial Statements, MD&A and AIF
The Company also announces that, as a result of increased time needed to complete its annual consolidated financial statements and related audit, there will be a short delay in the filing of the annual consolidated financial statements, management discussion and analysis ("MD&A") and annual information form ("AIF") for the Company's financial year ended December 31, 2007 as required by Canadian National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102").
The delay is caused by having to incorporate the financial implications of the successful litigation resolved on 28 March 2008 referred to above, as well as unexpected difficulties encountered in finalizing inter-group reporting from the Company's Kazakhstan operation. Additionally, the Company is reviewing its accounting for derivatives to ensure compliance with CICA Handbook Sections 3855 and 3865. It is anticipated this review will result in a restatement of the Company's interim financial statements for Q1, Q2 and Q3 of 2007. The Company is working with its auditors to complete the audit of its annual consolidated financial statements for the year ended December 31, 2007 as expeditiously as possible. Management of the Company expects this to be completed by April 14, 2008.
Pending the filing of its annual audited consolidated financial statements, MD&A and AIF, as well as the Company's restated interim financial statements and related MD&A for Q1, Q2 and Q3 of 2007, the Company intends to satisfy the alternative information guidelines recommended by Ontario Securities Commission Policy 57-603 and Canadian Securities Administrators Staff Notice 57-301 ("CSA Staff Notice 57-301"), including the provisions of Appendix B (Default Status Reports) of CSA Staff Notice 57-301. If the annual audited consolidated financial statements, MD&A, AIF, restated interim financial statements and related MD&A are not filed by May 31, 2008, applicable securities commissions or regulators may impose a cease trade order. A cease trade order may be imposed sooner if the Company fails to file its Default Status Reports on time. The Company is not subject to any insolvency proceeding and there is no other material information concerning the affairs of the Company that has not been generally disclosed.
This news release contains forward-looking information which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance 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, estimates and/or plans in respect of timing of commencement of operations, development and operational plans and objectives (including the ability to expand the plant throughput), timing of completion of the annual audit, the filing of the Company's annual audited financial statements, MD&A and AIF and the filing of the Company's restated interim financial statements and related MD&A, potential additional resources, and the Company's objectives, goals or future plans. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, delays in the development of, and the commencement of operations at, the Company's Varvarinskoye Project caused by unavailability of equipment, labour or supplies, climatic conditions, delays in the delivery and installation of plant and equipment or otherwise and other factors and those risks set out in the Company's public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Investor Information: United Kingdom
European Minerals Corporation
+44 (0) 20 7529 7508
European Minerals Corporation
President & CEO
+44 (0) 20 7529 7508
Mike Jones/Robin Birchall
+44 (0) 20 7050 6500
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