Amur Minerals Cuts Kun-Manie Study Costs Amid Funding Shortfall

LONDON (Alliance News) - Amur Minerals Corp said Monday it booked a widened loss in 2016, as a ...

Alliance News 19 June, 2017 | 1:06PM
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LONDON (Alliance News) - Amur Minerals Corp said Monday it booked a widened loss in 2016, as a funding shortfall forced costs to be cut from its mine development plans.

The Russia-focused nickel developer booked a pretax loss of USD5.7 million in 2016, widened sharply from a USD706,000 loss in 2015.

Amur currently generates no revenue, and its widened loss was driven by a swing in the fair value of financial derivatives, to a USD2.0 million loss from a USD1.2 million gain the prior year.

The company is developing its wholly-owned Kun-Manie nickel copper sulphide deposit in the far east of Russia, and is working on completion of a definitive feasibility study to be completed at the beginning of 2018.

Amur said Monday that drilling during 2016 increased its measured and indicated nickel equivalent tonnage at the deposit to 836,300 tonnes from 383,200 tonnes, with an increase in average nickel equivalent grade to 1.03% from 0.72%.

Amur is now undertaking drilling focusing on upgrading inferred resources to indicated, to be included in its mining ore reserve at the site. The company said its currently sees potential for definition an mining ore reserve with a production rate of 6.0 million tonnes of ore per year, over a production period of between 10 and 13 years.

However, the company also said it has a shortfall of around GBP7.8 million for the completion of its definitive feasibility study, hit by the devaluation of sterling and discontinuation of part of a planned share placing.

Therefore, the company is currently in the middle of cutting costs within the plan, and said it is working to identify aspects of the study which are "not as critical" to determining the economic viability of the project.

As at the end of 2016, Amur had cash reserves of USD8.2 million, down from USD9.6 million at the end of 2015. The company saw an operating activity cash outflow of USD2.2 million and an investing cash outflow of USD4.5 million during the year.

"We have identified the presence of much higher grades available to mining, substantially increased our measured and Indicated resource, confirmed that our future mining ore reserve will likely be substantially higher in grade than previously planned, that our mining ore reserves will likely be of sufficient size and grade to allow for project financing and begun to establish key metallurgical results for the treatment and eventual sale of concentrate and or low grade matte for the Kun-Manie ores," said Chairman Robert Schafer.

"These are all important achievements allowing for the continued advancing of the project toward a final project design and decision to initiate production. Our aggressive plan to advance the project has already shown substantial and multiple benefits and we shall continue to proceed with our first quarter of 2016 programme," added Schafer.

Shares in Amur Minerals were down 9.1% at 6.00 pence Monday.

By Adam Clark; adamclark@alliancenews.com

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Amur Minerals Corp 7.75 GBX -1.90 -
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