Access Road Update

RNS Number : 0248P

Amur Minerals Corporation

14 November 2016

 

14 November 2016

AMUR MINERALS CORPORATION

(AIM: AMC)

Access Road Update

Amur Minerals Corporation ("Amur" or the "Company"), developer of the Far East Russian sulphide nickel copper project Kun-Manie, is pleased to provide an update on its access road activities completed during the 2016 field season.

Key highlights:

·     A Category IV industrial gravel road of eight metres width capable of handling the transport of concentrate and supplies to and from the site can be constructed and its route has been identified. 

·     The road is planned to be 316 kilometres in length.  Construction materials required to build the road are available along its entire length.

·     Five major bridges will be required with an estimated 200 stream and drainage crossings having also been identified.  The stream and drainage areas will require the installation of culverts and / or water diversions.

·     The western portion of the road (180 kilometres) will be constructed along existing, though narrow, roads pioneered by placer mining companies.  The placer mines are no longer in operation.  Limited timber production does exist in the area.  The terrain in the area is flat to hilly in character and limited infrastructure is present.

·     The eastern 136 kilometres will be constructed in the mountainous terrain of the Stanovoy Range.  No infrastructure along this section of the route is present.

·     Permafrost conditions vary along the route and will need to be considered in the detailed design of the road.

·     The next stage consists of the compilation of topographic maps along the road route to allow for detailed road design and the specific identification of the initial road location.  Results are anticipated in Q1 2017.

Based on a field inspection by a qualified road design engineer, three alternative routes from the Company's Ulak base (also referred to as Gorny), located on the Baikal Amur rail line to the Kun-Manie project site, were examined to identify the preferred route along which to construct its access road.  The selection considered the availability of necessary road construction materials as well as stream / river crossing requirements.  The inspection programme has now identified the preferred access, which has been determined to be 316 kilometres in length.  Completion of this phase now allows the Company to initiate the next stage of road design comprised of the development of surface topographic maps for use in route selection, road design and construction planning.

As the road is an integral part of the project and is related to infrastructure development, the Far East and Baikal Region Fund ("FEDF") has assisted by providing additional cost related information of similar road building projects.  The average cost per kilometre for the five projects provided is indicated to average US$400,000 per kilometre.  This is substantially less than the Company's budgeted US$ 1,000,000 per kilometre.  Without specific and detailed road design, the precise savings per kilometre cannot be specifically established.  However, Amur does anticipate a reduction in this capital cost category with a significant portion of the decrease related to the devaluation of the Russian Rouble RUB since the compilation of the original estimate when the RUB was 30 to the USD.  Presently, the RUB to USD exchange rate is ranging from 60 to 65 RUB per USD.

Description of the Access Road

The 316 kilometre long access road traverses two distinct geographic terrains.  To be constructed as a Category IV road intended for industrial use only, it will be surfaced with a combination of sand and gravel.  It is expected that up to 600,000 tonnes of concentrate will be delivered over the road from Kun-Manie to Ulak with a near equivalent tonnage of fuel, supplies and materials being backhauled to the site.

The western half of the access road (from Ulak to the Zeya River) is anticipated to be the most favourable for construction.  The 180 kilometre long stretch already has a narrow road which must be substantially upgraded to meet production requirements.  Limited infrastructure associated with dormant placer mining operations and existing fuel storage sites related to ongoing exploration activities by other exploration groups and timber harvesting companies is present.  Approximately half of this portion of the route is characterised by flat marshy ground with the remainder being classified as hilly.  Most of this 180 kilometre segment is accessible by heavy duty wheeled vehicles.  Sufficient road construction materials are available.  The Tok and Sivakan Rivers will each require the design and construction of a large bridge and numerous stream crossings will also be necessary. 

The remainder of the access road (136 kilometres), from the Zeya River to the Kun-Manie project site will run through the mountainous terrain of the Stanovoy Range.  Major bridge construction will be required at the Zeya, Kupuri and Maya Rivers.  These rivers are prone to rapid changes in water levels related to substantial runoff during rain and spring snow melts.  As a result, the design of the bridges and siting of the road will require consideration of the fluctuation of water levels.  Construction materials are available along the entire portion of this route and will be derived from barrow pits and river gravels.

Next Stages of Work on the Access Road

Topographic maps of the 316 kilometre long by 4 kilometre wide road corridor are being compiled.  Upon completion of this task, road profiles will be generated allowing for initial route selection.  Field verification of the initial route will be completed and adjustments will be undertaken as required.  Upon completion of the identification of the final route, the detailed design of the road can be undertaken which will include field work consisting of the following key tasks:

·     Implementation of a geotechnical and soil stability drilling programme to define the stability of the road bed base (an 8 to 10 metre deep hole at one kilometre spacings along the road), two 15 metre deep holes at each bridge location), and approximately 200 eight metre deep holes where culverts are planned for installation at stream and drainage crossings.

·     Survey of permafrost conditions along the route.

·     Completion of the laboratory test work related to soil and geotechnical stability analyses as well as water quality analyses.

Far East and Baikal Region Fund

The Far East initiatives intended to advance the development of the region include governmental support through a series of agencies including the FEDF.  These especially focus on infrastructure development.  As the road is an integral part of the project and is considered to be a part of the initiative, FEDF has provided additional cost related information of similar road building projects.  The average cost per kilometre for the five projects indicates a cost of US$400,000 per kilometre can be expected. 

This is substantially less than the Company's budgeted US$1,000.000 per kilometre.  The primary reason for the substantial difference is related to the devaluation of the RUB.  The US$1,000,000 per kilometre was determined based on a 30 RUB per USD.  Currently, the exchange rate ranges from 60 to 65 RUB per USD.  The decline in the RUB in comparison to the USD indicates that substantial savings are anticipated once specific and detailed road designs are completed and new capital costs are compiled.

Robin Young, CEO of Amur Minerals, commented:

"With pleasure, we present our first access road update.  We have now identified our preferred route from the rail station at Ulak to our Kun-Manie nickel copper sulphide project.  With this significant step now complete, we are moving onto the generation of topographic maps which will enable us to precisely select the route of the road and to compile the first design.  After we verify the designed route, we will be able to undertake necessary design adjustments to account for any special considerations and conditions along the route.  Subsequently, the capital cost of this critical component can be finalised.  We anticipate a reduction in the cost to construct a kilometre of the access road over that which has been used in the past to evaluate our project economics."

Company Amur Minerals Corp.	Nomad and Broker S.P. Angel Corporate Finance LLP	Public Relations Yellow Jersey
Robin Young CEO	Ewan Leggat Laura Harrison	Dominic Barretto Harriet Jackson
[phone]	[phone]	[phone]

For additional information, visit the Company's website, www.amurminerals.com.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Notes to Editors

For further information, see the Company website at www.amurminerals.com.

 

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