Minto Operations Update Q4 and Capstone Liability

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

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:   [phone]

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

David James, Chief Financial Officer

Brandon Hill Capital - United Kingdom:   [phone]

Jonathan Evans

 

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