Andash Mine Update
Aurum Mining PLC
19 April 2007
For immediate release 19 April 2007
AURUM MINING PLC
('Aurum' or 'the Company')
Andash Mine Construction Update
Directorate Change
Further re Deferred Consideration
Aurum Mining plc (AIM: AUR), the gold-mining company focussed on the Former
Soviet Union, is pleased to announce that, following its recent £30 million
placing to fund the development of an open-cast mine at Andash Zone 1 in the
Kyrgyz Republic, it has recently appointed additional key members of the
operations team to lead the construction and commissioning of the mine. The
detailed design study is progressing and it is expected that construction work
will begin imminently with the production of gold and copper anticipated in
early 2008, thereby completing Aurum's transition from gold explorer to
producer.
The operational management team, comprising Operations Director Jeff Geissmann,
Financial Controller Andrew Howson, and Project Manager Norman Livingston, has
significant combined international experience in the successful delivery of
mining and other projects, including projects in the FSU, and will augment the
existing Andash Mining Company team, which has been managing Aurum's activities
in the Kyrgyz Republic.
The new team members will work with Andash Mining Company's General Director,
Oleg Kim, and Deputy General Director Erkinbek Kazakbaev, who will remain
responsible for all legal and procedural activities.
As Aurum is now in the development stage, John Webster, a Non-Executive Director
of the Company, has agreed to be contracted directly to supply consulting and
engineering services to the Company and as such he is expected to play a key
role in the construction of the Andash mine. In order to allow Mr Webster to
fulfil this role he will step down from the Board of the Company with effect
from 1 May 2007.
The proven and probable reserve at Andash Zone 1 contains gold and gold
equivalent in copper of more than 1.2 million ozs. As a result of the
significant extent of the resource, and as announced on 19 December 2006, the
maximum deferred consideration of $5 million is payable under the terms of
Aurum's acquisition in 2005 of the Andash project from Kaldora Company Limited,
whose wholly owned subsidiary Andash Mining Company holds a licence over the
Andash project. In accordance with the terms of the acquisition agreement the
consideration is being settled by the issue of 2,500,000 ordinary shares of 1p
each (the 'Ordinary Shares') in the Company at a fixed price of $2 per share
(the 'Deferred Consideration Shares') as follows:
• 1,500,000 Deferred Consideration Shares to Kantanna Company Ltd, a company
controlled by Oleg Kim, the general manager of the Andash project
• 500,000 Deferred Consideration Shares to Jake Consultants Ltd, a company
controlled by David Bryans, a consultant to Aurum
• 500,000 Deferred Consideration Shares to John Webster.
Following the allotment of the Deferred Consideration Shares, Oleg Kim and
Kantanna Company Ltd will hold 1,860,000 Ordinary Shares (representing 3.88 per
cent. of the Company's enlarged issued share capital and voting rights), David
Bryans and Jake Consultants Ltd will hold 2,870,000 Ordinary Shares
(representing 5.89 per cent. of the Company's enlarged issued share capital and
voting rights) and John Webster and Clayhill Investments Corporation (a company
controlled by John Webster) will hold 1,145,000 Ordinary Shares (representing
2.39 per cent. of the Company's enlarged issued share capital and voting
rights).
Application has been made for the admission of the Deferred Consideration Shares
to trading on AIM which is anticipated to occur on 24 April 2007. Upon
admission, the Company's enlarged issued share capital will comprise 47,967,005
Ordinary Shares with voting rights. The Company does not hold any shares in
treasury. This figure of 47,967,005 Ordinary Shares may be used by shareholders
in the Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FSA's Disclosure and
Transparency Rules.
No further deferred consideration will fall due in respect of the other
exploration Zones and areas within the Andash licence area, where significant
potential opportunities have been identified including a possible faulted
extension to Zone 1.
Mark Jones, Aurum Mining's Chief Executive Officer, said: 'After raising £30
million in equity to fully fund the Andash Zone 1 mine, one of the critical
steps to the successful delivery of the project was the appointment of an
effective operational management team. I am delighted, so soon after the
fundraising, to have appointed such an experienced extension to the team, whose
combined skills will ensure the successful delivery of the Andash mine. Initial
production at Andash is on track for early 2008, allowing Aurum to complete the
transition from explorer to producer.'
For further information:
Aurum Mining plc Tel: 020 7478 9050
Mark Jones, Chief Executive Officer
Chris Eadie, Chief Financial Officer
Arbuthnot Securities Tel: 020 7012 2000
Graham Swindells
John Toll
Buchanan Communications Tel: 020 7466 5000
Mark Court / Rebecca Skye Dietrich
Notes to editors
Aurum Mining, which joined the AIM market of the London Stock Exchange in May
2004, is a mining company focussed on gold opportunities in the Former Soviet
Union. Its principal asset is an exploration licence over the Andash gold and
copper project in the Kyrgyz Republic. A mining licence for Andash Zone 1 was
awarded by the Kyrgyz authorities in 2006. The bankable feasibility study
compiled by Wardell Armstrong International, also in 2006, confirmed a measured
and indicated resource base of 19.2 million tonnes at 1.1 grams per tonne of
gold and 0.4% copper, which equates to 1.1 million ozs of gold and gold
equivalent. Initial production at Andash Zone 1 is expected in 2008. The Andash
project also includes Zone 2 and Zone 3 along with Tokhtonysay, Nakhodka and
three other additional exploration areas.
This information is provided by RNS
The company news service from the London Stock Exchange