TIDMMIO
RNS Number : 2594C
Minco PLC
12 April 2017
Minco Plc - Audited Financial Results 2016
Dublin, 12 April 2017 - Minco Plc (AIM-"MIO") (the "Company"),
is pleased to announce that its Audited Financial Statements and
Management's Discussion and Analysis for the year ended 31 December
2016 have been published and filed on SEDAR and will be posted to
shareholders.
Copies of these documents are available on the Company's website
www.mincoplc.com or under the Company's profile on SEDAR at
www.sedar.com and will also be available on request for one month
from 12 April, 2017, free of charge, from the Company's registered
office at 27 Lower Hatch Street, Dublin 2, Ireland.
In his Chairman's Letter to Shareholders, John F. Kearney
Chairman & Chief Executive, said:
"Sale of Curraghinalt Royalty
On 21 March, 2017, Minco announced that it is in discussions
with Dalradian Resources Inc. regarding the possible disposal of
its 2% net smelter return royalty on the Curraghinalt gold deposit
(the "Royalty Disposal") in return for the issue of a total of
15,490,666 new Dalradian Shares valued at C$20,000,000, in total,
based on the volume weighted average price of Dalradian shares on
the Toronto Stock Exchange for the five trading day period ending
on the day prior to 21 March, 2017.
It is proposed that the Royalty Disposal would be structured as
an offer by Dalradian for the acquisition of the entire issued
share capital of Minco (the "Possible Offer"). It is intended that
the Possible Offer would be implemented by means of a scheme of
arrangement, under Section 450 of the Companies Act 2014 of Ireland
("Scheme"). As part of the Scheme, it is proposed that Minco would
undertake a demerger of its wholly owned subsidiary Buchans
Resources Limited ("Buchans"), a wholly owned subsidiary of Minco,
by way of a transfer in specie of the shares of Buchans to Minco
Shareholders (the "Demerger").
Following the Demerger Minco shareholders would be issued
11,618,000 new Dalradian Shares which would represent 75% of the
total shares to be issued by Dalradian in connection with the
Royalty Disposal. The balance of 3,872,666 new Dalradian Shares,
being 25% of the total, would be issued directly to Buchans, which
would then be wholly owned by Minco Shareholders.
FINANCIAL RESULTS 2016
For the year ended 31 December, 2016, Minco recorded a loss of
US$775,000 compared to a loss of US$118,000 for the same period
ended 31 December, 2015. The loss for the year ended 31 December,
2016 included an income tax expense of US$87,000, and a foreign
exchange gain of US$16,000, compared to a foreign exchange gain of
US$648,000 for the same period ended 31 December, 2015.
During the year ended 31 December, 2016 Minco invested
US$831,000 on exploration of its mineral properties, of which the
largest amounts were expended on the Buchans zinc lead project in
central Newfoundland.
At 31 December, 2016, Minco held US$2,351,000 (2015-
US$3,974,000) in cash and cash equivalents and had a working
capital surplus of US$1,935,000, compared to a working capital
surplus of US$3,628,000 at 31 December, 2015.
CENTRAL NEWFOUNDLAND BASE METAL PROJECTS - METALLURGICAL
STUDIES
During 2016, Minco, through its wholly owned subsidiary Buchans
Minerals Corporation ("Buchans Minerals), in a collaboration
agreement with Canadian Zinc Corporation (TSX:CZN), successfully
completed a research programme to evaluate the metallurgical
characteristics of their respective volcanogenic massive sulphide
("VMS") Zn-Pb-Cu-Ag-Au base metal deposits in central Newfoundland
.
The metallurgical research study demonstrated that the ore from
Minco's Lundberg, Daniels Pond and Bobbys Pond deposits can be
successfully processed in a central mill using a sequential
flotation flowsheet, and that selective zinc, lead and copper
concentrates at marketable grades can be produced from these
deposits.
The economic assessment portion of the program applied a
conceptual assessment to evaluate and identify the key factors
impacting the operating economics of centralized processing for the
production of the base metal concentrates. The economic assessment
completed various scenarios that considered three possible
processing locations, the possible benefits of dense media
separation ("DMS") and three alternative tonnage throughput rates
for the processing facility.
Multiple conceptual economic scenarios at three potential sites
were developed to simulate the proposed centralized milling
concept. The variables assessed included the different potential
mill sites, with or without DMS, new or used process equipment,
mining rate, and processing feedstock composition for each deposit.
Lundberg, being the largest but lowest grade deposit, was
considered the main plant feed and Lemarchant, Boomerang, Daniels
Pond and Bobbys Pond were treated as satellite deposits.
The positive results of the research project provide valuable
direction to guide future exploration on Minco's central
Newfoundland volcanogenic massive sulphide Zn-Pb-Cu-Ag-Au base
metal deposits and the conceptual economic modelling provided key
information on which to focus future economic studies and
development plans for advancing the development of the Lundberg and
satellite deposits using a central milling facility.
BUCHANS BASE METAL EXPLORATION - NEWFOUNDLAND
During 2016, Minco focussed its exploration efforts near the
former Lucky Strike mine to explore for high-grade resources that
may positively impact open pit and underground development of the
Company's Lundberg deposit.
In 2015, Minco initiated a program of relogging of historic
archived drill cores to assess potential for discovery of
additional high-grade resources near the Lundberg deposit. This
program is ongoing and to date has relogged 319 surface and
underground drill holes totaling 51,137 metres of archived drill
core previously drilled within 2 kilometres of the former Lucky
Strike mine, and a further 49,100 metres in 141 holes from other
prospects located less than 4 kilometres from the Lundberg deposit.
Several target areas have been identified and will be considered
for possible drill testing in 2017.
LAKE DOUGLAS GOLD, NEWFOUNDLAND
In October of 2016, Minco, through its wholly-owned subsidiary,
Buchans Minerals Corporation, competitively staked 2,075 hectares
in central Newfoundland, known as the Lake Douglas project.
Minco's property covers a 3.5 km segment of the prospective
trend that is located northeast, along strike of Marathon Gold
Corporation's (MOZ.TO) Valentine Lake project where Marathon has
announced a Measured and Indicated mineral resource estimate of
21.8 million tonnes at an averaged grade of 1.84 grams of gold per
tonne containing 1,292,800 ounces of gold and an Inferred mineral
resource of 8.8 million tonnes of at an averaged grade of 1.98
grams of gold per tonne containing 562,600 ounces of gold (Marathon
press release dated February 21, 2017) as a potential open pit
resource development.
LEAD-ZINC EXPLORATION, MOATE, COUNTY WESTMEATH, IRELAND
In November 2015 Minco was granted three new Prospecting
Licences PLs 1228, 1229 and 3981, at Moate in County Westmeath,
centered on a specific geological target identified by Minco, with
potential for zinc-lead mineralisation of Tynagh Mine type.
Minco's 2016-2017 drill programme at Moate consisted of 13 holes
completed between September 2016 and January 2017 for a total of
1299 metres. Drilling was concentrated in two areas centred on the
townlands of Knockanea-Fardrum (Pl 1229) and Tully (Pl 1228). 942
metres were drilled on Pl 1229 and 357 metres on Pl 1228.
Minco's drilling programme initially focused within PL 1229 on
the southwestern three kilometers of the target area, adjacent the
ENE striking Moyvoughly Fault where five holes (1229-35 to 1229-39)
were drilled for a total of 700 metres. Reef-derived breccias
comparable to those at Tynagh were intersected confirming the
geological model, and in Holes 1229-38, 39 and 40 the breccias
contain widespread trace amounts of disseminated sphalerite.
The 2016-2017 drill programme at Moate has confirmed the
geological model and enhanced exploration potential. A second phase
of drilling (13 holes for a total of 2600 metres) has been
recommended to explore these targets in 2017.
ZINC EXPLORATION - NAVAN, MEATH, IRELAND - JOINT VENTURE WITH
TARA BOLIDEN
Minco, through its wholly owned subsidiary Westland Exploration
Ltd, holds a 20% interest in Prospecting Licence 1440R (Tatestown),
which is being explored under a Joint Venture agreement with
Boliden Tara Mines Limited (80%), and which hosts part of the
Tatestown-Scallanstown zinc lead mineral deposit.
During 2016, Tara Boliden, Operator of the JV, completed an
infill drilling programme of four drill holes between and
peripheral to existing resource blocks on Pl 1440R. Potentially
economic grades and widths were intersected in all four of these
holes. The drilling confirms the continuity of the resource and the
widespread nature of mineralisation in this area. A continuation of
the infill-step out drilling is proposed by Boliden Tara for 2017
with an additional four or six holes planned.
At the adjacent Tara Mine, which is one of the larger zinc mines
in the world, successful exploration by Boliden has recently
identified new mineralisation, Tara Deep, and Boliden has decided
to launch a programme to extend the life-of-mine. Boliden reported
in January 2017 that the new Tara Deep deposit has inferred mineral
resources totalling 10 Million tonnes with a zinc grade of 8.5% and
a lead grade of 1.8%. The mineralisation resembles Tara's main ore
body, but has a more complicated structure and is at a greater
depth of between 1,200 and 1,900 metres.
MINERAL EXPLORATION AT NORTHERN PENNINES, ENGLAND
Minco plans to resume exploration in the Northern Pennines where
it is negotiating extensions or amendments to certain of the
exploration licences and option agreements and expects to conclude
acceptable option agreements in due course.
Minco's 2012-2015 drill programme in the Nenthead area, the most
productive and zinc rich area within the Northern Pennine Orefield,
has established a significant stratiform component to the
mineralisation within the Great Limestone which had not been
previously recognised. In total fifteen kilometres of mineralised
structures have been outlined by previous mining with at least five
kilometres of this considered to have comparable potential for
straiform mineralisation. Minco believes that, in the areas
drilled, previous lead mining only extracted approximately 20% of
the total mineralisation believed to be present.
XTIERRA INC.
Minco holds approximately 30 million shares in Xtierra Inc.
("Xtierra"), a company listed on the TSX Venture Exchange under the
symbol "XAG", representing an approximate 26% interest.
Xtierra holds mineral properties located in the State of
Zacatecas in the Central Mineral Belt of Mexico. The Bilbao Project
is a polymetallic sulphide and oxide replacement
silver-lead-zinc-copper deposit located approximately 500km
northwest of Mexico City in the southeastern part of the State of
Zacatecas. Xtierra also holds an extraction licence for the
silver-rich La Laguna tailings deposit located near the city of
Zacatecas in Mexico.
METAL PRICES
Metal prices impact Minco's ability to finance the exploration
and development of the Company's various lead-zinc properties. In
2016, base metal prices posted strong gains, driven by resilience
in the global economy, investment speculation, supply disruptions
and inventory depletion.
Zinc was one of the strongest performing metals throughout 2016
and into 2017, rising from the US$0.70 per pound level at the end
of 2015 to a high of US$1.30 per pound in the first part of 2017.
Lead also performed well in 2016, rising from US$0.75 per pound at
the end of 2015 to US$0.95 per pound during the third quarter and
continuing to stay in the US$0.90 to US$1.12 per pound range into
early 2017, despite gradually increasing inventories for most of
the year.
The broad trend of improving commodity prices is prevailing and
to date in 2017 both base metals and precious metals are continuing
on an upward trend."
******************************
ABOUT MINCO PLC
Minco Plc, incorporated in the Republic of Ireland and listed on
the AIM Market of the London Stock Exchange ("MIO"), is an
exploration and development company currently engaged in zinc-lead
exploration in Canada, the United Kingdom and Ireland, and is also
evaluating its Woodstock manganese project in New Brunswick,
Canada.
Minco also holds an approximate 26% shareholding in Xtierra Inc.
(TSXV- "XAG"), which holds mineral properties in Mexico, and a 2%
NSR royalty on the Curraghinalt gold property in Northern Ireland,
currently being explored by Dalradian Resources Inc.
(TSX-"DNA").
For further information contact:
John F. Kearney: Chairman +1 416 362 6686
Danesh Varma: CFO & Company Secretary +44 (0) 8452 606
034
Peter McParland: Director - Ireland +353 (0) 46 907 3709
John Frain: Davy (NOMAD) +353 (0)1 6796363
Saif Janjua: (Corporate Advisor) (Broker, Beaufort Securities) +44 (0) 20 7382 8415
Website: www.mincoplc.com
Cautionary Statement - Forward-Looking Information
This news release contains certain forward-looking information,
including, among other things, the expected exploration of mineral
properties. This forward looking information includes, or may be
based upon, estimates, forecasts, and statements as to management's
expectations with respect to, among other things, the timing of
exploration, development and mining activities, the size and
quality of mineral resources, progress in development of mineral
properties, demand and market outlook for metals, future metal
prices and treatment and refining charges, future trends for the
company, and the financial results of the company. Mineral
exploration and development is a speculative business including,
among other risks, the failure to discover mineral deposits but
also from finding mineral deposits that, though present, are
insufficient in quantity and quality to return a profit from
development and production. There can be no assurances that such
statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
statements. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. Inferred mineral resources
are considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as mineral reserves. There is no certainty that mineral
resources will be converted into mineral reserves.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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