MIR Mining Inv Re

TIDMMIR

RNS Number : 0065Y

Mining Investments Resources PLC

20 January 2014

Mining Investments Resources plc

Primorsky Silver Mine Rehabilitation Project

Mining Investments Resources plc ("MIR" or the "Company") is pleased to announce that it has entered into a preliminary agreement (the "Agreement") which provides it with a legally binding option to invest in a project to rehabilitate the Taezhny Silver Mine in the Primorsky region of Russia. MIR believes that the Taezhny mine provides an opportunity to place a high grade silver deposit with potentially re-treatable tailings back into production as the processing facilities and infrastructure are largely in place. The Agreement is the culmination of a lengthy period of due diligence and negotiation following the signing of a letter of intent which was announced on 13 March 2013.

The Agreement enables MIR to conduct further due diligence and reduce risk by undertaking additional metallurgical testing and sampling of the existing tailings at the mine (the "Tests"), at an estimated cost of around US$100,000, prior to committing to the project rehabilitation (the "Main Transaction"). If the results of the Tests are positive then it is envisaged that MIR will proceed with the Main Transaction, subject to raising the necessary funds. The Main Transaction involves MIR investing up to US$10 million in consideration for a controlling shareholding of 60 per cent. of a new holding company ("HoldCo") that will own the project. The remaining 40 per cent. of HoldCo will be owned by Ruspacific Group LLC ("Ruspacific"), the current majority owner of the Taezhny mine.

The Agreement also provides the option for Ruspacific to exchange its 40 per cent. interest in HoldCo for shares in MIR issued at the price at which MIR raises finance for the project, such shareholding not to exceed 29.9 per cent. of MIR's enlarged share capital.

Suspension of Trading on AIM

Pursuant to AIM Rule 14, the Main Transaction, if completed, would constitute a reverse takeover and therefore the Company has requested that its shares be suspended from trading on AIM pending an admission document being posted to shareholders or the Company deciding not to progress with the Main Transaction. The suspension is expected to be effective from 7.30am today. The Tests are expected to take around three months.

Further information on the Taezhny silver project

The Directors of MIR believe that in the current silver price environment the key factor to project economics is high grade. They further consider that it is attractive for MIR to enter into the Taezhny project because it offers the potential to rehabilitate and improve a small high grade mine which can be placed back into production combined with attractive exploration potential to prove up additional resources.

The Taezhny Silver Mine was in production during Soviet times using a simple flotation recovery process which provided a concentrate for smelting. Technical scoping studies undertaken by Saint Barbara LLP ("Saint Barbara") on behalf of MIR have concluded that, subject to confirmatory sampling and metallurgical testing under the Tests, the mined ore and associated tailings can be recovered by modifying the existing plant in the following manner:

(a) The addition of a gravity circuit to increase recoveries of silver from mining and to reprocess the tailings.

(b) The addition of a cyanide circuit to process the silver concentrate and replace the necessity of smelting.

The remaining C1 resources at Taezhny, which have been reviewed by Saint Barbara, are estimated at 206,000 tonnes at 628 g/t silver and the C2 resources are estimated at 537,000 tonnes at around 300 g/t silver. The mine also has tailings from the previous production which have been estimated at between 415,000t to 500,000t grading 68 to 132 g/t. These estimates do not conform to the criteria of resource estimates and the tailings require surveying and metallurgical testing.

The Taezhny mine was the first producing silver mine of the Primorsky silver belt and is accompanied by three exploration licences which include exploration potential identified by various Russian geological studies as follows:

An adjacent area is estimated to have potential (C2 and P1 resources) for 1.7 million tonnes at 220 g/t, a portion of which is believed to have open pit potential.

An exploration licence over 12 kilometers of vein system, which is partly explored by trenching and five drill holes and has estimated potential P1 resources of 1 million tonnes at 354 g/t of silver and 1.5 g/t of gold.

The third licence is less explored but has grab samples up to 3,920 g/t of silver and 7.9 g/t of gold.

Michael Nosworthy, Chairman of MIR, commented: "We are very pleased to have concluded the Agreement, following lengthy negotiations. The Taezhny project has the potential for near term production and revenue and is in line with our strategy to identify and invest in mining assets in Far East Russia."

 
                        Mining Investments 
Michael Nosworthy        Resources plc              +33 675657274 
 
                        Mining Investments 
Steve Roberts            Resources plc                07812043436 
 
 
                        Northland Capital 
Luke Cairns / Matthew    Partners Limited                020 7796 
 Johnson                 (Nomad and Joint Broker)            8800 
 
                        Peterhouse Corporate 
John Levinson /          Finance Limited                 020 7469 
 Lucy Williams           (Joint Broker)                      0930 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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