Update
20 Agosto 2010 - 7:32AM
UK Regulatory
TIDMTXR
RNS Number : 4135R
Titanium Resources Group Ltd
20 August 2010
Titanium Resources Group Ltd
Update
20 August 2010: Titanium Resources Group Ltd ("TRG" or "the Company") announces
a revision to the estimate of full year production volumes from its Sierra
Rutile mine, an update on the Dredge D3 project, and suspension of capital
funding to its subsidiary, Sierra Rutile Limited ("SRL"), pending discussions
with the Government of Sierra Leone ("GOSL") relating to the SRL/GOSL loan.
As noted at the AGM in June 2010, production during the first half of the year
was adversely affected by operating disruptions to Dredge D1 and the D1 wet
plant. The causes of these disruptions have been substantially corrected and
production is steadily improving. For example, July 2010 production was up 13%
over June 2010. Based on an analysis of operations however, management projects
that while SRL should meet the production target of 15,000+ tonnes of ilmenite
in the current calendar year, the steadily increasing production rate is not
sufficient to make up the production loss in rutile and zircon experienced
earlier in the year. Rutile production for the seven months to the end of July
2010 amounted to 37,164 tonnes and the production for the full year is now
expected to be in the range of 64,000 to 70,000 tonnes. This year's Zircon
production is expected to total approximately 9,100 tonnes.
The GOSL claims that SRL has failed to make certain interest payments when due
and therefore all principal and accrued interest under the GOSL Loan is
technically due. SRL disputes the claim on the basis that during and after an
agreed moratorium on loan payments, the GOSL and SRL were in discussions
regarding the GOSL Loan. SRL has paid the amount of outstanding interest
immediately requested by the GOSL and is in discussions with the GOSL regarding
the GOSL Loan. SRL has made it clear that it is ready, willing and able to make
all outstanding interest payments due if requested by the GOSL. SRL and the
GOSL have also agreed to discuss a range of matters of mutual interest. The
Company is suspending further funding into SRL pending the successful conclusion
of discussions with the GOSL.
The Company has spent approximately US$150,000 of the approximately US$20
million raised for Dredge D3. Most of the funds spent relate to design and cost
analysis to determine ways to reduce capital costs and improve operating
efficiency. As a result, the Company is further considering alternatives which
it believes may be more cost efficient to deliver the production increase.
Commenting on today's announcement, Wayne Malouf, Executive Chairman of TRG
said:
"The causes of the reduced production have been addressed and production is
steadily improving. The disagreement between SRL and the Government of Sierra
Leone is unfortunate, but based on recent interaction with the Government, I am
hopeful it can be resolved in short order. As the new Executive Chairman of TRG,
I have begun a complete review of the business with the goal of making the
changes necessary to turn the Group to profitability and maximize shareholder
value."
--Ends--
For further information
Titanium Resources Group
Wayne Malouf, Executive Chairman
John Sisay, Chief Executive
Telephone: +44 (0) 20 7321 0000
Arbuthnot Securities
Nominated Adviser & Broker
Richard Johnson / Hugh Field
Telephone: +44 (0) 20 7012 2000
Aura Financial
Michael Oke / Andy Mills
Telephone: +44 (0) 20 7321 0000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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