/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
ASX & POMSoX: MMC
TORONTO, Feb. 6, 2013 /CNW/ -
Fixed Engineering, Procurement & Construction (EPC) pricing, for
processing facilities, mine infrastructure and port facilities of
US$1.42 billion received from China's NFC, to form part of pending
Feasibility Study (FS).
Ongoing pending Feasibility Study optimisation work results in a
decision to potentially increase the initial processing rate at Yandera
EPC pricing based on the anticipated increased processing rate, with
CAPEX remaining below the Company's guidance.
Letter of Intent for project financing provided to NFC by a leading
Chinese state bank, with the facility expected to be for 70 per cent of
the total CAPEX, subject to pending FS.
Review of the Feasibility Study continuing, with the study due for
completion in March 2013.
Marengo's major shareholder, The Sentient Group, will provide an interim
US$10M working capital facility whilst Feasibility Study optimisation
Marengo Mining Limited (TSX: MRN, ASX/POMSoX: MMC) is pleased to
announce that it has received pricing for a fixed lump sum, turnkey,
Engineering, Procurement and Construction (EPC) contract for
development of its Yandera Copper-Molybdenum-Gold Project in Madang
Province, Papua New Guinea from major Chinese engineering, construction
and mining Company, China Nonferrous Metal Industry's Foreign
Engineering and Construction Co Ltd (NFC).
The EPC pricing provides a strong foundation for the completion and
delivery of the Yandera Feasibility Study, which is scheduled for
completion in March 2013. As previously advised, NFC has prepared its
EPC pricing by working in parallel with the Feasibility Study team as
part of the overall development strategy at Yandera.
Even with the potential increased throughput, the development CAPEX
numbers have remained just below the Company's prior guidance:
Fixed EPC pricing, subject to contract
completion, to include complete processing
facilities, crushing, grinding, mine
infrastructure, administration facilities,
access road, concentrate pipeline, filter plant,
port site, ship-loader and tailings dam
Other infrastructure, including mining fleet, pre-strip and power
transmission line, subject to the completion of the pending Feasibility
Study, is currently estimated in the range of US$300M - US$400M for a
total project CAPEX in the range of US$1.7-$1.85 billion.
These CAPEX estimates do not include owner's costs, working capital,
capitalised operating costs and third party power supply, all of which
will be included in the development costs in the pending FS.
The President of NFC, Mr Wang Hongqian, commented: "Marengo's Yandera
project is a high priority for NFC. We remain fully supportive of
Marengo as it advances the development of the project".
A Letter of Intent for project financing has been provided to NFC by a
leading Chinese state bank. Marengo expects that, when completed, the
facility is estimated to be for approximately 70 per cent of the total
development capital of the project, subject to completion of pending
Marengo's President & CEO, Mr Les Emery said "For a company at Marengo's
stage to have received a fixed price EPC quote from such a respected,
major Chinese engineering, construction and mining company is a huge
achievement and a recognition of the value inherent in the Yandera
With the EPC pricing now provided by NFC, Marengo will include this in
the Feasibility Study, which is expected to be completed in March 2013.
Negotiations between Marengo and NFC on the EPC contract have now
FEASIBILITY STUDY UPDATE
A final review of the Yandera Feasibility Study has been underway since
Extensive work has been completed to date as part of the Yandera
Feasibility Study, which is being prepared by Mining One, Ravensgate
Mining Industry Consultants and Arccon Mining Services, together with
other respected Australian and international consultancies.
Some of the recent highlights from the pending Feasibility Study
a decision to increase the anticipated mine throughput rate to 30Mtpa;
very good metallurgical recoveries and concentrate grades;
further optimization work in mine planning, pit design and tailings
management, particularly in light of the increase in throughput.
Further to the decision to potentially increase the plant processing
rate to 30Mtpa, as part of the optimization of the proposed Feasibility
Study, Marengo is pleased to report that the ongoing metallurgical
testwork program continues to confirm the high copper recoveries and
grades achieved in the 2012 program.
Copper recoveries from hypogene / fresh samples, taken from three main
zones of the Yandera deposit vary from 85-95% with copper concentrate
grades varying from 25-40% for copper, with gold, silver and molybdenum
recoveries at economic levels.
Optimization work performed early in 2013 on Gremi and Imbruminda zone
bulk samples are showing outstanding recoveries, with the Gremi bulk
adit sample achieving a copper recovery of 95.8% and a final
concentrate grade of 40% copper, with recoverable molybdenum, gold and
silver, in the lock cycle tests, performed at ALS Ammtec's Perth
Test work performed on Imbruminda samples reported copper recovery of
94% and a final concentrate grade of 41% copper, in the lock cycle
tests. Good molybdenum, gold and silver recovery was demonstrated in
this test as well.
The results from the test program are important in that Gremi and
Imbruminda are expected to supply the first decade of production to the
process plant. A revised mining plan will be completed for the 30Mtpa
option, as part of the completion of the Feasibility study.
Commenting on the progress of the Feasibility Study, Marengo's Chief
Operating Officer, Mr Paul Korpi, said: "The upcoming completion of the
pending FS is the culmination of a significant effort by all of the
Yandera team members and our consultants. Marengo looks forward to
continuing to work with NFC, the PNG National Government, the Madang
Provincial Government and our local Yandera community."
Given the extensive nature of the review being undertaken of the
Feasibility Study and the additional optimisation opportunities
currently being considered, Marengo's major shareholder, Sentient, will
provide an unsecured, interest-bearing working capital facility of
US$10 million, repayable on or before 31 December 2013.
6 February 2013
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any ordinary shares within the United
States. The ordinary shares have not been offered and will not be
registered under the United States Securities Act of 1933, as amended
(the "1933 Act"), or any state securities laws. Accordingly, the
ordinary shares may not be offered or sold in the United States or to
U.S. persons (as such terms are defined in Regulation S under the 1933
Act) unless registered under the 1933 Act and applicable state
securities laws or an exemption from such registration are granted.
Certain statements in this report contain forward-looking information.
These statements address future events and conditions and, as such,
involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the statements. Such factors
include, among others, the results of future exploration, risks
inherent in resource estimates, increases in various capital costs,
availability of financing and the acquisition of additional licences,
permits and surface rights. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date the statements were made, and readers are advised to consider
such forward looking statements in light of the risks set forth in the
company's continuous disclosure filings as found at the (Canadian) SEDAR website.
For further information on the Project and the resources contained
therein, please refer to the Company's Canadian NI 43-101 and
Australian JORC compliant technical report "Yandera Copper Project,
Madang Province, Papua New Guinea" (dated April 2012) which is
available on the Company's website and at the (Canadian) SEDAR website.
For further information on the Yandera Project, including a description
of Marengo's standard data verification processes, quality assurance
and quality control measures, and details of the key assumptions,
parameters and methods used to estimate the mineral resources set out
in this report and the extent to which the estimate of previously
declared mineral resources set out herein may be materially affected by
any known environmental, permitting, legal, title, taxation,
socio-political, marketing or relevant issues, readers are directed to
the technical report entitled "Technical Report on the Yandera
Copper-Molybdenum-Gold Project Madang Province, Papua New Guinea",
dated May 14, 2012, lodged concurrently on the SEDAR website (or attached to this release).
The resources disclosed herein are preliminary in nature and include
inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them to be
categorized as mineral reserves. There is no certainty that the mineral
resources disclosed herein will be realized or converted to mineral
reserves. Mineral Resources which are not mineral reserves do not have
demonstrated economic viability. The information disclosed herein is
subject to change and receipt of the feasibility study. No decisions to
place the project into commercial production has been made and any such
decision is subject to a review of many factors including those matters
set out in the feasibility study when it is received by the company.
The contents of this release have been approved by Mr. Allan R G Brown,
BSc(Hons) Metallurgy, FAusIMM, Member MICA, Chartered Professional , a
"Qualified Person" as set out in National Instrument 43-101 (NI43-101)
by reason of education, affiliation with a professional association (as
defined in NI43-101) and past relevant work experience.
SOURCE: Marengo Mining Limited
For further information:
Tel: +1 416 644 8680
Tel: +61 8 9429 0000