AMSTERDAM, The Netherlands, Jan. 24, 2017 /CNW/ - Meridian Mining S.E. (TSX V: MNO) ("Meridian" or the "Company"), today announced production data from its Brasil Manganês Corporation Mineração S.A. ("BMC") high-grade manganese project and provided an update on its Bom Futuro tin joint venture option. Both projects are located in the state of Rondônia, in northwestern Brazil.
"In 2016 we substantially increased both production and sales of our high grade manganese ore, particularly in the second half of the year when commodity pricing continued to rapidly improve," said Anthony Julien, President and CEO of Meridian. "With a growing roster of both domestic and international customers, our focus for 2017 remains on growing and leveraging early stage production to partially offset spending on a range of exploration and development initiatives."
Growing Manganese Production
Meridian produced 13,326 tonnes of manganese oxide mineral product in the fourth quarter of 2016 versus 6,536 tonnes in the fourth quarter of 2015, a 104% increase in production over the prior year period. Production for 2016 totalled 34,622 tonnes compared with 17,037 tonnes in 2015, a 103% increase over the prior year. The installation of the dry screens to separate waste products in the field prior to trucking to the plant for processing was a key driver of the increased production.
Construction of the Jaburi pilot plant and installation of all processing equipment is proceeding on time and on budget. The pilot plant will introduce more efficient jigging and improved water utilisation, along with the ability to crush and process harder breccia ore types. The pilot plant is expected to be commissioned early in the second quarter of 2017. The pilot plant will treat primary vein material and verify metallurgy for more advanced studies. The pilot plant is anticipated to generate significant data for a preliminary economic assessment and feasibility study on the project.
By comparison with 2015 when BMC sold a total of 1,906 tonnes of mineral product, during the fourth quarter of 2016, BMC sold 19,592 tonnes of manganese mineral product, reaching a total of 39,820 tonnes shipped for the 12-month period ending December 31, 2016. In addition, during the fourth quarter of 2016 Meridian negotiated commitments for an additional 22,500 tonnes, of which 5,000 are expected to ship in January. The sales team continues to target speciality applications in the battery, fertilizer, welding and steel industries, which recognize a premium for the high quality of Meridian's product. During the fourth quarter the Company concluded sales agreements for 17,199 tonnes with international steel alloy producers primarily in China and Korea.
CIF Tianjin benchmark pricing for 44% manganese was US$1.86 per dmtu as of January 4, 2016 and it was US$9.17 per dmtu as of December 24, 2016 (source: www.metalbulletin.com).
Bom Futuro Joint Venture Option
In December 2016 Meridian announced it had entered into an option agreement with a group of local cooperatives whereby it could earn an interest in selected assets around the Bom Futuro tin mine located in the state of Rondônia. Under the terms of the Agreement, Meridian has the right to explore a 492.57ha Tailings Reprocessable Area (the "Tailings Area"), a 2,000ha Central Area, which includes the existing Bom Futuro mine, and an 18,000ha Non-Explored Area. The Company has until March 15, 2017 to complete a preliminary technical audit of the various areas, to determine if it wishes to exercise its option under the Agreement. Meridian has commenced its technical reviews, in addition to assessing the capital expenditures (such as the construction of a 69 kV power transmission line, required to meet its obligations under the Agreement).
To date the Company has completed 106 auger holes into the Tailings Area to scope the depth of the tailings pile and provide provisional grade data. A Banka rig has been purchased for a more detailed sampling program and is undergoing refurbishment. Samples will be analyzed in an on-site laboratory and through an independent certified laboratory (ALS Canada). The program will continue over the full audit period and will be accompanied by metallurgical studies to test tin recoveries through a variety of gravity-based recovery techniques.
Layne Do Brasil Sondagens Ltda has been contracted for a 500m diamond drilling program, for an initial review of the bedrock mineralization. A hand-portable rig subleased from Energold will be used to test sites in steeper terrain. The Bom Futuro primary cassiterite mineralization is hosted within veins and pegmatite ring structures around the Bom Futuro Hill.
A Brazilian geophysical services company (AFC Geofisica) has been contracted to test the effectiveness of ground-based surveys in fingerprinting the character of mineralized positions, commencing with 2km2 survey over palaeochannels and the structurally controlled primary mineralization. Planned survey techniques will include ground magnetics, induced polarization, gravity and ground-penetrating radar. Following review of results from the initial survey requirements for trial surveys in the Non-Explored Area will be evaluated.
"With our model based on identifying assets with early production potential, we are initially focused on assessing the Tailings Area to see if it can generate revenue and cash flow that will support a broader exploration program in the surrounding area," said Anthony Julien. "Commodity pricing for tin has improved steadily in the last year as stocks have dwindled in the face of relatively stable demand, lower production from key producing regions, and high new mine costs. With this option, we feel that we are well positioned to rapidly capitalize on improving market conditions."
The technical information about the Company's production and sales activities has been prepared under the supervision of and verified by Carlos Braga (B.Sc., MBA, member of the Chilean Mining Commission), the Chief Operating Officer of Meridian Mining, who is a "qualified person" within the meaning of National Instrument 43-101.
The technical information about the Company's exploration activity has been has been prepared under the supervision of and verified by Dr. Adrian McArthur (B.Sc. Hons, PhD. FAusIMM), the Chief Geologist of Meridian Mining, who is a "qualified person" within the meaning of National Instrument 43-101.
On behalf of the Board of Directors of
Meridian Mining S.E.
President, CEO and Director
Meridian Mining S.E. is focused on acquisition, exploration, development and mining activities in Brazil. The Company is currently focused on exploring and developing the BMC manganese project, the Bom Futuro tin JV area, and adjacent areas in the state of Rondônia. The Company employs a two-pronged strategy with the objective of growing pilot production while advancing a parallel multi-commodity regional exploration program. Meridian is currently producing high grade manganese at its project located at Espigão de Oeste.
Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to the Company's plans for exploration and development of its properties and potential mineralization. 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 risk factors include, among others, failure to obtain regulatory approvals, failure to complete anticipated transactions, the timing and success of future exploration and development activities, exploration and development risks, title matters, inability to obtain any required third party consents, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices and one-time events. In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: (1) the proposed exploration and development of mineral projects will proceed as planned; (2) market fundamentals will result in sustained metals and minerals prices and (3) any additional financing needed will be available on reasonable terms. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
The Company cautions that it has not completed any feasibility studies on any of its mineral properties, and no mineral reserve estimate has been established. In particular, because the Company's production decision relating to BMC's manganese project is not based upon a feasibility study of mineral reserves, the economic and technical viability of the BMC manganese project has not been established.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Arrangement and has neither approved nor disapproved the contents of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Meridian Mining S.E.
For further information: Nick Hurst, 416-586-1942, [email protected]