Adriatic’s Balkans project construction

The London-based company, which is also listed on the London Stock Exchange, Adriatic Metals has successfully cleared the final major regulatory approval hurdle that now opens the way for it to start construction of its proposed Vares silver-zinc-lead mining and processing operation in Bosnia and Herzegovina later in the year. The company says it clinched the all-important exploitation, or mining, permit for the project’s cornerstone Rupice underground deposit from the country’s Federal Ministry for Energy, Mining and Industry following a public hearing in Vares earlier this month.

It caps off a remarkable turnaround time by Adriatic of just over four years between “discovery” of Vares and the project being fully permitted.

Rupice underpins the proposed Vares development, which has a current forecast capital cost of US$173 million.

Latest stated probable ore reserves for Vares’ Rupice underground and Veovaca open-pit deposits stand at 11.12 million tonnes at average grades of 149.6 grams per tonne silver, 1.28 g/t gold, 4.22 per cent zinc, 2.67 per cent lead and 0.43 per cent copper.

Of the overall reserves, the Rupice deposit accounts for 8.41Mt grading an average 179 g/t silver, 1.66 g/t gold, 5.04 per cent zinc, 3.18 per cent lead and 0.55 per cent copper.

That equates to 48.4 million ounces of contained silver, 450,000 ounces of gold, 420,000 tonnes of zinc, 270,000t of lead and 50,000t of copper – out of the Vares reserves contained metal content totals of 53.5 million ounces of silver, 460,000 ounces of gold, 470,000t of zinc, 300,000t of lead and 50,000t of copper.

Adriatic’s pre-feasibility study or “PFS” on Vares released last year shows the reserves sustaining production for an initial 14-year life of mine, with concentrate output for the first five years of operations averaging 15.3 million ounces of silver-equivalent per annum based on plant ore throughput of 800,000 tonnes per annum.

For the main Vares construction stage to be allowed to go ahead, Adriatic needed the exploitation licences for both the Rupice underground and Veovaca open-pit deposits, with the latter including permitting covering the proposed Vares processing plant.

Rupice is situated about 12km west-north-west of Veovaca.

The $540 million market-cap company, which received the Veovaca exploitation permit about six months ago, says the Rupice permit represents the last of the key regulatory approvals.

Timing of permitting approvals for the two deposits varied due to Rupice being a greenfields deposit and Veovaca a brownfields site.

Management envisages construction at Vares commencing in earnest some time during the December quarter this year after delivery of a definitive feasibility study and an environmental and social impact assessment in coming weeks.

Vares, centred around the town of Vares about 50 minutes’ drive from the Bosnia and Herzegovina capital, Sarajevo, is perched in a mountainous area of widespread forests and meadows.

Veovaca is a historic open-cut mine that produced lead, zinc and barite concentrates and ceased operations 33 years ago.

Adriatic plans to build most of the processing plant and associated infrastructure at the brownfield Veovaca mine site and to carry out underground mining and partial tailings backfilling at Rupice.

Economic estimates in the PFS featured a sterling average EBITDA of about US$251 million per annum for the first five years of metal concentrate production, a net present value for the project of US$1.04 billion and an internal rate of return of 113 per cent.

All-in sustaining costs for Vares across the initial mine life have been extrapolated to average $US120 per tonne milled and the capital cost payback period from production start-up has been put at an eye-catching 1.2 years.

Source: thewest.com.au

Ariana Resources almost doubled estimates at its Turkey Kepez North mine

Anglo-Turkish precious metals miner Ariana Resources has almost doubled its estimates for gold reserves at the Kepez North site in Turkey.

The reassessment to 36,400 Troy ounces is a 97% increase on the last survey in 2020, and 310% on a feasibility survey conducted in 2013.

Optimism over the increase in the average grade of gold to 7.14 grammes per tonne and of silver to 64.65 grammes per tonne was matched by a “substantially improved” resource classification.

Drilling upgrade

Although subject to further checks, the mine is expected to increase extraction rates both in gold and silver. The figure for silver reserves has been upgraded to 329,400 ounces. Progress will be helped by the addition of five new diamond drill holes, announced on 30 June, which will capture 81% of the total resource by volume and more than 87% by weight. Kepez North is part of the Zenit Madencilik joint venture with Proccea Construction and Ozaltin Holding, of which Ariana Resources owns a 23% stake.

‘Great outcome’

Commenting on the results of the latest survey, Ariana managing director Dr Kerim Sener said: “This is a great outcome from the recent drilling undertaken in the Kepez area. We remain highly encouraged by this area as a potential source of very high-grade mineralisation.

“Based on the significant increase in the resource at Kepez… the joint venture has taken the decision to bring the drill rig back to this area to complete further drilling.

“This work, in addition to further mining studies and associated permitting is being expedited in order to bring this area forward in the mining schedule. Importantly, the geometry of the mineralisation lends itself well to near complete resource extraction.”

Source: capital.com

Uzbekistan’s Navoi increased net profit in 2020

Uzbekistan’s state-owned mining company Navoi is currently preparing its gold business for the privatization. The company reported that the company’s net profit from gold operations in 2020 of $716.6 million was 209% higher compared to 2019 ($231.6 million). The company’s revenue from gold sales amounted to $4,558 million in 2020.

According to the publicly released documents, Navoi produced approximately 2.6 million ounces of gold in 2020, which makes Navoi the fifth largest gold mining company globally. Moreover, with all-in sustaining costs of $803.7/oz of gold reported for 2020, the company is also one of the lowest cost gold producers worldwide. Navoi owns Muruntau, the world’s largest gold mine by production and estimated reserves.

In a statement, Navoi pointed out that the implementation of its 52 investment projects worth more than $628 million is continuing at a rapid pace. Going forward, the realization of these projects will enable Navoi to create more than 30,000 jobs and boost gold production by 30%, the company noted.

Navoi said that the company’s reorganization and the creation of a joint-stock company was initiated as of March 6, 2020. The company added that it is currently continuing its efforts to attract financing, including from foreign banks, to help realize the company’s ambitious investment projects. Navoi is planning to place a debut Eurobond in 2021.

The company added that measures it has been implementing are laying the necessary foundation to prepare Navoi for an initial and secondary public offering on national and international stock exchanges. The IPO is scheduled for 2023.

Source: kitco.com

Euro Sun Mining’s permitting process for Rovina Valley project, Romania

As announced on April 5th, 2021, Euro Sun Mining officially initiated the Strategic Environmental Assessment- SEA with the Environmental Protection Agency of Hunedoara County- EPA. The legislated eighteen-day period for public comment on initiation of the SEA has passed with no comments received by the EPA.

With the issuance of the Avizul de Oportunitate, by the County Council of Hunedoara County, the Company is now approved to proceed to the next stage of permitting for the Rovina Valley Project, namely the Planul Urbanistic Zonal or Certificate of Urbanism for Land.

The Planul Urbanistic Zonal process takes the existing pastoral or forest lands and re-zones the required area for commercial activity. The definitive feasibility study, filed on April 14th, 2021, provided the necessary engineering details required for the submittal of the approximately 3,000-page application and ultimately approval of the permit.

The Company and the EPA are now working towards receiving the agreements and/or opinions from all the administrative authorities for the environmental opinion on the Planul Urbanistic Zonal and preparing for public consultations expected to occur in Q3 2021.

“We are pleased to see continued ongoing support by the Romanian state as they deliver approvals as required to move the Rovina Valley Project towards our construction start. Investor perception of Romania as a potentially unfriendly jurisdiction to mining is clearly not accurate as these approval milestones continue to demonstrate. Our Definitive Feasibility Study has outlined a generational asset that brings the highest environmental stewardship along with significant economic benefits directly to our local communities and to the County as a whole. The milestone permit now allows the company to proceed with the Planul Urbanistic Zonal taking us another step closer to construction,” Scott Moore, Euro Sun’s CEO states.

Source: energyindustryreview.com

Three Azerbaijani mines were granted to two Turkish companies

With a presidential order signed by Ilham Aliyev, the operating rights of three mineral mines in Azerbaijan were granted to two Turkish companies; The Qasqacay, Elbeydas and Agduzdag mines were transferred for the purpose of study, research, exploration, development and exploitation based on a 30-year contract, said the presidential order.

According to the order, Turkey’s Eti Maden will operate the Qasqacay mine, while Artvin Maden will have the Elbeydas and Agduzdag mines.

Aliyev also instructed the Environment and Natural Resources Ministry and the Economy Ministry to prepare contracts for the operation of the mines within three months and to sign them with the companies.

The Agduzdag mine is located in the southeastern part of the Kalbajar region, which was recently liberated after a nearly three-decade occupation by Armenian forces.

During a 44-day conflict last year, which ended in a truce on Nov. 10, 2020, Azerbaijan liberated several cities and nearly 300 settlements and villages in Karabakh from Armenia’s occupation.

The cease-fire was seen as a victory for Azerbaijan and a defeat for Armenia, whose armed forces withdrew in line with the agreement.

A joint Turkish-Russian center was established to monitor the cease-fire. Russian peacekeeping troops have also been deployed in the region.

Source: dailysabah.com

Iranian private sector might operate 90 mineral zones in Kermanshah

As previously reported, some 50 trillion rials (over $1.1 billion) worth of mining projects were handed over to the private sector in the previous Iranian calendar year (ended on March 19), Iran Minerals Production and Supply Company (IMPASCO), announced.

Holding tenders in this due has been started since the beginning of this Iranian calendar month (May 22), Mohsen Darabi, the head of the province’s Industry, Mining, and Trade Department, stated.

According to IMPASCO which is a subsidiary of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), last year, tenders were held for awarding 12 mining projects in which domestic investors as well as companies from China, Tajikistan, Iraq and Georgia participated.

As reported, contribution of the private sector in the country’s mining sector is going to improve the Gross Domestic Product (GDP) in the current Iranian calendar year which has been called the year of surge in production by the Leader of the Islamic Republic of Iran Seyed Ali Khamenei.

Utilizing the private sector’s resources, the mining sector is going to generate more employment, production and value added for the country.

Three weeks ago, IMIDRO Head Khodadad Gharibpour announced that IMIDRO is contributing to $1.93 billion worth of projects that are going to be implemented by the private sector.

According to Gharibpour, IMIDRO and its subsidiaries are going to implement 31 projects, worth $2.276 billion, in a variety of fields including steel, copper, gold, antimony, nepheline syenite, phosphate and also mining infrastructure in the current year.

Due to the significant role of the mining sector in the country’s non-oil exports, the Industry Ministry has provisioned operational targets in the mining sector’s three major areas of exploration, extraction and processing in the current year.

According to Deputy Industry Mining, and Trade Minister Darioush Esmaili, the mining sector accounted for 25 percent of the country’s non-oil revenues in the past Iranian calendar year.

Source: tehrantimes.com

Armenian residents and eco-activists protest against new mine

The territory of the new mine is planned to cover an area of ​​13 sq. m in the Lori region of north Armenia.

Protests have broken out in the Lori region against the development of a new mine which may damage the development of eco-tourism in the area where several other mining enterprises are already operating. Local residents, eco-activists, and eco-tourism investors are protesting against the building of mines on the territory of several villages and along the 38-kilometer road connecting the city of Vanadzor and the Tumanyan community.

The Czech company Lusajur Ventures Invest planned to meet with residents of five villages – Margaovita, Vahagnadzor, Vahagni, Debeda, and Yeghegnut to obtain permission for geological exploration of new deposits of gold and copper, however, public discussions attended by eco-activists, villagers and the company representatives have failed.

Head of the village of Vahagnadzor, Edik Egoyan, states that the majority of this land belongs to their community:

“If the mine is built, its entrance will be located in Vahagnadzor. The villagers are against it. The entire territory is covered with forests, we have a lot of springs here, are recreation areas are located in the territories adjustment to the mines, including the Lori holiday house and a summer camp”.

Those who have invested in the region are also worried about the situation. Many of the locals believe that the region should be developed through tourism, light, and food industries, rather than mining.

Arguments against the mines

The Debed Life creative house was opened in the village of Debed last year and here, guests can enjoy an inspirational environment for creative work.

“Considering the factors of the coronavirus and the war, and the post-war period, I think we had a very productive year. The opening of the mine will be a disaster for business. I am not engaged in tourism, my work does not depend on the tourist season, I always have guests.

The foundation of my business is a healthy lifestyle. People consciously choose this very beautiful nature as a more effective and favorable environment for their work. We have guests from different countries, some of them intend to invest in projects in Armenia”, says the founder and director of the project, Tatevik Aghababyan. Tatevik adds that beekeeping, agriculture, cattle breeding, even the sphere of information technologies are developing in the region, and the decision to open a mine in the region has come as a surprise for everyone:

“I myself have invested quite a lot of money, right now at the stage of approval of two additional business plans, and I am talking about six-digit figures. Mining is an illusory investment with short-term returns. We are talking about changes in business culture, we are talking about a revolution in the rural environment.

Debed Life is a new benchmark of rural life in this region. We have a large scope of influence; business-minded and creative people meet here. But even a hint of a mine, not to mention the operating one, and the entire investment potential of the region will be called into question”.

Tatevik Aghababyan believes that the mining industry has a colonial, slave-owning character, while ideas like her project are aimed at the future.

Vahagn Vardumyan, an independent expert in the development of ecotourism, turned his grandfather’s house in the village of Vahagni into a guest house and named it “Vaagnitun” (Vahagn’s house). He plans to create glamorous camping and places for outdoor recreation with comfort:

“Our village is not far from the SMART-center operating in Debed, which was built by the Children of Armenia Foundation. IT specialists have a real opportunity to move here with children and the whole family. Vahagni is located at an equal distance from Yerevan and Tbilisi, which is important from the point of view of tourism: both residents of Yerevan and Tbilisi can come here. We organize hikes, people admire nature and these places. But all of a sudden they want to build the mines.

In Vahagni, everyone is against them. The idea of ​​ecotourism has already begun to work and develop in the villages. With this intent, my friend bought a house in the village. An investment environment is being created, and the villagers are seeing these changes. They themselves open guest houses of their own, and an integral system is being created. But now some people from the outside are interfering”.

Gevorg Vardanyan, coordinator of the Lori Tourism Center and director of Rafting in Armenia said that over the past two years, unprecedented development of tourism has been observed in the Lori region, and while the country’s borders were closed, domestic tourism has intensified:

“There were investments of $ 11.5 million. The Ministry of Territorial Administration does not consider this a serious investment, for them serious investments are mines. Even if we leave tourism aside, the light industry in these places is also developing. These five villages are located on the same mountain range. If you develop a mine, they will start to collapse – one by one”.

Gevorg Vardanyan says that he met with representatives of the Ministry of Territorial Administration and the Ministry of the Environment and, as a result, realized that they were not interested in tourism:

“But serious development has been observed in the region, and this is already a problem for investors. Now we are trying to protect their interests and maintain a balance with them.

It is a shame that the current government is not ready to maintain the balance, they consider the mining industry a priority since the economy is in a difficult situation. All the mines operating in Lori combined are only bringing a penny to the budget, but the harm they do is enormous”.

Are mines a priority?

Narine Hakobyan, an expert on the subsoil management of the Ministry of the Environment, says that it is impossible to simply stop the development of mines in Armenia in one fell swoop, based solely on the harm they bring to nature:

“Now the ministry is pursuing a policy of stable development and providing new technologies for new mines. It is necessary to develop some mechanisms in order to mitigate and neutralize, if possible, both the consequences of the tailing dumps inherited from the past, embankments around the mines, and the impact of new mines”.

During a meeting with ecologists, Minister of the Environment Romanos Petrosyan explained that if companies receive permission for geological exploration of the territory and find deposits of expensive metals, this does not mean that they will receive permission to develop the mine, and no such permission will be issued if the local residents are opposed to it.

“We will not allow violation of public interests for the illegal or even legal enrichment of one person or clan. But the following circumstance must be taken into account: until our economy is diversified enough so that we can replace part of the GDP that is provided by the operation of mines with intellectual property, information technology, and industrial sectors, we will have to continue to develop the economy at the expense of at least the mines that are operating already”, – said Romanos Petrosyan.

Former deputy governor of the region Gayane Markosyan believes that the work of the mines is a necessity for the state, but the interests of citizens cannot be ignored. Gayane Markosyan notes that the residents of Lori are wary of the opening of mines, as there has been a negative precedent already:

“The catastrophes we witnessed in our region allow us to approach the issue strictly. On the territory of Alaverdi, the most negative consequences of the activities of the mines are observed. Here we have the highest rates of cancer, abnormal childbirth, and other diseases. Until the operating mines have implemented mechanisms for safe operation, it is problematic to talk about opening the new ones”.

Protection of nature and human rights

Oleg Durgaryan, head of the Center for Unification and Support of Communities, believes that Lori is already a disaster zone, faced with deep-seated economic and healthcare problems.

“Research conducted in 2020 in the Akhtala community showed critically high levels of arsenic in children. This is a major problem. But who protects the residents of the community, how are their problems solved, do we have such mechanisms at all? When we go to the ministry of health, we are told that they have no mechanisms to measure all of this.

When we appeal to the Ministry of the Environment, we are told that this is not within their mandate. Until we create mechanisms for measuring the impact of mines on the environment and on human health, there are no compensation or insurance mechanisms yet, we should forget about the development of new deposits completely”, says Oleg Durgaryan. He recalls that two years ago the authorities stated that Armenia should switch from a raw-material model of the economy to a high-tech one:

“Why is there now a desire to increase the number of mines? This speaks of the prospects, concepts of political and economic development of the state. Mine development is the easiest solution if you can’t do anything else”.

Source: jam-news.net

Roadmap for Uzbekistan’s privatization of mining assets

Uzbekistan’s government sees the path to achieve economic growth by attracting more private funding to the economy, hence the government needs to sell mining assets. To obtain better prices for the assets, they would like to transform the largest state-owned enterprises (SOEs) in the country and improve their efficiency.

In May 2021, Uzbekistan’s State Asset Management Agency (UzSAMA) and the World Bank arranged a high-level international forum to lay out the roadmap for Uzbekistan’s privatisation of some of its most valuable companies.

The quality of the audience was a sign of the government’s commitment to making privatisation a success. Amongst the attendees from the Uzbek government were: Jamshid Kuchkarov, Deputy Prime Minister and Minister of Economy and Poverty Reduction; Timur Ishmetov, the Minister of Finance, Omonulla Nasretdinhojaev, first deputy minister of finance, Adham Ikramov, the chairman of chamber of commerce, and industryand the Chairman of UzSAMA, Akmalhon Ortikov.   High-level international participants were also well represented, including the World Bank’s Central Asian vice-president Anna Bjerde, the EBRD’s managing director for Central Asia Zsuzhanna Hargitai, and Sir Suma Chakrabarti, ex-chairman of EBRD who is now working as an advisor to the President of the Republic of Uzbekistan on Economic Development, among many others.

The keynote speaker of the event was HE Deputy Prime Minister Jamshid Kuchkarov, who set the tone to the forum by declaring the goal of the government in the mid-term: the government wants to increase GDP per capita from the current $1,700 to $2,500 in 2025 and $4,200 in 2030 and this would require GDP growth of 6 to 7% per annum.

As bne IntelliNews reported in the feature “The Growers,” in 2020 Uzbekistan was one of a handful of countries in the world not to go into recession despite COVID pandemic, due to economic reforms that were launched prior to the pandemic and timely funding from International Financial Institutions (IFIs) to soften the economic blow of the pandemic.

This work has been spearheaded by the Ministry of Finance jointly with UzSAMA and this forum was more of a status check on the progress of this work.

The event was co-arranged with the World Bank to show the commitment of the IFI community’s active involvement in the process and their support of the Uzbek government campaign.

IMF Head of Mission pointed out that Uzbekistan is running a current account deficit and it is currently being financed from international borrowings and this should be replaced or complimented by equity investments. In the case of Uzbekistan where most important sectors are state dominated, transformation of SOEs and privatization of these assets seem to be the most natural next steps to alleviate debt burden. But despite the upbeat talks and serious attitude of the delegates, the proof of the pudding will be in the eating. The Big Four consultants and investment banks, such as Rothschild’s, which is particularly active, are already deeply involved in the transformation, valuation and sell side advisory.

The Minister of Finance Timur Ishmetov during his speech noted that one large bank will be sold by the end of this year, the regional flagship Coca Cola bottler based in Tashkent is in the process of sale and Navoi Mining (one of the largest gold and uranium producers in the world and brings in 30% of the budget of Uzbekistan) is undergoing corporate governance actions and transformation as well.

Ishmetov pointed out that the government was a bit hesitant when they had decided to bring in independent directors to fully state-owned banks, but now they see the positive results and are considering appointing another 100 senior managers to state owned companies. The plan is to sell some 550 state-owned companies by the end of this year and several auctions for large real estate assets have already started.

Ortikov, the Chairman of UzSAMA showed a list of top 10 most profitable companies and bottom 10 largest loss-making companies in the country. The solution to the issue seems to be further reforms of the sectors, attracting private sector as better managers of these assets and increasing profitability, at the same time dealing with social issues related to large layoffs.

The issue of transparency and public accountability came up during the event several times, raised by both by Uzbek government and the international community participants. UzSAMA is committed to transparency with the open declaration of potential buyers and their history, and where the privatization proceeds will go to. The IFIs involved in the process, working with the Uzbek Government and UzSAMA, should help to address these issues.

Another key issue raised during the forum was underdeveloped legislation. The privatization law was adopted in 1991, and this year the government is working on new law that should be adopted by the end of the year.

The question of fair valuation was also raised, where the local valuation standard tends to value assets higher than the market value. The government has already nixed a mandatory requirement of adopting the local valuation as the auction minimum starting bid to throw the process open to greater competition. But that means local standards will have to be brought up to the international levels and it will take time.

Overall, the event was phenomenally successful due to large attendance and very senior government officials present from the beginning till the end of the event. That allowed them to listen to all sides of the issue. This was a good case of a dialogue and cooperation with international community. The biggest challenge facing the Uzbek government seems to be to maintain the balance between going fast to maintain the momentum of the reforms to show successful privatizations are possible, and taking enough time to prepare the privatisations properly. To take a concrete example, the privatization of a chemical company is difficult until natural gas prices, distribution network regulation and electricity market de-regulation have all taken place. The question of if the government go fast and perhaps sell at a lower price to leave the transformation to the strategic investor that acquires the asset or take all the measures (legislative, transformation, corporate governance, transparent reporting) first in order to command a higher asking price remains open.  As the event showed, the IFI are on board with the government to help find the right balance in this tricky question.

Source: intellinews.com

Euro Sun Received approval for SEA at Rovina Valley, Romania

Euro Sun Mining Inc. announced that the company has been officially notified by the Environmental Protection Agency of Hunedoara County that following a meeting of the Special Committee set up at Hunedoara County level, on 27.04.2021; the required eighteen-day public comment period on the initiation of the Strategic Environmental Assessment has passed; no comments were received; and the SEA is approved to move forward. The Company published the notification in the public press on May 10th, 2021.

The Company and the EPA are now working towards receiving the agreements and opinions from all the administrative authorities required for approval of the Planul Urbanistic Zonal or Certificate of Urbanism for Land forming part of the SEA process. The Company and the EPA are also preparing for public consultations which are expected to occur in Q3 2021.

Scott Moore, Euro Sun’s CEO states, “All aspects of ESG principles are key to success of the Rovina Valley Project. This approval is an important milestone in the SEA process. We believe that our frequent public communications and presence in the local community has played an important role. Environmental stewardship is a key factor to the success of Rovina Valley Project with a life of mine design from extraction to rehabilitation with minimal impact utilizing the highest global standards for mining processing, tailings management with DRY-Stacking and utilizing Zero Cyanide. We are pleased the EPA is continuing to advance the project in line with Romanian legislation and we look forward to a collaborative effort on the successful outcome of the SEA process.”

Source: streetinsider.com

Vast Resources’ mining at Baita mine in Romania started

Mining and concentrate production will continue uninterrupted during the development phase at Baita Plai, with underground production currently focused on levels 17 and 18 as well as the new mining area on level 19, Vast Resources said and added that the decline project to level 19 is progressing on schedule and mining of fresh higher grade ore at its Baita Plai polymetallic mine in Romania has begun.

Vast said exploration drilling targeting the downdip extension of the Antonio skarn to level 22 from level 19 is expected to commence in June 2021, as per its new mechanised mine plan. New mechanised mining equipment has arrived on site, it added, with the remaining equipment expected to arrive in accordance with the new mine plan schedule.

“I am delighted with the operational progress that we have made in recent weeks and we remain well capitalised to achieve our development plan at Baita Plai without needing to come back to the market for the foreseeable future. We will look to provide further updates from Baita Plai via our social media platforms and via the regulatory news channels as appropriate over the coming days and weeks,” said Chief Executive Andrew Prelea.

Source: tools.morningstar.co.uk