TIDMASA
RNS Number : 6628K
ASA Resource Group PLC
23 September 2016
23 September 2016
Asa Resource Group plc
("Asa Resource", "the Group" or "the Company")
Bindura Nickel Corporation AGM held 22 September in Harare,
Zimbawe.
The Company wishes to announce that Bindura Nickel Corporation
("BNC"), a 74.73% owned subsidiary, has released forward market
guidance at their AGM held 22 September in Harare, Zimbawe.
The relevant extracts of the Chairman's speech are published
below:
UPDATE ON OPERATIONS
BNC Performance Report 1(st) Qtr. 2017
Executive Summary
Quarter Quarter
ending ending September Quarter
TROJAN MINE 31 30 July August Budget ending
March June 2016 2016 2016 30
2016 2016 Sept
2016
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Development meters (m) 634.8 599.7 286.2 309.4 345 941
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Tonnes mined (t) 97,335 97,689 37,755 36,033 41,667 115,455
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Tonnes milled (t) 107,421 101,433 38,568 35,371 41,667 115,606
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Head grade (%) 2.30 1.76 1.86 2.20 1.83 1.95
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Recovery (%) 90.8 87.0 87.2 91.2 86.0 88.1
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Ni in conc (t) 2,246 1,555 624 709 655 1,988
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Nickel sales (t) 2,274 1,493 614 745 655 2,014
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Average Nickel
Price Realised ($/t) 5,520 5,728 6,660 6,726 5,525 6,304
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Cash cost ($/t) 4,370 5,736 5,392 4,160 3,770 4,418
-------------------- ------- -------- -------- ------- --------- ------------ ----------
All in sustaining
cost ($/t) 4,934 6,489 5,326 4,712 4,584 4,863
-------------------- ------- -------- -------- ------- --------- ------------ ----------
Business Re-organisation
After retrenching 300 employees in December 2015, BNC outsourced
Development Services in the Mining Department to a contractor
company, with effect from 1 June 2016. This has resulted in cost
savings worth US$400 000 which would otherwise have been incurred
in retrenchment costs. A new culture, anchored on the principle of
improved accountability, is emerging.
Industrial Relations
Management continues to engage staff through meetings and other
forms of communication, to ensure industrial harmony.
Human Resource Development
BNC has embarked on building its skills base through various
initiatives which include the recruitment of graduate learners in
key disciplines across the business. The newly introduced
performance management system will assist in identifying skills
gaps and focused training and development in critical areas of the
business.
Sales
BNC sold 2 852.17 tonnes of nickel in the first five months of
the year - a 53% increase compared to the same period in 2015 where
1 864.12 tonnes were sold.
Market Outlook
The average LME cash settlement price fell by 22.63% to $9
412.62/t ($4.27/lb.) compared to $12 165.10/t ($5.52/lb.) for the
same period in 2015. Nickel prices had remained depressed last year
due to historical high nickel stocks, lack of producer supply cuts
and replacement of Indonesian ore by Philippine ore.
LME nickel prices fell to seven year lows before regaining to a
nine month high in July 2016 supported by speculation of supply
cuts in the Philippines and supply disruptions at Cerro Matosso.
Philippines supplies 24% of the global nickel demand and had
sustained Nickel Pig iron production in China as it came in as a
substitute for the Indonesian ore after the ore export ban. The
market is keeping an eye on the developments in the Philippines
after a new government ordered an environmental audit of all mines.
To date eight mines have had operations suspended and it is
expected that more mines will be closed over the next six months.
Small scale miners accounting for 11% of producers have been
hardest hit, while the three major miners that account for 40% of
the Philippines nickel ore production have met the ISO 14000
environmental standard. The suspensions are not expected to have a
significant impact on the market in the short to medium term as
they seem to be affecting the small scale miners with little
production output. There seems to be a growing enthusiasm for a
complete suspension of ore exports in Philippines (like the
Indonesian ore export ban of January 2014). Indonesian smelters
have been ramping up production as well as other nickel producers
in a bid to reduce cost per tonne. A large stock overhang in and
off exchanges and Chinese smelters that had closed are coming back
into production. The recent increase in prices has resulted in an
increased interest in commodities by traders as they believe nickel
has entered into a bull cycle.
The International Nickel Study Group (INSG) reports that the
global nickel market will be in deficit for year 2016 due to
reduction in supply, increased production of the austenitic
stainless steel grades (which uses more nickel) in all main markets
and a sustained positive trend in nickel demand in the aerospace
and battery sector. Fundamental and technical view supports that
nickel is entering into a bull cycle. Jinchuan supports this view
and reports that demand in China is increasing due to recovery of
stainless steel sector and demand from new energy vehicles.
Jinchuan also reports that there has been changes in the nickel
demand in China that has seen demand of a mixture of nickel
products: pure nickel, nickel pig iron, nickel salt and processed
nickel products.
Life of Mine
Trojan Mine has the following estimated ore resources and Life
of Mine:
Ore reserves Average Grade Life of Contained
(Tonnes) (%) Mine Nickel
(Years) (Tonnes)
------------- -------------- --------- -----------
6 410 194.00 1.61 9 103 102.09
------------- -------------- --------- -----------
The first 4 years (up to 2020) will include blending of massive
and disseminated ore at 0.500 million tonnes per annum followed by
mining of disseminated ore at 0.750 million tonnes per annum. This,
of course, is subject to economics and further exploration
work.
Hunters Road Mine open pit will have a planned production rate
of 0.720 million tonnes per annum during the first four years,
increasing in year 5 to 1.2 million tonnes per annum, then
gradually ramping up to full production of 1.92 million tonnes per
annum in year 10. This will give Hunters Road a Life of Mine of 22
years.
Y C Kwan
Chairman
Cautionary Statement
This update has been prepared solely to provide additional
information to enable shareholders to assess the Group's strategy
and business objectives and the potential for the strategy and
objectives to be fulfilled. It should not be relied upon by any
other party or for any other purpose. This update contains certain
forward-looking statements and has been made by the Directors in
good faith based on information available to them at the time of
their approval of this update. These statements should therefore be
treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying such
forward-looking information.
About Asa Resource's Strategic vision
Our strategic vision is to be a fully integrated pan-African
commodity group, strengthening each commodity group through
exploiting Asa Resource's wide portfolio of mining interests. We
also continue to engage with trusted partners in many regions to
help us exploit the true value of our assets.
The process of segmenting assets at Group level and integrating
resources operationally is fundamental to both our short and
long-term strategies. Over time we seek to shift our focus to
having individual exposure in each of our key commodities including
nickel, gold, copper and diamonds. Shareholders can have an
interest in the whole Group or on a single-commodity basis. Our
interests in agriculture and property will add valuable income
during times of low commodity prices.
This strategy is already showing promise with significant
efficiencies achieved through a transfer of skills at mine level
and considerable efficiencies across our entire portfolio.
These developments would not be made possible without the
commitment, versatility and expertise of management at all levels.
This new vision has inspired us all within the Group to double our
efforts to re-build Asa Resource Group plc as a strong and
sustainable company.
For a copy of the full results please visit the company's
website: http://www.asaukplc.com/ or contact
Communications@asaukplc.com
London
Asa Resource Group plc.
One Fleet Place, London EC4M 7W
Yim Kwan, Finance Director
Tel: +44 (0) 203 696 5470
Hong Kong
Asa Resource Group plc.
Units 509-510, Level 5, Core E, Cyberport 3, 100 Cyberport Road,
Hong Kong
Samuel Ng, Investment Manager
Tel: +852 25662638
Nominated Adviser and Joint Broker
SP Angel Corporate Finance LLP
Prince Frederick House, 35-39 Maddox Street, London W1S 2PP
John Mackay, Jeff Keating, Caroline Rowe
Tel: +44 (0) 20 3470 0470
Financial Adviser and Joint Broker
Cantor Fitzgerald Europe
1 Churchill Place, Canary Wharf, London E14 5RB
Stewart Dickson, Patrick Pittaway
Tel: +44 (0) 20 7894 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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