| Wed 29 Oct 2008, 9:00 | | BRE - Braemore - Operational Update |
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BRE
BRE
BRE - Braemore - Operational Update
BRAEMORE RESOURCES PLC
(A company incorporated in England and Wales with Registration Number
5350550)
(South African Registration Number: 2008/013973/10)
Share code on the JSE Limited: BRE
Share code on AIM: BRR ISIN: GB00B06GJQ01
("Braemore" or "the Company")
Operational Update
Braemore Resources Plc ("Braemore" or "the Company") wishes to update its
shareholders on the progress of both its nickel and platinum operations in
recent months. Braemore`s management remains committed to establishing the
Company as a mid-tier metal producer and a number of key milestones of its
"mine-to-metal" business strategy have been achieved.
Given current market conditions, it is understandable that this progress has
not been fully appreciated. The recent fall in commodity prices to historic
levels represents a necessary correction after sentiment and speculation
drove commodity prices, and with them share markets, to unsustainable highs
earlier in the year.
Operating amid these volatile market conditions is challenging for large and
small mining companies alike and Braemore is cognisant of the need to
reassure shareholders of the Company`s ability to maintain its operations and
development work.
Braemore would highlight the following developments:
BANKABLE FEASIBILITY STUDY ("BFS") FOR 10MW SMELTER COMPLETED
The BFS has been completed and the results support Braemore`s vision of
building the first commercial smelter utilising ConRoast technology. The 10MW
smelting facility will be suitably sized to handle identified sources of low-
grade PGM, low sulphur and high chrome content feedstocks.
There are substantial economies of scale gained by the 10MW smelting complex,
which can treat up to 80ktpa of concentrate. Even at 10MW, the operating
costs are comparable with a significantly larger traditional smelting
complex, again supporting the scalability and cost effectiveness of the
facility. This is due to the simple design of the smelter complex which
requires fewer unit steps to provide the feed to the hydrometallurgical plant
and also results in lower power consumption per tonne of concentrate compared
with the conventional smelting process.
The comparative capital costs show a considerable reduction when compared
with a traditional smelting facility, confirming previously stated
independent reviews that the technology offers a 30% reduction in capital
requirements for an equivalent facility using conventional smelting
technology.
ESTABLISHING A FULLY-COMMERCIALISED, INDEPENDENT SMELTING FACILITY FOR THE
PGM INDUSTRY
As announced on 10 September, Braemore has successfully upgraded its
demonstration facility at Mintek with the installation of a new 3.2MW smelter
capable of processing around 2000 tonnes per month. With the appointment of
Dr Mathews Phosa as Chairman, Braemore is poised to accelerate the
establishment of the 10MW facility through a Black Economic Empowerment
("BEE") transaction that will bring on board a partner in the beneficiation
process.
KEY RELATIONSHIPS CONCERNING OFF-TAKE AGREEMENTS ESTABLISHED
Both the nickel and platinum divisions are supported by solid relationships
with regard to off-take agreements. The confidential nature of these
agreements means that Braemore may be precluded from disclosing the parties
involved, but Braemore can confirm that the increased capacity for the
upgraded facility has successfully been contracted to various PGM producers
and the Company hopes to announce details of these arrangements in the coming
months.
CORPORATE RESTRUCTURING
Braemore has initiated various operational restructuring initiatives to
further streamline its businesses and focus the corporate and operational
teams on key business objectives, the benefits of which are already accruing.
BRAEMORE NICKEL PROGRESS
In view of the current market environment, the fundamentals of the nickel
business are being rigorously tested. Discussions with BHP Billiton regarding
the way forward for the Leinster nickel project are ongoing and Braemore will
keep shareholders informed of material developments.
JSE LISTING AND LIQUIDITY
The South African shareholder base has access to only 10% of the company`s
share capital via Braemore`s JSE listing, hence the tight liquidity and
unaligned share price movements with the AIM listing. Braemore is aware of
this situation and reiterates that the JSE listing was undertaken to
facilitate the BEE transaction currently being negotiated and thereafter to
access South African capital.
In summary, Leon Coetzer, CEO, said:
"We remain committed to our long-term objectives and, despite a tougher
operating environment, we are confident that we have the people and the
agreements in place to deliver value to all our stakeholders."
For further information please visit our website at www.braemoreresources.com
or contact:
Braemore Resources Plc
Leon Coetzer, Chief Executive Officer
+27 11 875 6540
WH Ireland: (Nomad and joint broker)
James Joyce
+44 207 220 1666
Mirabaud Securities: (Joint broker)
Rory Scott
+44 207 878 3360
Qinisele Resources: (RSA Corporate advisers)
Dennis Tucker
+27 82 492 4957
Russell and Associates: (RSA Public relations)
Nicola Taylor or Charmane Russell
+27 11 880 3924
Parkgreen Communications: (UK Public relations)
Sue Scott/Louise Goodeve
+44 207 933 8780
Sasfin: (RSA Corporate Sponsor)
Sharon Owens
+27 11 809 7762
London
Sponsor
Sasfin Capital (A division of Sasfin Bank Limited)
Date: 29/10/2008 09:00:07 Produced by the JSE SENS Department.
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