North River Resources PLC shares are up 6.9% Tuesday morning after reporting that it has commenced underground diamond-bit drilling at its Namib lead, zinc and silver project in Namibia.
Readers of Alliance News Professional were a step ahead, as a result of our exclusive interview with North River which appeared on Monday. The article is reproduced below.
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INTERVIEW: North River Resources Deciding Future Of Non-Key Assets Says Managing Director
Regarding North River’s minor assets, including a joint venture with Baobab Resources PLC in Mozambique, the metals exploration and development company made it clear that it is assessing all options.
“We have a number of other small copper assets which we are looking to find joint venture partners with,” North River Resources’ Managing Director Martin French told Alliance News in an exclusive interview. “With regards to our Baobab joint venture, what we will ascertain over the next couple of months, is whether we will continue to participate at our 40% level or at a lower level.”
The joint venture agreement with Baobab at the Monte Muande project recently completed soil geochemistry and aeromagnetic surveys which indicated a possible magnetite concentration at the site containing 69% iron ore. The joint venture is structured such that Baobab may earn an increasing participatory interest in the project of up to 90% through funding three prescribed stages.
On April 10 2012 both companies announced the completion of Stage 1, earning Baobab a 60% holding in the project. Baobab said in a statement at the time that it is in discussions with North River as to its interest in participating pro-rata for Stage 2.
North River Resources also said key events are upcoming regarding its flagship Namib site in Namibia as it moves towards first production.
“The focus is very much [on] Namib,” French said. “We expect a number of operational announcements over the next six months. These include the commencement of drilling at the site, the release of updated resource estimates, completion of its Environmental Impact Assessment, completion of its feasibility study, submission of its mining licence application and progress with regards to financing.”
Namib is a disused lead-zinc-silver mine in Namibia, discovered in 1932 and mined to a depth of 200 metres but was closed due to low commodity prices, union problems and a lack of capital.
“We have de-watered it, cleared out the site, made the mine safe, fully surveyed it, took photos and completed channelling surveys underground,” French said.
French started his career at Merrill Lynch and has 25 years experience in international capital markets and the junior resource sector. He was journalist at Euromoney magazine and then as editor, launched Euroweek and later Asiamoney magazine in Hong Kong.
The Namib site in Namibia, with a current resource of 668,000 tonnes of indicated and inferred lead/zinc ore, was previously owned by Kalahari Minerals. Kalahari went on to be a uranium focused company and sold its majority interest in the site to North River. Last year, a Chinese strategic partner took over Kalahari and in so doing, inherited North River Resources; they cleaned out the management and brought in Martin, along with others.
The company, which was admitted to trading on the London Stock Exchange in December 2006, has put its flagship site on a fast track scheme towards reopening and believes the project has a range of key benefits, including the infrastructure nearby. The Namib site is less than an hours drive to Walvis Bay, the biggest port in the area, which services both Namibia and Botswana.
“There is a lot of infrastructure going through the site, including the TransNamib railway and the workers can be accommodated in Swakopmund, a town just 20 minutes from the site,” French said.
The site is currently carrying out its feasibility study at the site including a structural geological and geophysical review as part of the fast track process.
“At the moment it is a scoping study plus, we’re going to skip pre-feasibility and go straight to [the] feasibility study, which we’re programmed to do by March.” French said.
The company also wants to extend the size of the site and French said they have started a fairly extensive drilling programme to extend the site deeper and wider than it is at the moment.
One of the key goals before moving forward is the company’s environmental impact assessment which French said would be submitted to the Namibian Ministry of Environment next month. Following the completion of these goals the company said it will apply for its mining licence and get started with moving towards production at the site.
“The licencing process is pretty well advanced,” French said. “Once we’ve completed our feasibility study we’ll apply for our mining licence in March or April next year.”
The company said it is moving forward with financing at the site after it completed an over-subscribed GBP800,000 placing in September and even managed to raise money in April, a month when almost no junior mining company was able to achieve equity funding.
“We’ve already had the banks on site, we’re doing everything in advance to get the whole thing done super quick,” French said.
In September, the company announced its interim results in which it halved its pretax losses to GBP776,508 from GBP1.5 million as it lowered exploration expenditure to focus on the Namib site and decreased its administrative expenses.
The project includes 700,000 tonnes of tailings which are intended to be re-processed as a first step, beginning in the fourth quarter 2014 as long as its mining licence is approved by the end of the second quarter 2014.
Tailings are ground rock and process waste that are generated when processing ore. Mechanical and chemical processes are used to extract the desired product from these leftovers, leaving a discharged slurry which has been considered environmentally hazardous.
“You could open up this mine tomorrow if you had a plant,” French said. “It is a fast, cheap project. A relatively small mine where we only need to build the plant, which costs about GBP12 million including the tailings plant.”
North River Resources shares were down 9.56% to 0.633 pence Monday after the price almost doubled in three months from a low of 0.311 pence on July 18.
By Tom McIvor; tommcivor@alliancenews.com;
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