4th Dec 2008 07:00
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Press Release |
4 December 2008 |
Aricom plc
("Aricom", "the Company", or "the Group")
Kuranakh Project Update
Aricom plc (LSE: ORE, OREW), the Anglo-Russian developer of mineral resources, announces that it is making changes to the operational plan for the Kuranakh project in response to current market conditions.
Operations at Kuranakh involve mining, crushing and screening in order to generate a pre-concentrate. During 2008, Aricom has been selling the pre-concentrate at prices which have generated a positive contribution. The Olekma beneficiation plant, once commissioned, will upgrade and divide this pre-concentrate into iron ore (titanomagnetite) and ilmenite concentrates.
Given the current market conditions, the Board believes that the value of the project, as a whole, is best served by suspending sales of pre-concentrate to await commissioning of the Olekma plant in mid-2009 and, in the meantime, scaling back mining activities in order to minimise operating costs. Aricom expects that the capital expenditure required to finalise the Kuranakh project will be c.US$30m.
Commenting on this announcement, Jay Hambro, Chief Executive, said:
"Realising initial income from Kuranakh has been a considerable advantage and it is unfortunate that the market no longer supports the economic value in sales of pre-concentrate. Despite this short term setback, we are confident that the Kuranakh project will be a profitable contributor to the Aricom portfolio when the Olekma plant is commissioned in 2009 to realise sales of the higher margin iron ore and ilmenite concentrates even in this depressed market for all commodities."
For further information:
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Aricom plc |
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Charles Gordon, Investor Relations Officer |
Tel: +44 (0) 20 7201 8939 |
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www.aricom.plc.uk |
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Abchurch |
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Charlie Jack/ George Parker |
Tel: +44 (0) 20 7398 7719 |
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www.abchurch-group.com |
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