6th Jul 2005 16:29
Thistle Mining Inc.06 July 2005 Restructuring and Trading Update Toronto, July 6, 2005 - Thistle Mining Inc. ("Thistle") (TSX: THT and AIM: TMG) On June 30, 2005 Thistle completed its restructuring under the Companies'Creditors Arrangement Act ("CCAA") by implementing its plan of compromise andreorganisation (the "Plan"). Also on June 30, 2005, at Thistle's request, trading in Thistle's common shareson AIM was suspended pending the completion of logistical procedures related tothe implementation of the Plan. As previously announced on July 1, 2005 Thistlehad anticipated that these logistical procedures involving the Depository TrustCompany in North America required to reflect the changes to Thistle's sharecapital within CREST following implementation of the Plan would have beencompleted by such time as to enable new common shares issued pursuant to thePlan to be admitted to trading on AIM with effect from July 6, 2005. However,due to circumstances beyond the control of Thistle, these procedures have notyet been completed and therefore it is appropriate to maintain the temporarysuspension of trading in Thistle's common shares pending completion of theprocess. A further announcement will be made when Thistle is in a position toadmit the new common shares to trading on AIM. During the period that Thistle was restructuring under the CCAA, its seniorcreditor, Meridian Capital Limited ("Meridian"), as the debtor-in-possessionlender, funded the operations of Thistle in the amount of approximately US$21.8million. These funds were primarily used to finance the following: South Africanoperations, US$14.5 million; Philippine operations and feasibility study, US$2.5million; debtor-in-possession loan interest and funding fees US$1.8 million;restructuring costs US$1.4 million; general administration costs, US$1.2 millionand payment to certain creditors , US$0.3 million. As of today's date, Thistlehas a cash balance of approximately US$0.6 million. A board meeting has beenscheduled for July to discuss and arrange bridging financing to meet theimmediate cash needs of the South African and Philippine operations. South African Operations In common with other South African producers, Thistle's President Steynoperation continues to face challenging operating conditions and requiresadditional funding. The Rand remained strong for most of the six-month period ended June 30, 2005,though there was some currency weakness in the second quarter of 2005 due, inpart, to the strength of the US dollar against most other currencies. Thisstrength against the US dollar remains a key adverse factor in affecting themine's profitability. Gold sales during the five-month period January to May at President Steynamounted to 73,400 ounces at a realized sale price of US$426 per ounce. The cashcost of production remains high with the cash operating cost averagingapproximately US$550 per ounce. The following steps have been taken with a view to restoring the mine'sprofitability: • Two of five operational shafts, Shafts No.7 and No.9, were put undercare and maintenance; • Operations are now focused on high grade areas which include thebringing forward of the mining of No.1 and No.2 shaft pillars; • Continuous operations were implemented at No.3 shaft by redeployinglabour from No.7 and No.9 shafts; and • Limited production of approximately 500 to 1,000 tonnes per day hascommenced in a high grade section of the Eldorado reefs at No.3 shaft. This reefhorizon will require full exploration through an underground explorationprogramme before a determination is made as to how this prospective reef horizonis best to be exploited. As previously announced on June 30, 2005, the board appointed Gerrit Kennedy asits new CEO and Andy Graetz as its new CFO. Andy Graetz commenced his employmenton July 1, 2005, and Gerrit Kennedy is expected to commence his employment onAugust 1, 2005. Both appointees have considerable hands-on deep level SouthAfrican gold mining experience. The new management are evaluating all strategicoptions with a view to restoring the South African operations to profitabilityand to minimising the immediate cash draw. Management proposes to makerecommendations to Thistle's board of directors as to the appropriate strategicdirection of the South African operation, during August 2005. Philippine Operations The funding provided to the Philippines was mainly used in the drillingprogramme, the feasibility study, acquisition of additional land for thetailings dam for the mine site and completion of general mapping of the Coloradoand Dabu-Panique areas together with the validation of existing records. In the six months ended June 30, 2005, the Philippines completed approximately8,150 meters of reverse circulation ("RC") and approximately 1,500 meters ofdiamond core drilling at its Masbate property. The remaining 2,000 meters of RCdrilling and 500 meters of diamond drilling should be completed in the nearfuture. Work by Australian consultants, Ausenco Ltd, together with input fromsub-consultants Knight and Piesold, Sinclair Knight and Merz, and InternationalMining consultants continued throughout the six month period ended June 30,2005. The feasibility study completion is targeted for the end of October 2005. In addition, work was completed on revisions to the Environmental Protection andEnhancement Program and the document was re-submitted to the Government forfinal approval. This document covers all environmental issues for the life ofthe mine and it was given conditional approval following a presentation to theDepartment of Energy and Natural Resources during the latter half of 2004. For further information, contact Paul Marchand, Company Secretary, +44 207 4946060. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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