SurfaceMine-1
Surface Mine Stage 1 – view1
SurfaceMine-2
Surface Mine Stage 1 – view2
SurfaceMine-3
Surface Mine Stage 1 – view3
SurfaceMine-4
Surface Mine Stage 1 – view4
Surface Mine Stage 1 – view5
Surface Mine Stage 1 – view5
Stage 1
Surface Mine Stage 1 – view6
Aerial view of ROM pad and Process Plant
Aerial view of ROM pad and Process Plant
Aerial view of Process Plant
Aerial view of Process Plant
ROM Pad
ROM Pad
RSI
RSI - spillway view
RSI - pond view1
RSI - pond view1
RSI - pond view2
RSI - pond view2

Latest News

13/06/2016 -- Runruno Gold Dore PourRead More
25/05/2016 -- Annual Results 2015Read More
25/05/2016 -- Notice of Annual General MeetingRead More
25/05/2016 -- Chairman’s Letter to ShareholdersRead More
25/05/2016 -- Form of Proxy for AGMRead More
11/05/2016 -- Runruno Gold Project updateRead More
07/03/2016 -- Partial Suspension Order UpdateRead More

Metals Exploration Plc

LATEST NEWS

Q4 2017 Operational Update

Summary

Mining Operations

  • Mining operations continue to perform well at forecast levels.
  • Construction of an overflow waste dump underway which, when commissioned, will further improve mining efficiencies.
  • At the end of the quarter the ROM pad held six weeks' processing ore tonnages.

Processing Operations

  • 11,236 ounces of gold were poured during the quarter, an improvement on 9,085 ounces poured in Q3.
  • The process plant, with the exception of the BIOX circuit, is operating at above design throughput levels with good mechanical reliability.
  • The ramp up of the BIOX® circuit continues to be challenging and limiting gold recovery. Encouraging improvement has been seen in January.

Finance

  • 10,612 ounces of gold were sold during the quarter at an average realised gold price of US $1,267.45 per ounce.
  • Poured gold doré inventories at 31 December 2017 totalled 1,987 ounces.
  • Cash at bank at 31 December 2017 was US $502k.
  • Total interest-bearing liabilities as at 31 December 2017 were US $89.80 million.

Production Summary

Mining Operations Table

The mining operations continued to perform well in Q4 2017, mining higher grade but harder ore from the stage 1.5 area of the pit. Blasting has been required in this area of the pit to efficiently mine the ore and waste. 1.7 million tonnes (ore and waste) were mined at a strip ratio of 2.5:1. Outside of the pit the mining fleet was used to advance the development of the overflow waste dump at Tullingan .

The Tullingan works comprised cutting and developing access roads, constructing buttresses and establishing an underdrain. Heavy and prolonged rain across the quarter slowed progress but the site will be ready to take waste in Q1 2018. Commissioning of the dump will further improve mining efficiencies.

Over the quarter mined gold grades improved to average 1.83 grams per tonne. At the end of December the run of mine ore pads were at capacity holding in excess of 230k tonnes of ore grading 1.71 grams per tonne gold equivalent to six weeks' processing requirements.

Process Plant

The period Q4 2017 was once again a challenging one for the process plant ramp up with the BIOX circuit not performing as expected. Following a maintenance programme on the BIOX reactors, focused mainly on cleaning the air sparge system, encouraging improvement has occurred in January .

The balance of the processing circuit continued to perform well, generally above design throughput. As a direct consequence of the BIOX performance the process plant recovery was below the ramp-up expectation at 50.8% .

Residual Storage Impoundment ("RSI")

RSI construction works in stage 4 are at an advanced stage while stage 5 works are well established.

The Tullingan overflow waste dump when ready will be of assistance to accelerate the RSI works during the upcoming dry weather months. Investigations are ongoing on the use a barrier material in the construction of the core area of the wall, as previously reported.

Occupational Health & Safety

Normal operations with no lost time incidents reported.

Environment and Compliance

The operation remains compliant with all environment and regulatory requirements with no incidents recorded. It maintains very high environmental standard.

Community & Government Relations

Productive relations with both the community and the government have been maintained.

Finance (Unaudited)

  • Net 10,612 ounces of gold were sold during the quarter at an average realised gold price of US $1,267.45 per ounce;
  • Poured gold inventories as doré at 31 December 2017 totalled 1,987 ounces;
  • Interest payments of US $1.9 million were made to the senior lenders in the quarter;
  • A capital payment due to senior lenders on 30 September 2017 of US $6.48 million settled through the bank in the quarter on 3 October 2017;
  • A capital payment due to senior lenders on 29 December 2017 of US $6.48 million was waived and discussions are in progress to reschedule this payment.
  • The company and its senior lenders have agreed to work together to restructure the senior debt facility.
  • On 3 January 2018 the Group made a payment of US $69.8k in settlement of gold hedging totalling 7,500 ounces that matured in the quarter with a fixed price of US $1,287.19 per ounce but achieved a strike price of US $1,296.50 per ounce on 29 December 2017;
  • Remaining forward sales of gold ounces total 15,000 ounces and two quarterly contracts remain outstanding each at an average forward price of US $1,287.19 per ounce of gold;
  • Total interest bearing liabilities as at 31 December 2017 were US $89.80 million; and
  • Cash at bank at 31 December 2017 was US $502k. The movement in cash balances during the quarter is summarised as follows:
Table

- E N D -

Metals Exploration is a natural resources exploration and development company operating in the Pacific Rim, with particular focus on the Philippines.

The Company’s principal asset is the Runruno Gold-Molybdenum Project on the island of Luzon in the northern Philippines. The Company acquired the project in February 2005 and recently increased its interest in the project to 100%.

Work to date has a defined mineral resource of 1.39 million ounces (Moz) of gold, and 25.6 million pounds (Mlb) of molybdenum with 1,050,000oz gold reporting to the Measured and Indicated categories and 900,000oz gold within the Mining Proven & Probable Reserve category. For further information please see the Runruno Resource page.

In October 2011, the Runruno Declaration of Mining Project Feasibility ("DMPF") was approved. This paved the way for the Project to move forward to development and construction phase. Early project development works have began in January 2012.

In May 2010 the Company announced the results of the Runruno project Feasibility Study which confirmed the viability of the project, projecting average production of 96,700oz of gold per annum over a mine life of 10.4 years, at an average forecast operating cost $477/oz gold before any molybdenum credits. The capital cost is forecast to be US$149.3 million, with payback within 3.5 years at US$1,000/oz gold. The Runruno project will be an open pit operation, and will use the proven BIOX® and carbon in leach processes to recover gold and molybdenum.

In March 2010 the Company announced the award of the Environmental Compliance Certificate (ECC) for the Runruno project, which was issued after satisfactory evaluation of the project’s Environmental Impact Statement by the Philippine Environmental Management Bureau. The ECC process was conducted with the full participation and involvement of the local community, and under the ECC the Company is committed to implement measures to protect and mitigate against any adverse impacts on the health and welfare of community and the environment. Securing the ECC is a significant point, following the award of the Financial or Technical Assistance Agreement, demonstrating continued support from the Philippine Government for the development of the Runruno project.

In October 2009 Metals Ex reached an important milestone as the Financial or Technical Assistance Agreement (FTAA) was signed by Executive Secretary Eduardo Ermita on the authority of the President of the Philippines. Under the terms of the FTAA, FCF Minerals, the Philippine subsidiary which operates the Runruno Project, is granted the exclusive right for 25 years to explore, mine, process and export minerals from the licence area. In exchange for this right, FCF is required to commit a minimum investment of $50 million in project development, much of which will be spent on local infrastructure benefiting local communities.

Metals Exploration works hard to maintain excellent relations with the local communities in the project areas. FCF Minerals promotes social and economic development through the Runruno Livelihood Foundation, a trust funded jointly by the Company and the Philippine government. We also conduct all our operations in a safe and environmentally responsible manner to industry best practise standards.

Metals Exploration Plc is publicly listed company on the London Stock Exchange and admitted to the Alternative Investment Market (AIM:MTL) on 22 October 2004.

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