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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: jennifersilversun who wrote (54985)	1/4/2008 12:55:55 AM
From: jennifersilversun	of 78427

Here's text of article/interview on EPM, courtesy of mexico mike's forum aka smartinvestment.ca January 03, 2008 European Minerals Prepares For the Cold in Kazakhstan By Rob Davies Chairman Tony Williams and chief executive Bert Kennedy of TSE and AIM listed European Minerals certainly know how to run a junior resource company. When Minews asked Bert what was the reason for the recent £10million private placement with Cannacord Adams when production is just about to start, he responded by saying it is very cold in northern Kazakhstan. Right now while the UK copes, just about, with temperatures around freezing it is minus 28 degrees at the Varvarinskoye mine site. He reminded Minews that while the process plant is totally enclosed and has an interior air temperature of five or six degrees it would only take a frozen pipe somewhere to cause a major delay. Despite having US$18million of unrestricted cash in the bank and US$3.8million of the debt facility unused at the end of September they thought it prudent to top up just in case they experience commissioning problems in the New Year. With only US$12.7million of capital commitments remaining it looks as if the company is through the worst. However, the international credit crisis is not helping. European Minerals has US$61million of debt facilities with interest rates linked to Libor. Most of it is at Libor plus 2.8 per cent with US$18million at Libor plus 1.25 per cent. Bert wouldn’t be drawn on exactly how things are playing out, but clearly the company will be impacted by changes in Libor and in the current environment those effects will be more negative than positive. Hopefully, the combination of funding should now be sufficient. Bert’s forecast that the first gold pour from the gold processing line would take place before the end of December was met on December 22nd so he had just time to get home for Christmas after entertaining local dignitaries at the mine. He went out of his way to praise the men on the ground, Project Manager Alan Baker and Technical Director Howard Nicolson, for making such good progress in getting the project to where it is now. Everything is now in place and he says the company has not experienced significant cost overruns. Cold commissioning of the plant started in October and hot commissioning, the introduction of ore, started a month later. The gold process line will be the first to start and has resulted in gold being poured before the end of the year. However, the main one, producing copper concentrate, will take longer and won’t get going until the first quarter of 2008. As Bert says commissioning in winter is not ideal but the plan is to build up to full production of 4.2 million tonnes a year by the second quarter of 2008. Currently he is pleased to report that there is ore in the mills and cyanide in the tanks so there is no reason not to expect the target to be met. While this work is going on inside additional drilling is underway in the pit with two rigs. This exercise is aimed at identifying incremental mineralization within the current mining limits and beneath the planned bit bottom. After more difficulties than most new mines have experienced European Minerals is now only close to metamorphosing from explorer/developer to producer. Its market capitalization of around £170 million suggests that its valuation has already made that transition. The test now is whether reality lives up to expectations. minesite.com

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