This is reassuring. Some UK outfit just came back from a site visit to the fabled mine-in-progress:
research.aton.ru
If the link doesn't work this is the summary:
8 November 2006, Wednesday
European Minerals. Site visit confirms continued progress
Documents
Full version (PDF; 114,02 kB)
"European Minerals yesterday reported neutral 3Q06 CA GAAP results, including a net loss of $2.1mn, which is an improvement of 11% on the net loss of $2.4mn the company posted for 2Q06. SG&A costs fell 40% q-o-q, mainly due to stock-based compensation of $1mn in 3Q06 compared to $2.8mn in 2Q06. However, the company reported a foreign exchange loss of $0.3mn (following a gain of $1mn in 2Q06).
The company reported capex of $18mn for the development of its Varvarinskoye gold/copper project near Kustanai, which pushed the company’s cash position down to $21mn at end-3Q06. Subsequently, the company secured $75mn in financing.
Our visit to Varvarinskoye last weekend reassured us the project is coming along well, despite the company’s recent announcement that the plant’s commissioning has been delayed. All of EPM’s mining fleet was on site, continuing with pre-stripping and preparing the ground for the stockpiling of ore.
The trucks consume about 15,000 liters of diesel per day, using fuel purchased at $0.50/l-$0.70/l from refineries in Russia (2.5-month bulk purchases).
Civil engineering work on the water storage and tailings dam is nearing completion. A newly constructed 70km power-line will provide electricity at 2.8USc/kWh (under a fixed-price five-year contract).
A delay in the delivery of structural steel from Russia pushed the installation of plant equipment back to April 2007. Although this November’s unusually mild weather (as the pictures show) allowed more work to be done on site, the lack of steel beams means the plant is unlikely to be completed before October 2007.
As of end-October, European Minerals had spent a total of $95mn on the project and plans to spend another $63mn before the plant’s scheduled commissioning in October 2007.
We view the continued progress on site as positive and reiterate our Buy recommendation on European Minerals, with an end-2007 fair value of $1.28."
I registered and still couldn't access the pdf report this is taken from. Maybe someone else can have better luck. |
