News & Analysis » UK

Arian Silver Corp, Astar Minerals, Baobab Resources, Black Mountain Resources news briefs

Contributed by Fox-Davies Capital

Arian Silver Corp announced that toll milling fully resumed on 16 February 2013. The toll mill is located 50km from the Company's San Jose mine in Zacatecas State in Mexico and is privately owned and operated by Beneficiadora de Jales y Minerales Juan Reyes SA de CV ("Juan Reyes"). The Juan Reyes mill is newly refurbished has a maximum capacity of 500t per day, and benefits from two separate flotation streams to extract zinc in addition to lead and silver concentrate. The contract with Juan Reyes gives exclusive use of the mill to Arian, is renewable by mutual consent and is initially for the processing of 90,000t of Run-of-Mine material from the San Jose mine; this should take approximately six months once the maximum daily throughput rate is achieved and maintained. The Juan Reyes mill commenced processing on 16 February 2013 with supervisory assistance from Arian personnel to help optimise processing to maximise material throughput and silver, lead and zinc recoveries. Separately, Arian has identified a second-hand processing plant which appears to be suitable for treating the San Jose ore. The Company will provide an update on these discussions as they progress.

Astar Minerals has announced that the Quadling Quarry in British Columbia, Canada has temporarily closed.

In this news:
- Due to the slow time of year and other operational issues
- The Board will make a further announcement in due course
- Dealings in the Company's ordinary shares remain suspended.

FD Comment:
The quarry normally produces crushed aggregates to local contractors and industry, but the Company does not have the working capital to keep it running in the current market. The Company formerly Pan Pacific Aggregates was suspended in November and was due to make a final payment of £250k under a CVA in December. Due to a lack of funds it wasn't able to do this and on 5th February asked creditors to accept £75k. A decision on this is due at a meeting of creditors on 27th February.

Baobab Resources has released a PFS update on its Tete VTM iron project in Mozambique.

In this news:
- Most study components have been peer reviewed and finalised with summary documentation underway
- Resource upgrade estimations have been completed at the Ruoni North and Tenge blocks, the results of which will be announced shortly. The Ruoni South re-estimation is currently underway
- The Definitive Feasibility Study (DFS) drilling programme commenced at Tenge on 2 February 2013. The objective of the programme is to elevate resources to a 'measured' category as well as collect representative material for the next round of metallurgical test work
- Beneficiation and pyro-metallurgical studies have been largely completed, including side studies into the treatment and upgrading of vanadium and titanium by-products. Bench scale reduction and smelting test work, using concentrates derived from Tenge iron ore and local thermal coal products, is ongoing at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) laboratories in Australia
- The Environmental Impact Assessment (EIA) scoping study and public consultation process is complete, with the environmental licence application being lodged shortly. Wet season baseline studies, which are fundamental to the EIA work programme going forward, are scheduled for March
- Infrastructure, freight, marketing and mining studies, including mine scheduling, pit optimisation, geotechnical and hydrogeological studies, have been completed.

FD Comment:
This is a busy time for the Company. With the bulk of the PFS complete, today's announcement is just a holding statement whilst the Company waits for completion of the capex estimates. Alongside the capex estimates, the metallurgical results and infrastructure will be the key components for us. Whilst these are being finalised the Company is progressing with the DFS drilling programme, which is progressing and expects to release the Ruoni North and Tenge resource upgrades shortly.

Black Mountain Resources Ltd. announced that it has settled its exclusive long term (45 year) lease over the Lakeview Mill and its acquisition of the historic Weber Silver Mine and Keep Cool Silver Mine claims. In consideration of the acquisition, the Company has issued 11M ordinary shares to Shoshone Silver / Gold Mining Corporation. The Company recently upgraded the facilities at the Lakeview Mill and its key items, including an additional ball crusher and flotation circuit, and the mill is now capable of processing over 300t of ore per day. The mill will be used to process ore mined from the Company's Conjecture Silver Mine in Idaho following targeted first production in Q2 2013. Black Mountain intends to use the Weber Pit for waste disposal from the Conjecture Silver Mine. In addition the Company intends to undertake initial geological and geophysical work over the two historic assets acquired, in particular targeting the intersection of the Conjecture and Weber shear zones to identify further drill targets as part of the exploration programme planned for Q2/Q3 2013.

FD Comment:
Having completed the acquisition of the Lakeview Mill, which would cost over US$8M to replace and a minimum of two years to permit, Black Mountain is ideally positioned to commence high grade silver production from the historic Conjecture Silver Mine in Idaho in Q2 2013. As the only permitted mill in the region, and with a processing capacity of 300t per day, this is a highly strategic addition to the Company's portfolio and will meet its production requirements going forward. Also, the addition of further mining claims provides the Company with exposure to exploration upside potential and a waste alternative for the Conjecture project.