News & Analysis » UK

Berkeley Mineral Resources, Churchill Mining, Firestone Diamonds, Goldstone Resources news briefs

Contributed by Fox-Davies Capital

Berkeley Mineral Resources PLC announced it has agreed to amend the terms of 127,916,666 warrants issued in connection with the acquisition of stockpiles of lead and zinc tailings at the Kabwe Mine announced on 28 March 2011. Due to the announced delay it has been agreed that that the exercise period has been extended from 24 October 2012 for a further six months until 24 April 2013.

Churchill Mining plc announced that the Group incurred a loss for the year of US$10,443,956 compared to a loss of US$38,278,947 for the previous year. The 2011 result included an impairment of the value of the EKCP of US$27,897,416. The basic loss per ordinary share for the year was 8.61c compared with the loss per share of 38.57c for the previous year. Significant expenditure items during the period include:

- Legal and professional fees of US$2.64M (2011: US$3.32M) which includes significant costs incurred to protect the EKCP licenses and then the subsequent filing of its claim in international arbitration against the Republic of Indonesia;
- Consulting, directors and professional fees of US$2.18M (2011: US$2.55M);
- Exploration and evaluation expenditure of US$1.46M (2011: US$27.89M); and
- Public relations and media outreach programmes US$1.26M (2011: US$0.030M);

Most of these expenses occurred as the Company has continued to actively protect its interest in the East Kutai Coal Project following the negative ruling from the Samarinda Administrative Tribunal wherein Churchill sought to overturn the East Kutai Regent's decision to revoke the EKCP licenses. Churchill's appeal of this decision to both the Administrative High Court in Jakarta and the Supreme Court of Indonesia was unsuccessful.

Firestone Diamonds has released the SAMREC compliant Definitive Feasibility Study for its 75% owned Liqhobong Diamond Project in Lesotho. This is a very positive DFS from Firestone with a post tax IRR of 40% and NPV8% of circa US$335M. Production is forecast to commence in 2015 with an average annual production of 1.2m carats (3.6Mt ROM) over the 15 year mine life. Assuming a US$100/ct (escalated at 3%pa) average diamond price the Company has projected a 28 month payback period. The Company is "progressing discussions with debt providers and considering other marketing arrangements to minimise dilution to shareholders", which suggests to us that there will not be a major equity raise despite the capex requirements.

Goldstone Resources has released the final drill results from its recently completed drilling campaign at its Homase/Akrokerri project in Ghana. The results confirm further depth extensions of the Homase/Akrokerri gold resource along 700 metres of strike with the best intersections being 30.4 metres @ 1.8 g/t, including 8.2 metres @ 3.9 g/t, 10 metres @ 2.2 g/t, 6.6 metres @ 2.2 g/t and 12.2 metres @ 1.5 g/t. The current resource is 502koz Au @1.74g/t and these latest results have been submitted to SEMS Exploration Services Limited to update the resource estimate.