Kemin Resources rockets on increase resource estimates

10th Dec 2013 12:26

AIM-listed Kemin Resources, a molybdenum and tungsten exploration and development company, saw its share price leap on Tuesday after pre-feasibility studies on its two wholly owned deposits, Drozhilovskoye and Smirnovskoye, confirmed the technical and economic viability of both projects.Drozhilovskoye's updated resource estimate is 139.8m tonnes of ore, while Smirnovskoye is now estimated to contain 170.5m tonnes. The firm said it anticipated a significant portion of the resource would be converted into the JORC-compliant resource category, subject to financing. The mine life is estimated at 30 years for Drozhilovskoye and 36 years for Smirnovskoye. Together the projects are expected to require core capital expenditure of $267.4m. The definitive feasibility study is expected to begin immediately, with completion targeted for the second half of 2014. The company said the projects have "robust" estimated economics with a net present value (NPV) of $1.55bn, applying a 9% discount rate, adjusted for inflation. Altynbek Orynbassarov, Chief Operating Officer of Kemin Resources, said the study provided crucial reassurance to enable the company to swiftly progress to a definitive feasibility study and ultimately the future development of the two projects.He added that the resource estimates confirmed management belief that the two projects were among "the most exciting molybdenum and tungsten projects awaiting development in the world". "We have the opportunity to develop substantial rare metal projects that will, in our view, deliver significant long term profits to our shareholders in the years ahead."The share price rocketed 75.68% to 16.25p by 12:45. NR