Hambledon achieves “record levels of extraction” in H1 2011

Sep 27. Proactive Investors UK

By Jon Mainwaring

Hambledon achieves “record levels of extraction” in H1 2011Kazakhstan-focused gold miner Hambledon Mining (LON:HMB) said that open pit operations at its Sekisovskoye project performed well during the first six months of 2011, with record levels of extraction being achieved.

The firm, which released its interim results today, said that gold production at Sekisovskoye was 9,769 ounces (H1 2010: 9,669 ounces).

A programme of improved maintenance and the reorganisation of open pit mining activities, together with an enhanced incentive scheme, has seen monthly waste extraction sometimes exceed 400,000 tonnes – an improvement of 25 per cent over 2010. Hambledon said that increased waste extraction has been necessary to ensure access to all mine working areas of the open pit.

The 7.3-to-one waste-to-ore stripping ratio seen so far in 2011 will remain at high levels until the end of the year, with significant reductions to a level of 4:1 expected in Q1 2012. The consequence of this has been a much higher overall cost of production, but this will return to a lower level once normal open pit extraction schedules are resumed, said Hambledon, which added that approximately ?900,000 was spent in the first six months of the year in removing this excess waste.

Hambledon said that its processing operations in 2011 have continued smoothly and without interruption. Process plant throughput was 361,000 tonnes for H1 2011, with the average grade of gold being 1.03 grams per tonne.

Export of previous metals from Kazakhstan was interrupted during June, July and August due to a delay in implementation of regulations required by the Russian, Kazakhstan and Belarus customs union. However, the higher gold price at the time of eventual export and sale resulted in greater revenue for the dor? produced during this period.

At Hambledon’s underground project development of the surface decline to the 320 mrl level is progressing “on schedule and within budget”. The decline has intersected the upper zones of Ore Body Number 11 and drilling to delineate the ore zones prior to mining has begun.

The decline is due to intersect the 320 mrl tunnels by the end of this year, and it will enable flow-through ventilation and an improved mine environment necessary for underground mine extraction. Geological works on the 320 mrl are progressing well, with approximately 8,000 metres of diamond drilling completed. The results confirm the grade of the underground ore and have shown there are wider zones of gold mineralisation.

Recently, Hambledon also announced it had bought Akmola Gold – which owns two precious metals projects both situated in central Kazakhstan. These have combined resources of some 440,000 ounces of gold plus silver and other metals.

During H1 2011 the firm’s operating loss of ?1.4 million (H1 2010: ?73,000 profit), while cash at the end of June was ?4.1 million (June 30 2010: ?1.1 million).

Hambledon Mining Plc is a gold mining company producing approximately 26,000 ox gold annually at the Sekisovskoye open pit mine in East Kazakhstan. At the same time it is developing the high grade underground deposit at “Seki” from where the majority of the 2.0m oz JORC resource derives. Underground mining will commence at the end of 2011 and will ramp up to 100,000 oz by 2016. The open pit mine has sufficient resources until 2014. The company is debt free and recently completed a ?9m fund raising primarily designed to drive down costs.

A 25,000m drilling campaign is currently under way to validate and improve the resource category.

Further enhancements to the asset base can be made in Kazakhstan through acquisition.