Georgian Mining Corporation (LON:GEO), the gold-copper exploration and development company, announced today an update on the Company’s operations at its joint venture project in Georgia.
Appointment of Hannam & Partners
The Company has recently received a number of approaches from financial and strategic investors looking to make a potential significant investment. At the same time, GEO is reviewing opportunities presented within the Tethyan Belt, focused on regions close to its existing licence portfolio. As a result GEO is pleased to announce it has appointed Hannam & Partners as its financial advisers with a focus on these strategic opportunities and M&A.
Hannam & Partners is a prominent boutique investment bank headquartered in London. The firm offers specialist advice to public and private corporations, financial investors and sovereign entities. The core sector focus are metals and mining, energy and financial services.
Exploration Permit Extension
The Company is also pleased to announce that it has recently concluded a negotiation process with the Mining Agency in Georgia to extend the exploration permits for the various deposits and the wider licence area, and the final application has been agreed. The Company’s JV vehicle, Georgian Copper & Gold, holds a 30-year mining licence for the extraction of minerals (expiring 13 October 2041). Within this overall licence exists a requirement for separate staged permits for continued exploration at named deposits and within the wider licence area. The final stage is the submission and approval of a Government Resolution which formally approves the application. The recent unexpected resignation of the Prime Minister and the cabinet on 13th June 2018 is delaying this process, but on 20th June an interim new Prime Minister and Cabinet was appointed. However, as agreed with the Mining Agency and our partner, the Joint Venture Company has temporarily suspended fieldwork until the Government Resolution is approved. We are actively looking at options to secure additional drilling capacity to recover any delays. The 2018 work programme remains fully funded; the burn rate while drilling is suspended is very low (for example, there are no drilling standby charges). The Company is monitoring the situation closely and will provide further updates as and when we receive further information.
The Georgian team under the new leadership of Simon Cleghorn, Technical Services Manager, is making good progress, advancing technical work in conjunction with our partners Caucasian Mining Group. The plan towards production at Kvemo Bolnisi East remains unchanged, ie. infill drilling, metallurgical testwork, environmental and other studies. The Company is in discussion with its JV partners and other drilling contractors to secure additional drilling capacity to recover any delays. A key milestone in this process, the Mining and Production Agreement, is largely dependent upon the metallurgical testwork and will be resolved prior to the completion of a Feasibility Study. The Company also notes that the first meeting of the new JV company Board, which was part of the updated Shareholder Agreement announced in March 2018, was recently held in Tbilisi.
Mike Struthers, Georgian Mining Corporation Chief Executive Officer, said “We are obviously pleased to have a group of the calibre of Hannam & Partners assisting us. Georgian has had a number of joint venture or investment proposals presented to us recently, and this could be a pivotal period as we consider these in parallel with continuing to advance our core asset in Georgia towards production. We believe it is important to bring the specialist expertise of Hannam & Partners to the Company at this exciting time. Hannam brings a wealth of contacts, deal structuring expertise and access to large pools of capital. We are looking forward to working with them over coming months.
I’m also pleased to report that as a result of some very hard work in close cooperation with our JV partner we have completed our negotiations with the Mining Agency to extend our permit to explore the Bolnisi JV mining concession in Georgia. We are hopeful the new Ministerial appointments will be resolved smoothly and remain confident the necessary approval will be forthcoming, allowing us to push on with our 2018 work programme. We remain confident in and committed to our Georgian projects.”