Sydney, Aug 5, 2008 AEST (ABN Newswire) - Tamaya Resources Limited (ASX:TMR)(PINK:TMAYF) has noted the volume of shares being traded in the past week, and the sharp decline in the Company's share price. The Company acknowledges and shares shareholder concerns regarding the share price and will hold a shareholder briefing session in Sydney after the release on the 19th August 2008, of the interim results for the 6 months ended 30th June 2008.
There are three principal concerns shareholders have at present:-
1. The first is the issue of cash availability and the Company's ability to meet its current financial commitments. Based on its current forecast and assuming current production rates and commodity prices, Tamaya has sufficient funds available to meet operational requirements in Chile, service debt and complete the business reforms in Armenia and Portugal. The majority of Tamaya's debt obligations are due in the 2010 calendar year.
2. The second issue is the matter of the anticipated non-cash write down of the Iberian acquisition. As was explained earlier in the year, it has transpired that the mineralisation at the Armenian project has proven to be more complex and difficult and, therefore, more costly to process than was anticipated during the acquisition process. On-going metallurgical test work on the Lichkvaz mineralisation aimed at trying to find a low capex concentrate route has not yet been successful to date and so the Company feels it is prudent to review the carrying value of the Iberian purchase. As previously explained, the Armenian project formed the basis of the Iberian investment. As it has not proven to be what was expected, and is not ready for development in the foreseeable future as a standalone business, it is prudent to cease spending funds on it and to write down its carrying value. The impairment, which is expected to be taken in the interim results, is gravely disappointing but necessary based on the current situation. Placing this project on care and maintenance while Iberian considers its strategy and funding options reduces the Company's expenditures and is considered a prudent measure.
3. Production at Punitaqui remains an ongoing concern for some shareholders. By way of update to shareholders, the month of July saw a consolidation of the mining of higher grade stopes delivering above budget grade of 1.38% Cu to the raw ore stockpile. The performance of the crushing circuit remains a concern, with poor availability reducing mill throughput for much of July. Corrective action taken to maintenance personnel and practices in the last week of the month evidenced a sharp improvement in availability which has continued into early August. Ore of above 1.50% Cu has been milled in the past week, demonstrating a positive trend in grade, copper recovery and concentrate grade, all of which will assist copper production and cashflow generation.
Mining
- Mining is tracking well to budget with grades above plan, and a large stockpile of raw ore available for crushing
Both crushing and milling have been below expectation due to poor availability of the crushing circuit in June and July. During July, corrective action was taken and an improvement in crushing rates in the last week of July has continued into August.
- Changes to maintenance personnel with more experienced and better skilled maintenance practitioners hired in July.
- Short term maintenance assistance from contractors on site for the installation of Mill 10.
- Review of longer term maintenance outsourcing is underway to ensure access to improved maintenance systems and skills.
- Consideration of a move to contractor operated crushing to introduce a crushing circuit more suited to the treatment of abrasive, silicified ores.
- Installation of Mill 10 will improve the reliability and availability of the milling circuit, while also reducing unit energy consumption and hence operating costs.
The daily ore grade trend over the past three months demonstrates a rapidly improving trend, and the success of the new mining plan based on increased development to access higher grade stopes. The average grade for the month of July, at 1.38% was above plan.
Tamaya expects plant availability to improve in line with the changes made to maintenance on site.
Interim Results Release
Tamaya will be releasing its interim results for the six months ended 30th June 2008 on 19th August 2008 and plans to conduct a shareholder briefing session in Sydney on that day.
The venue and time will be advised shortly. At that meeting, Tamaya will give a detailed presentation explaining the current economics of production at Punitaqui, and an updated outlook for the future.
Contact
Hugh Callaghan
Executive Chairman
Tamaya Resources Limited
Shareholder Information Line:
TEL: 1800 688 798
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