(MENAFN- ProactiveInvestors)INTRODUCTION In the news: North River Resources & GB MInerals There are important releases out for two of our stocks: North River Resources† (LON:NRRP) and GB MInerals†† (CVE:GBL). I'll start with North River. Following announcements made on 11 August and at the General Meeting on 28 August the Open Offer is commencing as of today. The funding plan is US$4m which is fully underwritten by the company's main shareholder Greenstone Resources LP. Some US$1.2m of this equates to 29.5% of the capital raise and maintains Greenstone's weighting in the stock so the offer is for the 'rump' US$2.8m. Details are as follows: The Open Offer is to all eligible shareholders at 0.2p/ordinary share. There are 2 Open Offer shares for every 3 existing ordinary shares held. If the Open Offer does not raise the full US$2.8m RFC Ambrian will place the balance at no less than 0.2p. If there is a further shortfall then the rump will be underwritten by Greenstone guaranteeing the full US$4m will be raised. A number of the directors including CEO James Beams have committed to subscribe to the placement to the tune of approximately £135000. A circular has been posted today and can be accessed on the North River website — www.northriverresources.com. The capital raise is set to: fund initial front-end engineering and design (FEED); begin early development of the Namib northern decline; source plant and equipment; establish the next phase of resource expansion drilling; and recruit technical and operational staff at the Namib Project. If you have any questions please call your RFC Ambrian contact. Numbers are shown below. GB MInerals released a feasibility study after the market close in Canada last night. This company is developing the (very) high-grade Farim Phosphate Project in Guinea-Bissau. Jim Taylor and Imogen Whiteside comment on this further below but the key highlights are a final product grade of 34% with overall mass recovery of 75.5% and final P2O5 recovery of 78.5%. Resources show an initial 25-year mine life with production of 1.75Mtpa and final rock phosphate production of 1.32Mtpa. The initial capital cost comes out at US$193.8m. Cumulative net cashflow post-tax is US$1.9bn NPV post-tax is US$437mn and IRR is 34.5% with a 4.3-year pay-back. Operating costs come to US$52/t over the life-of-mine and US$46/t over the first seven years of production. More detail can be found in the announcement but this is an extremely solid set of figures. They back up GB's main shareholders' — Aterra and Alpha Infrastructure — belief in the project's economics. If you would like to take a meeting with CEO Luis da Silva he is always ready to make himself available. METALS & MINING EQUITIES GB MInerals†† — Completes Positive Updated Feasibility Study — The TSX-V-listed company that is focused on advancing the Farim Phosphate Project in Guinea-Bissau has announced the main findings of the recently-completed updated feasibility study on the project. The company has also filed the associated technical report. The study considered the development of an open-pit mining operation feeding 1.75Mt of ore grading 30.0% P2O5 to an upgrading plant to produce 1.3Mtpa of concentrate product grading 34.0% P2O5 over a mine life of 25 years. Estimated operating costs were reported to be in the first quartile of industry costs at US$52/t FOB. Sustaining cash costs are forecast to average US$63/t over the life of the operation. Capital costs including contingencies and owners costs were estimated at US$205m equivalent to a capital intensity of US$158/tpa of capacity. Financial evaluation was undertaken using a long-term reference price for phosphate rock of US$123/t FOB for a benchmark Moroccan K10 product grading 32.0% P2O5 (vs. the current price of US$115/t); it was assumed that the higher-grade Farim product would command a premium of 9.7% to the benchmark on account of its quality over the first seven years of the operation and a premium of 4.7% over the remainder of the project's life. Assuming inflation of 2% pa the resulting nominal post-tax NPV10 was US$437m and the post-tax IRR 34.5%. The company noted that discussions were underway with both potential off-takers for the product and also with potential providers of debt for the project's development. RFC Ambrian Comment: The results of the updated feasibility study were very positive and substantially improved upon the results of previous studies. The Farim Project is a high-grade deposit that benefits from not requiring blasting in the pit or crushing and grinding in the processing plant. Also upgrading does not require costly flotation but is undertaken by washing and sizing alone. These factors more than offset the relatively high strip ratio and lead to very low projected operating and capital costs. The completion of the study paves the way for the project's development. The next steps include completion of permitting securing off-take contracts and project financing. Corporately we note that a dispute over a C$9.8m claim for fees payable to a consultant will reach court on 30 November. We also note that at June 2015 in addition to the claimed fees the company had net accounts payable of C$6.6m and we estimate that there is a further C$3.6m in short-term debt payable to its major shareholders. We expect that these issues will need to be resolved and the balance sheet normalised prior to the completion of any equity portion of a project financing. We will provide more details on this announcement and an outlook for the company after further review.
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