Taking a mine into production is usually a long and painful journey that involves plenty of twists and turns along the way. But AIM-listed North River Resources (LON:NRRP) is making the job look easier than most and is hurtling towards becoming a revenue-generating company. More encouraging drill results on Thursday from the historic Namib lead, zinc and silver mine, which the company is bringing back into production, grabbed investors’ attentions, driving the share price up to 0.76p. The company said the results provide further evidence that significant mineralisation continues beneath the existing mine in Namibia. Highlights included 23.3 metres of 20.5% combined lead and zinc, with 132.4 grams per tonne of silver, as well as 15.1 metres of 16.9% combined lead and zinc, with 45.2 grams per tonne (g/t) silver. The bulk of the intersections come from the central ore body, but recent results have pointed to the existence of high-grade minerals deeper underground. Managing director Martin French explained: “The discovery of large intersections of high grade ore directly beneath the floor of the old mine is very meaningful. “It means that early production could potentially pay down the cost of the plant more quickly than anticipated.” Encouraging stuff, but all pointless of course unless it can actually manoeuvre its way over the regulatory hurdles. Luckily, that has not been a problem for the company, which is on track to publish a definitive feasibility study (DFS) by the end of March, after which it will apply for a mining licence. All being well, production at the mine could resume as early as the first quarter of 2015. Of course, there are always a few hiccups along the way. In North River’s case, the drill used to bore deeper holes encountered mechanical problems, delaying the drill programme by around two months. However, it is considering purchasing another diamond drill rig and is confident of making up for the lost time. “In our opinion everything looks good for the restart of mining at Namib,” said VSA Capital, which has a buy’ recommendation and 2p target price. “The build period is expected to be 6-12 months, once the mining permit is granted and funding for the plant secured. “This means that it could potentially restart production as early as Q1 2015.” Once the mine is up and running, there is also scope for expansion as VSA points out. “Some of the [drill] results… are representative of at least three or four different ore zones across the length of the mineralisation strike, as accessed underground, lending plenty of future production options once the mine is in operation.” Plans are already being drawn up to explore Namib’s surrounding area. A second helicopter-led electromagnetic survey is to be carried out to the south of the licence area. To fund this work, it is in talks with several potential capital financiers, with reported good interest from African and European banks, several off-take concentrate trading houses, and a number of equity funds. It has secured the services of Donald McAlister, former Mwana Africa (LON:MWA) finance director, as a consulting financing adviser to help with these discussions. - See more at: http://topequitynews.com/north-river-resources-racing-towards-production/#sthash.7dUmxHxX.dpuf
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