Mineração Vale Verde and Appian Announce First Blast and Implementation Update at Serrote

LONDON, July 14, 2020 /PRNewswire/ --

Highlights

• First blast at Serrote completed marking a major milestone of open-pit development with over one million tonnes of material moved to date
• Construction and engineering works progressing to plan, with start-up expected in H2 2021
• Continued positive discussions with financing and offtake partners
• US$600,000 charitable support package to help combat COVID-19 in Brazil

Mineração Vale Verde Ltda. ("MVV" or the "Company") and Appian Capital Advisory LLP ("Appian") are pleased to announce first blast and an implementation update for the Serrote copper-gold project ("Serrote") located in Alagoas, Brazil. Appian also announces support to combat the COVID-19 pandemic in the country.

First blast and implementation update

On 20 June 2020 MVV achieved first blast at Serrote, marking a major milestone of the open-pit development with the pre-stripping program having now handled over one million tonnes of material. The Company continues to de-risk and progress Serrote to schedule and under budget, with overall project execution tracking at ~60% complete. Procurement is approaching the final stages with 96% of key packages by value awarded and start-up expected during H2 2021.

First blast marks yet another significant development milestone following completion of Serrote's previously announced definitive feasibility study ("DFS"), which outlined a conventional, low strip open pit operation producing 20ktpa of copper equivalent at second quartile costs over an estimated initial mine life of approximately 14 years. The robust project economics outlined in the DFS led to a positive construction decision with Appian funding all of the equity required to bring the asset into production.

MVV is taking necessary precautions to ensure the health and safety of employees and local communities and continuity of project implementation in the wake of the COVID-19 pandemic. Other recent development highlights include:

• 1,500+ person team on site including third party contractors  
• Installation License renewed by the Alagoas government
• 230kV powerline operating license issued
• Significant progress made in advancing construction of other associated electrical infrastructure
• 10,000m+ of pre-production infill drilling completed to provide greater near-term resource resolution and enhance short-range and medium-range mine planning for the first few years of operation
• Completion of the primary crusher reinforced earth wall and the cofferdam for the tailings storage facility ("TSF")
• Construction and commissioning of the water pipeline and start-up of the freshwater intake
• Earthworks for beneficiation plant completed and civils well advanced

MVV is in advanced discussions on the previously announced US$160 million senior bank project financing facility as well as other non-dilutive funding options and expects to reach financial close during the second half of this year.

Upcoming milestones

As Serrote continues to progress in line with the construction plan, MVV is targeting the following milestones by the end of 2020:

• Construction of the TSF spillway and conveyance system tunnel
• Completion of the concrete foundation for the grinding area and the primary mill structure
• Energisation of the 230kV power system
• Finalising offtake arrangements for Serrote's copper-gold concentrate  
• Closing on a non-dilutive financing to fund the remaining construction capex

Initial mine life extension opportunities

MVV is pursuing several expansion opportunities beyond the initial 14-year mine life, with significant defined mineralization outside of the current mine plan as well as numerous satellite resources and targets within trucking distance of the planned plant infrastructure. Less than 50% of the 112Mt global resource is currently contained within the mine plan, with active exploration and growth plans underway to increase mineable inventory.

In addition, MVV is stockpiling Serrote's oxide resource for future processing as part of the pre-stripping activities. With 19Mt of oxide resource at Serrote grading 0.5% copper and additional near-surface oxide material present at satellite deposits, MVV is evaluating the processing of oxides via SX-EW on-site to produce copper cathodes.

COVID-19 support for local communities

Brazil is one of the countries that has been worst affected by COVID-19 globally. Appian has announced a US$600,000 support package to help combat the pandemic in the regions in which its portfolio companies operate, through its philanthropic vehicle, the Appian Way Charitable Foundation ("AWCF"). To date, AWCF's support includes procuring 6,000 Covid-19 Rapid Test Kits, 12,000 N95 masks, 25,000 white surgical masks and 70 non-contact digital infrared forehead thermometers for use in Alagoas where Serrote is situated, and Bahia, the location of Appian's Santa Rita nickel sulphide project.

AWCF has also distributed more than 40 tons of materials packed into hygiene kits to community members, with all materials carefully sourced to support local businesses. In Bahia, AWCF also contributed to fund a health unit dedicated to treat COVID-19 patients. On the food security front, AWCF has distributed more than 8 tons of food supplies for at-risk families.

This supplements Appian's work with both MVV and Atlantic Nickel to improve the quality of life for underprivileged children and women within the communities around the operations.

Paulo Castellari, CEO MVV & Appian Brazil commented:

"I am pleased with the continued progress at Serrote, and first blast marks another major milestone on the road to production, which remains on track for the second half of 2021. Construction works are progressing as planned, as we build on the project's strong fundamentals to develop the asset on schedule and under budget.

"Serrote continues to demonstrate robust economics with potential upside, and we are seeing strong interest from offtake and financing partners, which underlines the progress that MVV and Appian have made in developing and derisking the project, along with the attractiveness of Serrote's high-grade copper-gold concentrate.

"Environmental, Social, and Governance efforts continue to be fundamental to our business, and I am proud of our actions to help combat the COVID-19 pandemic in Brazil, to support and partner with the communities in which we operate."

About Mineração Vale Verde Ltda.

MVV is developing Serrote, an advanced stage, de-risked greenfield open-pit copper-gold development asset currently under construction and with all major permits in place, located in Alagoas, Brazil. The Company is headquartered in Belo Horizonte, with a high-quality management team with extensive local and international experience operating at site.

Following Appian's acquisition of the asset in mid-2018, an updated DFS was completed outlining a 14-year initial mine life with production of approximately 20 thousand tonnes of copper equivalent per annum in a premium, high grade concentrate. Serrote is expected to be well positioned in the second quartile of the copper cost curve on a total cash cost basis.

MVV is pursuing several expansion opportunities beyond the initial mine life, with significant defined mineralization outside of the current mine plan as well as numerous satellite resources and targets within trucking distance of the planned plant infrastructure. Less than 50% of the 112Mt global resource is currently contained within the mine plan, with active drilling and growth plans underway to increase mineable inventory.

About Appian Capital Advisory LLP

Appian Capital Advisory LLP is the investment advisor to long-term value focused private equity funds that invest solely in mining and mining related companies.

Appian is a leading investment advisor in the metals and mining industry, with global experience across South America, North America, Australia and Africa and a successful track record of supporting companies to achieve their development targets, with a global operating portfolio overseeing around 3,000 personnel.

About the Appian Way Charitable Foundation

AWCF is Appian's philanthropic vehicle. Appian regards social, environmental and governance standards as crucial elements within all investment opportunities and portfolio companies.

The main focus area for AWCF is children, women and the disenfranchised, and it seeks to contribute to the health and equal education of children in the communities and principal regions into which Appian invests with the aim of contributing to lifting people out of poverty, improving long-term environmental stability and health and empowering women and girls.

For further information:

Finsbury: +44-(0)20-7251-3801, [email protected] 
Charles O'Brien, Ruban Yogarajah, Richard Crowley

Appian Capital Advisory: +44-(0)20-7004-0951, [email protected] 
Michael W. Scherb, Guy de Freitas