The world’s third largest magnetite Iron Ore in Tonkolili, Sierra Leone being mined by African Minerals is happy with the progress in the last six months.
The total mineral resource at the site has increased to 5.1 billion tones, and the indicated category of 3.1 Bt average grades of 30.7% of total iron. The inferred category is 1.9 Bt with an average of 28.9% of total iron. The metallurgical test work indicates that the iron ore at Tonkolili is upgradeable to a high quality concentrate grading in excess of 68% Fe at a mass recovery of 30% and over with impurities at levels less than 4.5% 4.5% SiO2, 0.6% Al2O3, and 0.01% P. The exploration has confirmed a potential of 800 million tones of hematite mineralization on Numbara, Simbili and Marampa deposits, as supported by SRK Consulting in UK. The Parliament of Sierra Leone has formally ratified the lease over railway and port infrastructure. The Tagrin Point, located adjacent to one of the world’s largest natural harbours, will become a world class iron ore transport, ore handling and ship loading facility for Sierra Leone and the West African sub-region. A sum of £63.8 million before expenses raised in July 2009 by way of a cash placing with new and existing institutional investors and strong endorsement of iron ore assets and new management team by key investors during difficult economic conditions, with cash at bank as at 30 June, 2009 was US$9.6 million. According to the report the company is well placed financially, and has the access to the infrastructure and technical personnel to progress the project in Tokolili to the construction phase so they can fully realise the potential of one of the largest iron ore magnetite projects globally. It is believed that the company will benefit significantly as the project will be safer by the completion of a Definitive Feasibility Study at Tonkolili. It is expected that the results from the current hematite test work, due by year end, will demonstrate that a saleable product can be produced at Tonkolili which could potentially see the Company move into initial production over the next 12 months, realising early cash flow. The African Minerals company is pleased with the government for their continued support they are providing them with the ability to expedite mine and infrastructure development plans. The Chairman of the company in his statement said during the interim period, the Company has continued to deliver on its strategy to accelerate the development of the Tonkolili iron ore project in Sierra Leone. It has been an exciting period for the Company, in which a number of critical milestones have been reached. He averred that the company is in an important drive and is now comprised of a highly experienced management team, with strong expertise within the iron ore sector. The newly assembled management team has already started to oversee the design and development phase of one of the world’s most significant iron ore projects and the Company is very fortunate to have the in-house capabilities required to realise the full potential of such a large scale operation. The Company’s technical team has a track record which demonstrates significant experience and skills in bringing major iron ore projects into production. This, along with the fact that they successfully raised in excess of US$100 million in July 2009 with institutional investors, that should provide comfort for the shareholders that are in a very strong position to accelerate the project into the construction phase. A highly successful exploration programme at Tonkolili during 2008 led to the completion of a JORC compliant Mineral Resource estimate by SRK Consulting (UK) Limited (“SRK”). In May 2009, the Company was pleased to announce a 5.1 Billion tonne (Bt) JORC compliant iron ore magnetite resource at Tonkolili, and believes this to be the third largest magnetite iron ore resource globally and the largest in Africa. Geophysical work and reconnaissance drilling over a 20km strike length at Kasafoni, on the northern extent of the Tonkolili licence area, indicates the potential to increase the iron ore magnetite resource in the order of 10 Bt. This would establish Tonkolili as one of the most significant iron ore project globally. The chairman stressed that the proceeds from the placing allow them to expedite the Tonkolili Definitive Feasibility Study (“DFS”), which is targeted for completion during the second quarter of 2010. The Company is also set to complete by year end an exploration and analysis programme on the hematite iron ore cap and oxidised transition zone which overlies the primary magnetite resource at Tonkolili.
By Austin Thomas