Agreement to acquire Zaaiplaats Tin Tailings Dump
25 March 2014
Bushveld Minerals Ltd
("Bushveld" or the "Company")
Agreement to acquire the Zaaiplaats Tin Tailings Dump
Bushveld Minerals Limited (AIM: BMN), a mineral development company with a portfolio of vanadium and titanium bearing iron ore and tin assets in Southern Africa, announces that it has signed an agreement to acquire the Zaaiplaats Tin Tailings Dump ("Zaaiplaats Dump"), estimated to contain between 2,600 and 4,500 tonnes of tin, from the Brent Trust ("Brent Trust") and Sephaku Tin (Pty) Ltd ("Sephaku").
The Zaaiplaats Dump is an asset owned by Zaaiplaats Mining Ltd ("Zaaiplaats Mining"), which is owned 60% by the Brent Trust and 40% by Sephaku.
The Company will acquire an equity interest of up to 87% in Zaaiplaats for a total consideration of up to R10 million (equivalent to £559,470 as of March 25 2014) as described below. This agreement is conditional on the outcome of technical due diligence and evaluation of the Zaaiplaats Dumps, to be undertaken by Bushveld over a two month period, which commenced on 20 March 2014.
Highlights:
· Significant potential tin resource, with scope to increase current tin resource by up to 4,500 tonnes contained tin, representing an up to 25% increase in the current resource;
· Potential for early production from the tailings ahead of mining the hard-rock deposits;
· Payment conditional on the outcome of the technical due diligence work underway;
· Initial test work demonstrates achievable production of a concentrate product from the tailings.
Commenting on the acquisition, Fortune Mojapelo, Chief Executive of Bushveld, said:
"Having commenced a technical work programme on the Zaaiplaats Dump, including a review of historical data and additional mineralogical and metallurgical testwork, we have begun to understand the potential of, and to de-risk the asset. Its location in close proximity to, and between the Groenfontein and the Zaaiplaats hard rock deposits, on which we already have a combined 18,477 tonnes contained tin resource (JORC), gives Bushveld scope to add an early tailings-first production scenario to our Mokopane Tin Project, with the potential of materially enhancing the economics of the Mokopane Tin Scoping Study. We have thus extended the timeline for the release of the Scoping Study in order to evaluate including the Zaaiplaats Dump within it. This is in line with our stated strategy for Bushveld's tin platform to consolidate a critical mass of contined tin inventory while pursuing opportunities for early production."
Zaaiplaats Dump Agreement terms
The key terms of the Acquisition agreement are:
1. Bushveld to undertake technical due diligence and evaluation of the old tailings dumps on the project farm at its own expense, over a two month period commencing 20 March 2014.
2. A technical committee led by Bushveld and incorporating representatives from Sephaku Tin will be established to oversee the project's development.
3. Upon the completion of the technical due diligence and evaluation to the satisfaction of Bushveld, the Company will acquire a 47% shareholding in Zaaiplaats Mining as follows:
· 20% from Brent Trust for a consideration of R2 million (equivalent to £111,900 as of March 25 2014);
· 27% from Sephaku Tin for a consideration of R2 million (£111,900).
4. In addition, Bushveld shall fund the development of the Zaaiplaats Dump up to Feasibility Stage and have the option to purchase an additional 40% shareholding in Zaaiplaats Mining from Brent Trust for a consideration of R6 million (equivalent to £335,700 as of March 25 2014) in cash or shares in Bushveld or a combination of both. As a consequence of which BMN shall own 87% of Zaaiplaats Mining.
5. Upon a successful completion of a Feasibility Study and a decision to construct a processing plant, both Bushveld and Sephaku shall be required to contribute to the construction and development of the project, according to their relative shareholdings, or face a dilution accordingly.
Zaaiplaats Tailings Project Overview
Over 100,000 tonnes of tin have been produced from hard-rock mining at the Zaaiplaats deposit between 1906 and 1989, with a simple processing methodology of stamp-milling of the ore, followed by gravity separation using shaking tables and spirals. Processed tailings were dumped in a valley adjacent to the mine and, owing to the fairly crude processing methodology employed, a significant tin resource is believed to remain in the tailings dump.
The area of the tailings dump (Portion 05 of farm Groendoorn 225KR) is not included in prospecting right 2205 PR, and has recently been acquired by the Company. Due diligence testing has been carried out on the dumps, and appears to confirm historical reports regarding the grade of material contained in the dumps. The Company intends to carry out a more detailed evaluation of the dumps to produce a JORC-compliant Mineral Resource Estimate, with the aim of short-term tin production from the dumps. An updated Scoping Study for the Mokopane Tin Project will incorporate early production from the dumps.
Historical Geological and Metallurigcal Work
An internal report by the Zaaiplaats Tin Mining Company (1981) estimated that the project contained between 2.6 Mt and 3.2 Mt of material, with an average grade of 0.1% Sn, based on 10 holes drilled into the dumps. A subsequent report by P. Marillier mentions 17 augur holes drilled into the dumps, which were assayed and tested by MINTEK. These tests indicated that much of the tin occurs in the fine size fraction. A statistical reappraisal of the MINTEK results by Muller (2003) estimated that the project contained 3.0 Mt at an average grade of 0.153% Sn, and a 2003 Competent Persons Report by Ferret Mining and Environmental Services also used historical information to estimate that the project contained 3 Mt at 0.15% Sn. Based on various historical reports, there appears to be between 2,600 and 4,500 tonnes of tin remaining in the dumps, at grades between 0.1% and 0.15% Sn.
Bushveld Minerals' Zaaiplats Dump Work Program
The Company has commenced a number of tests to confirm the approximate grade of the tin in the dumps, and to characterize the mineralogy of the dumps in order to identify the optimal future processing route. Initial mineralogical tests of material from the tailings dumps by SGS Laboratories (Johannesburg) show an average grade of 0.08% Sn, with 18.4% tin contained in the fine material (-212 µm). The bulk of the cassiterite in locked or partially liberated grains is attached to gangue minerals. Subsequent testwork on a different sample by Met-Solve Laboratories (Canada) has shown an average grade of 0.197% Sn, with significant tin (90.8%) contained in the -212 µm fraction. These tests showed that significant tin remains in the tailings dumps, but that much of this may be fine-grained, and would require an enhanced gravity technique for extraction.
Given that fine cassiterite would require an enhanced gravity technique for extraction, a 4 ton bulk sample was taken as part of pilot testwork at Bond Equipment (Klerksdorp, South Africa). The material was screened at 300 µm and the fine fraction (-300 µm) passed through a Falcon UF concentrator, to produce a concentrate which was subsequently further upgraded on a shaking table at SGS Laboratories (Johannesburg). Visual inspection of the concentrates indicates that a high-grade cassiterite concentrate was produced, and that extraction of cassiterite is possible with this process. Assay results are expected shortly, after which grades and recoveries will be calculated.
Implications for the Mokopane Tin Project scoping study
The Company is advanced in the preparation of a Scoping Study for the Mokopane Tin Project based on hard-rock mining of the Groenfontein and Zaaiplaats deposits. It is envisaged that incorporating the tailings dumps would allow for an operation with initial cash generative reprocessing of the tailings, followed by hard-rock mining of the Zaaiplaats and Groenfontein ores. In order to incorporate this scenario into the Scoping Study, the Company plans to assess the tailings dumps through auger drilling and assaying to produce a JORC-compliant mineral resource estimate. This process is envisaged to be completed in Q3 of 2014, following which an updated Scoping Study will be released.
Enquiries: info@bushveldminerals.com
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Bushveld Minerals Fortune Mojapelo |
+27 (0) 11 268 6555 |
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Strand Hanson Limited Andrew Emmott James Harris
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+44 (0) 20 7409 3494 |
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Warren Pearce Scott McGregor
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+27 (0) 21 418 0320
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Tavistock Communications Jos Simson/ Nuala Gallagher |
+44 (0) 20 7920 3150 |
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Tielle Communications Stéphanie Leclercq |
+27 (0) 83 307 7587 |
Notes to the editor
Bushveld Minerals Limited is a mineral development company with a portfolio of vanadium-and titanium bearing iron ore and tin assets in Southern Africa. The Company owns the Bushveld Iron Ore Project and Mokopane Tin Project, both located on the northern limb of the Bushveld Complex, South Africa. In addition, Bushveld has a controlling 54.39% interest in Lemur Resources (ASX: LMR), that owns the Imaloto coal project in Madagascar.
Bushveld was admitted to the AIM of the London Stock Exchange in March 2012.
This information is provided by RNS
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