Kaboko Mining completes key scoping study at Zambian manganese project
Kaboko Mining (ASX: KAB)
has completed a Scoping Study confirming that the budgeted costs for
production and logistics at its Mansa manganese project in Zambia, are
in line with its expectations.
Independent consultant Mincon had estimated the cost of delivering a CIF product at between $190 and $210 per tonne.
Manganese prices were averaging about US$2,300 per tonne on 14 May.
Given
the recent lift in manganese prices and high grade nature of the
project, this is a timely positive for the company as it prepares to
begin production over the coming weeks.
The Scoping Study also
included an indicative manganese resource estimate and mine plan for
operations based on a seven year mine life.
This is critical to
the operating program and pit design, enabling Kaboko to maximise
efficiency and productivity at the Mansa Project. It also allows the
company to start operations.
Follow-up activity
The Scoping Study provides Kaboko with the foundation for a JORC Resource at the Mansa Project.
This
will be completed following a further 24 hole drilling program
totalling 1,200 metres this quarter that targets extension of the
existing mineralisation zone.
Kaboko noted this is designed to confirm the Indicative Resource as well as increasing the potential resource.
It
noted that the Scoping Study focused on the known mineralisation area,
which represents just 2% of the 90 square kilometre area that the Mansa
Project covers.
This offers the project significant upside that
the company intends to continue defining through exploration while
continuing operational activities currently underway to achieve first
production in the current quarter.
Production plans
Kaboko had continued
mine development and associated plant and equipment purchases,
including the semi-mobile modular processing plant which will be used to
crush and process the ore at the Mansa Project, during the March and
current quarters.
The processing plant is scheduled to arrive and
be installed by the end of the current quarter while development works
have included clearing of overburden, completing construction of
infrastructure and installation.
Following initial crushing
onsite, ore from the Mansa Project will be trucked to the rail siding
for further crushing and processing before being sent to port via rail.
Initial production is targeted at 5,000 tonnes per month before it is ramped up to 10,000 tonnes per month.
Analysis
The completion of the Scoping Study is timely as Kaboko Mining progresses towards the start of trial mining in the current quarter.
Besides
estimating the cost of delivering a CIF product at between $190 and
$210 per tonne, the Study has also set an Indicative Resource that will
form the basis for the company’s upcoming JORC Resource following
further exploration.
Having recently secured a US$4 million advance by the Noble Group under the US$10m Secured Prepayment Debt Facility and a Manganese Ore Off-take Agreement it is all systems go for Kaboko. Its current market cap. of just $5 million not only looks undemanding but set to rise with the onset of production.
