Kaboko Mining hits guidance with 55% manganese grade at Mansa
Kaboko Mining (ASX: KAB) has extracted in June an estimated 6,000 tons of high grade 55% manganese ore from the main vein at its Mansa project in Zambia as commercial scale mining moves into full swing.
Achieving earlier guidance at Mansa from full scale commercial mining at Kaboko Mining’s Mansa project is a significant milestone, with an estimated 6,000 tonnes of high grade 55% manganese ore extracted due to the wider than expected main vein. First commercial sale arrangements with Noble Group are also imminent.
Significantly, while this achieved the target set in May, it also exceeded expectations as the much wider main vein reef of about 7 metres led to higher ore recoveries.
Also exceeding
expectations is the manganese mineralisation of the overburden.
Full CIF costs (production and logistics) are also line with previous estimates of $190-$210 per
tonne made by independent consultant Mincon. Manganese prices remain at
US$2,300 per tonne.
“We are extremely excited as we have achieved the target set in May and the
initial indications are that we will be able to continue our production of
5,000tpm of main vein production in line with budgeted costs,” chief executive
officer Tokkas Van Heerden said.
“Where we have exceeded expectations is with the manganese mineralisation of
the overburden and the much wider main vein reef than previously targeted.”
Kaboko is also concluding first
commercial sale arrangements with key offtake partner Noble
Group, Asia’s largest diversified commodities trading company, for July 2013
sales.
In addition to current production activities, drilling will commence in
mid-July with the objective of testing further manganese outcrops and
establishing a maiden JORC resource scheduled for the third quarter of 2013
while completion of project infrastructure is expected by the fourth quarter of
2013.
Analysis
The strong recovery of high grade 55% manganese ore highlights the
attractiveness of Kaboko Mining’s Mansa project that is
reinforced by full CIF costs remaining in line with previous estimates of
$190-$210 per tonne.
In addition, the discovery of significant amounts of “potato” manganese in the
overburden that can be recovered and its potential to decrease overall
production costs is yet another positive for the project.
With final commercial sale agreements with Noble Group imminent, the company’s
current market capitalisation of $3.11 million offers investors a window.
