Kaboko Mining raises $1.2M for maiden Mansa manganese resource
Kaboko Mining (ASX: KAB)
has raised $1.2 million for completion of the maiden JORC Resource
definition and continued ramp up of production at its high grade Mansa
manganese mine in Zambia.
Separately, it has secured the rights to a joint venture arrangement with Genet South Africa for the Kareepan Manganese Project in the Northern Cape, South Africa.
The funds were raised through an issue of redeemable convertible bonds to two institutional investors.
“We are very pleased to have attracted investors of the calibre of Platinum and Azcan to the company at this time. This funding will further strengthen the company’s balance sheet and its continued growth,” chief executive officer Tokkas Van Heerden.
The company had recently completed exploration drilling designed to help establish JORC Resources and is currently producing 5,000 tonnes of ore per month from Mansa.
The Bonds issue to Platinum and Azcan may be converted into ordinary shares at a price based on 80% of the average ten daily volume-weighted average trading price of the company’s shares at conversion.
In addition the company will issue 100 million shares which will be offset against the share issue on conversion of the final Bonds and consideration including a non-refundable commencement fee of 6% of the Facility is payable calculated based on the 5 trading day volume weighted average price, being $0.004, which will be satisfied by the issue of 21,000,000 shares together with the issue of
100 million unlisted options exercisable at $0.01 each within 3 years of issue.
The facility may be drawn in tranches of $150,000 subject to any necessary shareholder approval.
Each investor has the right to appoint one director to the board and chairman Andrew Simpson and executive director Nigel Goodall have agreed to resign from their positions to keep the board composition down to a level appropriate for the size of the company.
Kaboko has also completed exploration drilling at Mansa with samples currently with the laboratory for assaying.
Once results are available, independent contractor, Minxcon, will complete its report on the project, which includes establishing a maiden JORC compliant resource statement.
Visual results to date indicate significant intersections which, upon confirmation of latest results, go a long way towards establishing a minimum 10 year mine plan.
Production at Mans is currently at approximately 5,000 tonnes per month, with the company now having 10,000 tonnes of stockpiled ore and an additional 30,000 tonnes of detrital over-burden to be processed.
The mobile crushing plant has now reached the mine and construction of the stationary plant will commence the moment geologists have cleared the development area. This area had to be moved as it potentially would have limited the pit expansion.
Kaboko is also working with the Zambian Government to improve logistics from mine site to port, in Dar es Allam, Tanzania.
It is anticipated that logistics will improve and exports continue during the on-coming wet season with the implementation of a new export strategy.
The company will develop its already owned siding near Serenje to allow for more service providers to be utilized. It is also currently reviewing its local partnerships and the development and expansion there-off.
Kareepan Joint Venture
Kareepan project location
The Kareepan Project is located in the Postmasburg Manganese Field that was discovered in 1922 and mined predominantly by Assmag and Billiton from 1960 until the early 1980's.
Production ceased due to the discovery of the higher grade Kalahari Manganese Field.
Increased demand for medium grade manganese ore over the past five years has led to renewed exploration activity in the Postmasburg Manganese Field with several companies either commencing production or reviewing project potential.
Neighbouring farms are mined by Assmang and Mittal.
Historically small scale mining has been undertaken on the project area and there are manganese outcrops located throughout the area as well as four old mining pits and extensive old tailings dumps.
While Kareepan does not have a JORC Resource, it does have significant historical mining and drilling records as well as a current Mining Right enabling activity to commence mining.
Preliminary processing test work has been undertaken on the orebody and potential grade and recovery results have been established.
The Kareepan dumps offer an interim income stream until proposed exploration confirms a JORC Resource that will lead to mining operations on the main ore body.
It is anticipated that first production from the dumps will be shipped in January 2014.
An exploration drilling program will commence in November 2013 to drill about 1,600 metres to assess mineralisation on the project area followed by auger drilling of the detrital deposits.
The drill program will enable a report to be prepared identifying a JORC resource and a mine plan for production of saleable ore at between 10,000 and 20,000 tonnes per month.
Under the joint venture, Genet South Africa will be responsible for mining exploration, development, operations and infrastructure on a cost recovery basis for an estimated initial US$3 million with profits after that being split equally.
Kaboko will be responsible for the marketing and sale of product on behalf of the joint venture as well as logistical support.
The partners have agreed an initial budget for US$3 million, which includes mining exploration drilling program and mine plan, infrastructure, jig and screen crushing unit, rail guarantee and working capital.
Genet South Africa is the South African arm of Gecko Africa, a mining and minerals processing company that operates across the Southern African sub-region.
It operates an extensive fleet of exploration drilling and open-pit mining operations, providing both contract and in-house civil construction and mining capability.
Genet South Africa provides turn-key processing plant solutions including both mobile and fixed crushing and screening plants, DMS plants, sensor based sorting solutions and dry air separation plants.
These capabilities include plant design, fabrication and construction together with operation and maintenance.
In-house technical capability includes two fully functional mineral analysis laboratories and geological and mine planning functions.
With the $1.2 million capital raising, Kaboko Mining is now funded to complete its maiden JORC Resource definition and increase production at its Mansa mine.
The JORC Resource is expected to be strong given that the company had decided to expand it and will be a key catalyst for a re-rating of the company’s shares.
Production is also set to rise to 10,000 tonnes per month once the crushing plant is in place.
Meanwhile, the Kareepan Joint Venture offers exposure to a well-developed manganese and iron ore environment with an established operator as its partner.
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