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.
Fund Raising
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.
Mansa
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.
Analysis
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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