MiningNews: Genmin targets rapid iron ore start
IT has been a big week for investors keen on seeing thedevelopment of Africa’s iron ore reserves, with two Australianjuniors advancing studies.
While Madagascar-focused Akora Resources' Bekisopa scoping study wasannounced as positive on Monday, it was unable to offer details, but that wasnot the case for Genmin, which today released hard numbers and an aggressivetimeline for a potentially scalable mining operation at Baniaka, Gabon.
Based on an expanded 760 million tonne resource, contained within just 15kmof the interpreted 85km strike, Genmin has outlined a potential 5Mtpaoperation based only on the combined 168Mt detrital iron deposit and soft oxide resource.
Of that, there are now maiden reserves of 101Mt, more than enough to support an initial 10-year mine life.
It needs a relatively modest US$200 million to develop. The post-tax net present value is put at $391 million, giving an internal rate of return of 38% and project payback of 2.7 years.
Mining and processing are expected to be conventional open pit and beneficiation, with average cash costs of $59/t expected.
Baniaka will initially truck the ore to the existing Trans-Gabon railway facilities at Franceville, rather than funding a dedicated rail spur.
Managing director and 4.7% Genmin shareholder Joe Ariti said the PFS was an excellent launching pad and he remained confident of a final investment decision being made by mid-2023.
The hope is to start production by mid-2024.
"The financial metrics are compelling and with a modest initial capital investment, and operating hydroelectricity, rail and port infrastructure, this
initial phase of monetising the province scale Baniaka asset is highly feasible," Ariti said.
Genmin has multi-national commodities player Anglo American in its corner.
Anglo recently paid a $10 million cash payment in return for a sales royalty over the first 75Mt produced from Baniaka and is working to support debt and offtake agreements.
Pending due diligence, Anglo can provide up to $75 million of funding for Baniaka, and offtake up to 100% production.
Improvements being studied include an option for selling a separate higher value pellet feed product and doubling projection to 10Mtpa as soon as debt funding allows.
The company started the quarter with A$12 million cash.
Genmin has been working on Baniaka since being granted the licence in 2012.
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