Black economic empowered (BEE) junior mining company BSC Resources is planning a dual listing on the Toronto Stock Exchange (TSX) and the main board of the JSE by the end of the year.
The company completed a R18,2-million private placement in May.
BCS Resources CEO Bongani Mtshisi tells Mining Weekly that the money raised will enable the company to complete the first phase of exploratory drilling on the Insizwa nickel project, near Kokstad, in the Eastern Cape.
In the first phase of drilling – which started in September last year and is scheduled for completion in September 2007 – a total of 4 000m of core samples will be collected.
BSC resources has also completed a ground-penetrating radar survey and a geochemical soil survey of the Insizwa complex
Mtshisi says that the results of the drilling programme, ground-penetrating radar survey and geochemical soil survey will be compiled in a competent person’s report, which is required for listing the company on the TSX and the JSE.
He adds that geoscientific exploration work on the project has, to date, been “very positive”.
Disseminated and massive sulphide ore bodies have identified.
The drilling programme focuses on firming up the grades of nickel, copper and platinum-group metals (PGMs) present in the deposit.
Depending on the results, the company could mine nickel, copper and PGMs at Insizwa.
Mining has been taking place in the Insizwa complex since the 1900s.
Drilling is being conducted from seven site positions inside the historical adits of the Waterfall Gorge mine, which dates back to 1865.
BCS hopes to prove grades of 1% nickel with valuable copper and PGM credits.
Mtshisi says that given that the orebody starts within 50m from the entrance of the historical adits, it is conceivable that an eventual mine could be brought into production at a cash cost of between $30/t and $40/t, compared with a likely turnover value of more than $300/t or ore.
Analysts believe that if BSC can only prove up to five-million tons of ore, the company could earn $1-billion in pre-tax profits from the mine in five to seven years of production.
Besides the Insizwa complex BSC Resources is reviewing the possibility of starting a brownfields copper project near Musina, in the Limpopo province.
However, the company is still waiting for the Department of Minerals and Energy (DME) to grant it a prospecting right for the project.
The proposed copper project aims to mine a resource of three-million tons, grading at 1,4% copper.
Once the DME has approved BSC’s application, work will start on the project, which has the potential to create early cash flows for the company.
Partnering the big players
Concerning BSC’s successful private placement in May, Mtshisi says that the initiative had introduced a number of leading South African and North American institutional shareholders to the company, such as
Oryx Investment Management, Blue Bay Fund management and Grayston Capital.
Besides assisting BSC to raise money for its developmental projects, Mtshisi enthuses that the private placement has raised BSC’s visibility to capitalise on the need of mining companies to meet the BEE requirements of the Mineral and Petroleum Resources Development Act (MPRDA).
The MPRDA requires that mining houses secure BEE partners if they wish to retain old-order mining rights.
“We hope to partner the big players in the industry, such as the Anglos and BHP Billitons,” Mtshisi says.
He emphasises that BSC Resources aims to distinguish itself from other BEE mining companies by the operational involvement of its executives in the company’s operations.
Mtshisi is a mining engineer, and the rest of the company’s board members either have operational experience in the mining industry or have experience in mining industry investment.
Bongani Mtshisi – Empowered junior miner plans dual listing by year end