JOHANNESBURG (miningweekly.com) – Manganese development and iron-ore exploration company Ferrex has made “solid” headway in the development of its multicommodity portfolio throughout Africa, maintaining its objective of becoming a low-cost producer of minerals for the steel industry.

The Aim-listed group outlined in its results statement for 2014 this week that, owing to the “unfavourable” iron-ore price over the year and a depressed market outlook for the commodity, its focus was primarily on advancing its Nayega manganese project, in Togo, over the 12 months to December.

“We believe this asset offers significant growth potential for investors as we advance it up the development curve through the definitive feasibility stage (DFS) and into production in the near term,” noted chairperson Brian Moritz.

DUAL-PHASED DEVELOPMENT
Ferrex outlined a two-phased approach to developing Nayega that would see the development of a low capital expenditure (capex), openpit, 250 000 t/y manganese operation in the first phase and the commissioning of a smelting facility to produce a valuable 74% high-carbon ferromanganese alloy during Phase 2.

Moritz outlined that the modelling for the DFS for Phase 1 had outlined capex costs of $14.5-million, while recently announced high-grade assay results of 41.6% and 42.1% supported a near-term, “starter” option route at potentially lower capex costs than this initial forecast amount.

“We have already received the environmental and social study sign-off from the Togolese government and are now working in conjunction with them to finalise the mining convention and secure the mining permit.

“We are [also] in advanced discussions with four parties [regarding funding and production],” he said.

MEBAGA PROJECT
Ferrex, meanwhile, revealed that a proposed joint venture development and funding agreement with mining majors Anglo American and Kumba Iron Ore over the Mebaga iron-ore project, in Gabon, fell through in July last year.

“That said, while due diligence was being undertaken, we continued to add value to Mebaga by completing a regional mapping and sampling programme during the year and conducted an infrastructure and logistics study, which illustrated robust economics,” Moritz reported.

The group believed that the project’s “exceptional” geology and the infrastructural advantages associated with its position as the closest direct shipping ore project to the port of Libreville made it “strategically important”, particularly in the right pricing environment.

Ferrex was actively seeking partners to allow the continuation of exploration to add value to this project.

MALELANE PROJECT
In South Africa, development of the group’s Malelane iron-ore project was at an advanced stage.

A previously completed scoping study illustrated the potential to develop a 1.8-million-ton-a-year openpit mine producing a 57% iron-ore product over a 16.6-year mine life.

The project had an inferred resource of 137-million tons at 37% iron, although the company believed it demonstrated larger upside potential, with an exploration target of between 1.6-billion and 2-billion tons at between 28% and 30% iron.

TIGHT CASH
Moritz outlined that the group’s cash position remained tight, given its ongoing monthly development commitments.

“Nevertheless, the board is confident that we will be able to secure funding in the period required to not only maintain the company’s current operations but commence developing the Nayega project this calendar year,” he commented.