LOCAL LIMESTONE DEMAND
TCT believes that there is demand in Mozambique for lime for cement production, agricultural applications and aggregates
Photo by: Bloomberg
Aim-traded, multicommodity mining and natural resource development company focused on Southern and West Africa, Premier African Minerals, has conditionally agreed to pay $2.1-million for an initial 52% interest in Mozambique-based natural resources company TCT Industrias Florestais.
Under the agreement with TCT, Premier has conditionally agreed to acquire an initial 26% interest in TCT from Transport Commodity Trading Mozambique for $1.1-million and a further initial 26% interest from investment company GAPI for $1-million.
TCT has a limestone exploration licence in Mozambique covering a 27 km2 deposit, 20 km south-west of Caia town, within the company’s 24 821 ha hardwood forestry concession located in central Mozambique. The Tete/Beira rail link, complete with a three-line siding, runs on the northern boundary of the concession.
Premier’s development strategy is aimed at finding low capital expenditure, potentially near-term production. The board of Premier believes that the TCT limestone project provides this opportunity in a region that the company currently operates and that TCT’s limestone and timber interests complement the company’s current portfolio of minerals and natural resource interests.
Premier has already raised £1.1-million, before costs and expenses, through an issue of new ordinary shares, which is enough to fund TCT’s projected exploration, operating and development expenditure and the initial cash acquisition costs.
Premier CEO George Roach says the acquisition is particularly attractive both in the upside potential from the development of limestone and the allied operating natural resource business of TCT that is expected to positively impact on cash flows and mitigate normal exploration and mineral development risk.
“At the same time, an existing market and available infrastructure significantly add to the early development potential of the deposit. “This, together with developments at RHA [Premier’s tungsten mine north-west of Bulawayo, in Zimbabwe], where recommissioning of the vertical shaft remains on target for completion this month, adds substantially to Premier’s future.”
TCT is expected to be self sustaining and to contribute positively to group cash flows in the current year.
TCT plans to start an initial exploration and assessment work programme on the limestone deposit that is expected to provide a maiden resource and preliminary scoping study late in 2016. The approved exploration programme is fully funded.
Early testwork on surface material of the limestone indicates that there are potentially acceptable grades of calcium carbonate for limestone for use in cement production. In addition, initial work suggests that solubility should be suitable for agricultural lime and the material is also expected to be suitable for aggregate production. TCT believes that there is demand in Mozambique for lime for cement production, agricultural applications and aggregates.
The limestone exploration licence is valid for two years from the date it was formally granted in March and is renewable for up to ten years in total.
The work commitments under the exploration licence are set out in an approved exploration programme with a budget of $200 000. There has been limited exploration work to date on the limestone deposit and there is no current resource, although there is evidence of historic small-scale mining activity.
Premier has offices in Lome, Togo, in Bamako, Mali, and in Bulawayo, Zimbabwe, with support services in Johannesburg, South Africa.