AQSE-listed mining investing company All Star Minerals has announced the successful completion of its due diligence over the Blesberg lithium and tantalum project in South Africa and the Nkombwa Hill tantalum, rare earth elements and phosphate project in Zambia.

This followed All Star’s announcement on April 21 that it had entered into a heads of agreement (HoA) with mining investment firm Gathoni Muchai Investments.

The due diligence process included site visits, analyses of the technical aspects of the underlying deposits and their Joint Ore Reserves Committee- (Jorc-) and South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves- (Samrec-) compliant resources, reviews of historical mining and exploration activities, as well as an assessment of the associated local utilities, infrastructure, support and workforce availability for the restarting of mining operations.

“Due diligence is an important aspect with respect to investment and acquisition and, having completed the process, we believe that these projects should provide considerable value for the company and its stakeholders,” All Star CEO Jason Brewer said on June 13.

As a result of the successful completion of All Star’s due diligence on the two projects, the terms of the HoA become effective and the company is proceeding with its planned investment in the projects. 

Under the HoA, All Star has an option to acquire an initial 25% legal and beneficial interest through a staged cash investment of $150 000 over the Nkombwa Hill project and has now made its scheduled initial $25 000 investment.

Further, All Star has the option to acquire an initial 30% interest in the Blesberg project by issuing £337 500 in fully paid-up ordinary shares in the company and providing a cash advance of £237 500 to the Blesberg project shareholders. An initial £37 500 initial cash payment has now been made to the Blesberg project shareholders, securing an initial 5% interest.

Increased interests in the projects can be further secured by All Star through both cash- and share-based payments and through investment in funding exploration and development of the two projects. 

All Star also has the right, but not the obligation, to acquire majority controlling interests in the projects until June 30, 2023. To increase its investment in the projects, the company said it would consider various forms of funding, taking into consideration the advanced nature of the two projects, including offtake and commodity prepayment funding arrangements.

The All Star board believes that by securing an interest in and investing in these projects, they offer the potential to deliver positive returns to shareholders through a successful restarting of mining and export operations.

“As the world continues to focus on a more sustainable future, it has never been more important to secure a supply of battery metals and at All Star we are pleased to be a part of that process,” Brewer said.

BLESBERG
The Blesberg project is an advanced project comprising the former producing Blesberg mine in the Northern Cape. The Blesberg mine is one of the largest known mineralised pegmatite deposits in the Northern Cape pegmatite belt.

Historic production from the Blesberg mine included spodumene concentrate containing lithium, and tantalite, as well as feldspar, bismuth, beryl and mica.

Historic samples collected from the Blesberg opencut mine in 2016 assayed between 1.27% and 6.42% lithium oxide from six of the 20 samples taken.

Previous drilling and trenching in 2017 at the Blesberg mine confirmed areas of spodumene lithium mineralisation present in the highly zoned pegmatites. This drilling successfully increased the known strike length of the main pegmatite by more than 1 km in length with significant widths of pegmatite intersected.

Historic exploration and feasibility study work focused on the production of high-value feldspar and by-product production of spodumene concentrate and tantalite.

Due diligence work has led All Star to believe there is potential to increase the lithium-bearing spodumene resources in the pegmatites with the view to accelerate new mine development, given the robust market conditions and market pricing of lithium concentrates.

The company said it was now looking to begin bulk sampling and establish a pilot plant to test a representative sample and determine recoveries, while reviewing previous work at the project. Following this, All Star said that it would seek to start small-scale operations and a broader drilling programme to ascertain the extent and depth of the potential orebody.

NKOMBWA Hill
The Nkombwa Hill project is a major mineralised carbonate complex located in north-east Zambia.

Previous exploration has defined a Jorc 2012-compliant total indicated and inferred mineral resource of 21.8-million tonnes at a grade of 7.06% phosphorus pentoxide (P₂O₅) and 1.17% total rare earth oxides (TREOs) at a 3% P₂O₅ cut-off.

As a subset of the total mineral resource, a mineral resource of 2.78-million tonnes at a grade of 2.76% TREO and 6.43% P₂O₅ at a 1% TREO cut-off grade was defined.

The reported total mineral resource was defined on an area of less than 5% of the Nkombwa Hill deposit and highlights the significant resource upside potential that exists for both phosphate, rare earth elements and also tantalum and niobium mineralisation.

The All Star board believes there is potential for the project to deliver near-term cash flow, with low initial capital costs, through the phased development of the near surface rare earth element orebodies and, subject to further exploration, tantalum and niobium mineralisation into a small-scale mining operation within the next six to nine months – subject to permitting consent.

In conjunction with the near-term production, All Star also intended to carry out a systematic exploration programme to fully assess the phosphate, rare earth elements and tantalum and niobium mineralisation and report mineral resources in accordance with the Jorc 2012 code.

All Star said it would also seek to conduct preliminary metallurgical extractive test work to identify the most efficient package to successfully extract the phosphate and rare earth element resources, and identify the size and composition of the additional phosphate and rare earth resources.

The location of these projects in well-established mining jurisdictions such as South Africa and Zambia, where the board has significant operating expertise and a strong local partner base, adds further value, All Star said.

“The completion of the due diligence programme . . . means we can now start to add real value to these promising assets. The company already has exploration, development and operating plans in the pipeline and we look forward to sharing more on this with the market in the near future on these and other assets that we are progressing,” Brewer concluded.