Name of the Project
Elandsfontein phosphate project.

Location
Saldanha Bay, in the Western Cape, South Africa.

Project Owner/s
The Elandsfontein project is held by Kropz (70%), African Rainbow Capital, or ARC (25%), and a smaller empowerment partnership (5%). Ubuntu Botho Investments forms part of the ARC structure.

Project Description
The Elandsfontein deposit is the biggest sedimentary phosphate deposit in South Africa.

The phosphate mineralisation is contained in the Varswater formation, with the phosphate occurring in phosphatised shell fragments and phosphorite pellets. The remainder of the deposit consists of silica sand and calcium oxide.

The project has an initial mine life of about 14 years and can deliver one-million tonnes a year of phosphate rock concentrate at steady state.

The processing plant will produce a final saleable concentrate to the expected specification of 68% bone phosphate of lime and about 31% phosphorus oxide using a flotation configuration of direct flotation, followed by a reverse flotation circuit.

Potential Job Creation
Not stated. 

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Kropz has spent $120-million to bring its Elandsfontein phosphates mining and processing project into production and requires an additional $16-million to cover its augmentation.

Planned Start/End Date
While the project was first scheduled to start producing phosphate in 2018, it reported first production of phosphate rock concentrate only on March 18 this year.

The Elandsfontein project has been plagued by various delays since October 2017, when its water-use licence was contested by an environmental protection group. Other challenges have included changes to its processing plans and Covid-19-related delays.

Latest Developments
Kropz has reported a delay in the ramp-up of operations at the Elandsfontein phosphate mine, owing to unexpected ore variability.

The mining rates and associated delivery of ore to the plant from the current mining area have been compromised because of the presence of competent banks of hard material within the orebody that were previously unknown.

Kropz has said this material cannot be mined using free-digging methods and, therefore, necessitates the company’s first testing the mechanical breakage of the material using new equipment and identifying alternative mining methods.

The company has also started with drilling activity to assess the impact of this hard material on the future mine plan of Elandsfontein.

Once this drilling is complete, Kropz will publish a revised mineral resource estimate, if necessary.

The delay in ramp-up of operations at the already delayed mining operations requires funding of R70-million, of which R13.5-million will be drawn down from Kropz’s existing conditional convertible equity facility with shareholder ARC Fund, marking the full-drawdown of R177-million since the facility was announced in May.

Kropz will also draw down R60-million from a R121-million bridge loan facility it agreed with ARC earlier in August.

The company is exploring further funding options with ARC to fund any additional working capital requirements for Elandsfontein through to positive cash flow.

Key Contracts, Suppliers and Consultants
DRA (engineering, procurement and construction management); Minopex (processing plant operation); and VDM Transport.

Contact Details for Project Information
Kropz, tel +27 21 930 0927 or email info@kropz.com.