JOHANNESBURG (miningweekly.com) – TSX-listed Great Western Minerals Group (GWMG) on Wednesday said it was progressing well with refurbishment of the Steenskampskraal rare earths mine in South Africa, while it was also making progress on completing a technical report on the property, following receipt of the first assay results.
On April 5, Great Western announced the closing of a secured convertible bond offering that resulted in the company raising $90-million.
The company said it would use the capital to complete a Canadian National Instrument 43-101-compliant technical report on the Steenkampskraal project, as well as to develop the property.
Development on the property required the construction of a mixed-chloride production facility, as well as construction of the separation plant near Steenkampskraal for which respective contracts had already been inked.
Further, the money would be used to buy equipment and expand the company’s UK subsidiary Less Common Metals (LCM).
The bonds carry a yearly interest of 8%, payable twice yearly, and mature on April 6, 2017. Bonds would be convertible into common shares of the company at a rate of C$0.66 a share, while security against the bonds would entail a first-charge against the company’s shareholdings of its operating subsidiaries in the UK, the US and South Africa.
The proceeds raised from the offering would also be used to provide for general working capital.
Of the offering’s proceeds, $10-million, including the expenses of the offering, was advanced to GWMG on closing of the offering, while the remainder of proceeds would be kept in escrow until the company had completed the Steenkampskraal technical report by May 31, with a resource estimate that indicates that at least 20 000 t of total rare-earth oxides (REOs), in the measured, indicated and inferred resource categories using a 1% cut off grade, are present at the Steenkampskraal property.
Meanwhile, the first phase of assay results were received on April 10, revealing encouraging quantities of REOs present at the property. The results pointed to a significantly higher concentration of REOs than at other rare earths mines.
A second phase of drilling was started during February to test the extension of the mineralised vein system.
Further, GWMG moved from the completion of the shaft and surface refurbishment programme to underground refurbishment, while ventilation continued to be enhanced. East Rand Engineering Services was appointed to carry out the underground refurbishment programme.
Mine management had started the process for selecting a firm to undertake the mine design and planning work. Progress was facilitated by the approval of an authorisation change request submitted by the company to the National Nuclear Authority of South Africa and approved in March.
The company has also submitted an application for electrical network design and a connection to the State-owned power utility Eskom for electricity supply. The generators currently in use would revert to back-up status when the network supply is in place.
GWMG also reported that members of the Steenkampskraal management team conducted a forum with residents of two communities in the region during mid-March.