Aim-listed Keras Resources’ Nayega manganese project, in northern Togo, is expected to start production in the first quarter of 2020, the miner confirmed on Tuesday.
The ancillary documentation related to the exploration permit, which is held by Keras’ majority owned subsidiary Société Générale de Mines (SGM), which is currently prohibiting the start of production, will be concluded by year-end.
The update follows after the Council of Ministers of the Republic of Togo convened last month, where a decree was adopted and published granting a licence for large-scale exploitation of the manganese deposit at Nayega to SGM.
Initial operations will be based on shipping of ore to smelter end-users; however, Keras believes there is potential to add significant value in producing manganese sulphate for the fertiliser and battery markets as a second-stage development.
As a result, Keras has appointed Perth-based Simulus Engineers to conduct a scoping study into the potential to develop such a refinery for the Nayega project.
Keras CEO Russell Lamming on Tuesday said the company’s strategy of proving up the project through the fully funded 10 000 t bulk sample had been validated, adding that, without investing any further capital, the miner could now transition from explorer to producer.
The installed capacity allows Keras to start production of beneficiated 38% manganese ore at a rate of 6 000 t a month from the first quarter of 2020.
Subject to financing, steady-state production of 17 200 t a month is expected in the second quarter of the year.
"Concurrently, we will look to implement Phase 1 of the expansion programme through the installation of a new 70 t/h scrubber plant to be built in parallel with our existing 25 t/h plant,” Lamming commented.
This gives Keras the flexibility to use the existing plant as both a production plant in the short term, as well as a sampling plant when it starts to assess the feasibility of producing battery-grade manganese.
The company is currently in discussions with various offtakers to provide financing for the expansion programme.
Additionally, in tandem with the expected start of full production at Nayega in 2020 over a current mine life of 15 years and resultant defined cashflow, Keras is also in the process of distributing its 33.8% interest in ASX-listed and gold focused Calidus Resources, resulting in a distribution of about £9.9-million.
Post the distribution, shareholders will have direct exposure to a cash-generative manganese-focused company, Lamming said.