The target date for commissioning at emerging African plant nutrient feed minerals producer Kropz’s Elandsfontein phosphate project has been moved to the fourth quarter of 2021.
The move is as a result of additional test work being required, as well as the design and delivery of long-lead capital items and associated works, which have impacted on both timing and the capital cost to first production.
In being Kropz’ primary focus during the 2019 financial year, ended December 31, work at Elandsfontein was aimed at defining the modifications required for the processing facility.
Test work was conducted at Mintek, in South Africa, and by research organisation Eriez and Worley in the US.
Test work results supported a robust circuit, employing both direct and reverse flotation to ensure consistent concentrate grade production of 68%, which the company says means that a phosphate content of about 31% phosphorus pentoxide could be achieved consistently.
The engineering and design of the plant indicate that additional equipment will be required and includes work such as the installation of new stacked screens to optimise the milling circuit; additional flotation cells to float the coarse size fraction of +212 micron; and ancillary infrastructure and modifications to the original plant.
Post-period-end, Kropz secured a convertible loan facility of up to $40-million from the ARC Fund, Kropz's major shareholder, in June for the development of Elandsfontein. The first drawdown of $10-million on the equity facility occurred on June 26.
Kropz Elandsfontein renegotiated and amended the BNP Paribas $30-million project finance facility in June, extending the first capital repayment to December 31, 2022, and quarterly thereafter to September 30, 2024.
The amended agreement caters for an interest rate of 6.5% plus US Libor, up to project completion (expected to be December 2022) and 4.5% plus US Libor thereafter, payable quarterly.
During the 2019 financial year, Kropz also concluded a competitive tender for updating the 2015 feasibility study for the Hinda phosphate project, in Congo-Brazzaville.
The Congo-Brazzaville government have since approved the new terms of reference for the updated environmental and social impact assessment (ESIA) and the port occupation agreement with the Port Authority of Pointe Noire was advanced during the period.
Additionally, Kropz decided to divest its interests in its Aflao project, in Ghana, and is currently in consultation with the project's other shareholders regarding the implementation of this decision, which may include other shareholders taking up the company's interest.
KEY FINANCIAL DEVELOPMENTS
Kropz raised $4.3-million through equity placing in June 2019 at an issue price of 17.6p a share.
In effect, this meant that cash at the end of the financial year stood at $16-million, while property, plant, equipment and exploration assets amounted to $145-million.
Kropz completed an equity placing with an existing investor and two directors for $353 595, before expenses on June 1. The proceeds of the placing will be used to progress the updated feasibility study at Hinda.
Kropz also completed an open offer to existing shareholders to raise up to $4-million before expenses. The open offer closed on June 26 and raised over $2.1-million.
The proceeds of the open offer will be used for general working capital purposes.