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Kropz holds steady cash of $12m; Elandsfontein work progressing despite some setbacks

1st September 2021

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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For the six months ended June 30, Aim-listed emerging African phosphate explorer and developer Kropz held steady cash of $12-million, the same value it held at the period ended December 31, 2020.

During the period under review, the company also increased its property, plant, equipment and exploration assets from $159-million, to $180-million, while restricted cash in terms of the amended facility agreement between Kropz Elandsfontein and BNP was $5-million, down from $7-million as at December 31, 2020.

Kropz’s trade and other payables at the end of the period was $5-million, the same value as it was at December 31, 2020.

Also during the period under review, Kropz secured a further convertible loan facility of up to $5-million (not exceeding a maximum of R85-million) from parent company African Rainbow Capital (ARC), to be used exclusively for the Hinda updated feasibility study and for general corporate purposes.

From this facility, Kropz drew down $2-million on March 10, and another $2-million on June 23, with a further $1-million remaining undrawn as at June 30.

The fourth drawdown on the $40-million original equity facility in respect of the Elandsfontein project, occurred on March 10 for $7-million, while the fifth drawdown occurred on June 23 for $11-million. As such, $3-million remains undrawn at the period end.

OPERATIONS

At Kropz’s Elandsfontein operation, significant progress continued to be made, with earthworks and civil construction now complete.

The outstanding appeal against the Elandsfontein water-use licence was heard from February 1 to 4, during which all evidence was heard by the Water Tribunal.

The Water Tribunal issued a directive to all parties, setting out the dates to be met for heads of arguments, to enable a ruling on March 10.

The appellant was subsequently granted two postponements for submitting its heads of arguments, which has delayed the date of the ruling to possibly September.

Also at Elandsfontein, Kropz reports, owing to a large number of critical path and near critical path items being managed concurrently, a number of minor setbacks have been encountered in the project, pushing the target date for commissioning later into the fourth quarter of this year.

These setbacks included a shortage of steel and industrial oxygen owing to the Covid-19 pandemic and days lost as a result of adverse weather conditions and illegal work stoppages.

In addition, fabrication, installation and assembly of structural steel and plate work is nearly complete, and all major mechanical equipment is installed at Elandsfontein, with electrical and instrumentation installation progressing well.

In preparation for operational readiness, the mining, plant operations, concentrate hauling, and port handling contracts are in the final stages of negotiation.

However, a funding shortfall of about $8.5-million is expected in respect of the commissioning and ramp-up of Elandsfontein in the fourth quarter of this year and the first quarter of 2022 before first revenue from the sale of Elandsfontein rock is expected in the first quarter of 2022.

In this regard, Kropz’s management is investigating various alternatives to bridge the respective funding shortfalls to ensure the smooth commissioning and ramp-up of the project through to first product exports.

At Hinda, Kropz appointed Hatch to complete an updated feasibility study and received authorisation to update the environmental and social impact assessment from Congo-Brazzaville’s Environment Minister on June 25. The updated feasibility study is expected before year-end.

At the Aflao operation, Kropz divested its 50% plus one share interest on February 16.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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