Name and Location
Panda Hill niobium project, Tanzania.

Client
Cradle Resources.

Project Description
The scoping study completed on the Panda Hill project has indicated the potential for a highly economic project, generating substantial cash flow at current niobium prices for a relatively low capital outlay. The mineral resource estimate used for the study totalled 81.8-million tonnes at 0.52% niobium pentoxide (Nb₂O₅) for 423 000 t of contained Nb₂O₅, with 76.4-million tonnes at 0.51% Nb₂O₅ of inferred material and 5.4-million tonnes at 0.62% Nb₂O₅ of indicated material.

The base case of the scoping study envisages a two-million-tonne-a-year operation, with a life-of-mine of about 28 years, producing about 4.8-million kilograms of niobium a year, based on a mine schedule that prioritises the indicated resource for plant feed.

A staged development, which will increase the mill throughput from an initial one-million tonnes a year to 2.3-million tonnes a year, could deliver between 2.6-million and 5.4-million kilograms of niobium a year over a 27-year mine life.

Value
The base case is estimated at $185-million.

The staged case will cost about $125-million to develop.

Duration
Not stated.

Latest Developments
A prefeasibility study (PFS) is expected to be completed by the end of this year.

Cradle has started activities for the environmental- and social-impact assessment (ESIA), with the ESIA terms of reference submitted to the Tanzanian Environmental Ministry.

The baseline studies are planned for the next phase, with full ESIA approval expected before the completion of the definitive feasibility study (DFS) in 2015.

Meanwhile, Cradle has reached an agreement with Africa-focused Tremont Investments to fund the Panda Hill project beyond the DFS stage.

Under the terms of the agreement, Tremont will earn up to a 50% interest in the project by investing about $20-million. The Tremont interest in the project will be acquired through a share subscription in a newly incorporated company called Panda Hill Tanzania, which will hold the rights over the Panda Hill project.

Tremont will subscribe the first $5-million within the next 15 business days and could elect to make subsequent subscriptions of $5-million each.

The DFS for Panda Hill will likely be completed once Tremont has invested about $15-million, with any additional subscription going towards project development.

The newly formed Panda Hill Tanzania will pay Cradle 7.5% of the funds subscribed by Tremont as partial reimbursement for previous development expenditure.
Cradle is also working on additional smaller funding, at parent company level, to pay existing creditors and to provide a working capital buffer.

The raising will likely be completed along with the Tremont subscription.

Key Contracts and Suppliers
MDM Engineering Group (PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Cradle Resources, tel +61 8 9389 2000, fax +61 8 9389 2099 or email admin@cradleresources.com.au.
MDM Engineering Group, tel +27 11 993 4300, fax +27 11 886 9306 or email info@mdm-engineering.com.