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Tin mining set to return to South Africa after quarter-century break

Bushveld Minerals' Anthony Viljoen
Bushvel Minerals' Morris Viljoen

Aim-listed Bushveld Minerals CEO Fortune Mojapelo tells Mining Weekly Online’s Martin Creamer that it is 12 months away from recovering tin from a dump in South Africa’s prospective Bushveld Complex, best known for its platinum and chrome. Photographs: Duane Daws. Video: Darlene Creamer and Duane Daws. Video Editing: Darlene Creamer.

Bushveld Minerals' Anthony Viljoen

Photo by Duane Daws

Bushvel Minerals' Morris Viljoen

Photo by Duane Daws

2nd April 2014

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – Tin mining is poised to be resuscitated in South Africa 25 years after the tin price collapsed and forced South Africa’s once resplendent Zaaiplaats and Rooiberg tin flagships to close.

Currently, no tin is mined in South Africa, but a restart is now on the cards, first through a project to recover the metal from the old Zaaiplaats tin tailings dump, and then to use that cash to build opencast mines in an area where tin forms the uppermost layer of the phenomenal northern Bushveld Complex, a veritable Aladdin’s Cave of mineral treasure.

Studies indicate that there are between 2 600 t and 4 500 t of contained tin in the historic dump, left after Zaaiplaats delisted from the Johannesburg Stock Exchange in the nineties.

Now, the London Aim-listed Bushveld Minerals is looking forward to recovering the tin from the cassiterite material lying on surface, which has already been milled.

Bushveld Minerals CEO Fortune Mojapelo tells Mining Weekly Online in the attached video interview that his company expects to turn the dump to positive account fairly quickly and without having to spend a lot of money.

He estimates that it will require a capital expenditure of $1.5-million to $3-million to bring the asset into production over a timeline of 12 to 15 months, provided a water-use permit can be obtained from the regulatory authorities as part of the environmental-impact assessment that must be undertaken.

The company has acquired 87% of the dump for R10-million from Sephaku Tin, which owned 40% of it, and the Brent Trust, which held the remaining 60%.

The acquisition is, however, conditional on the outcome of technical due diligence and evaluation of the Zaaiplaats dump, which Bushveld Minerals must complete by May 20.

Financially underpinning the deal is a new funding arrangement that Bushveld Minerals has clinched with capital provider Darwin Strategic.

BUOYANT TIN PRICE

“We’re very bullish on the tin price, which should rise to at least $30 000/t in the medium term,” says Bushveld Minerals executive director Anthony Viljoen.

However, in its financial modelling, Bushveld is using a comparatively conservative tin price of between $18 000/t and $20 000/t.

Critical to the dump recycling project, which the company is confident it can deliver, will be the realisation of a marketable concentrate-grade product.

“We’ll be comfortable with a concentrate that is in the order of magnitude of 40% tin,” says Mojapelo.

Meanwhile, ground-penetrating radar technology, accompanied by limited drilling along the radar lines, is providing an accurate indication of the thickness and the extent of the dump’s tailings, Bushveld Minerals technical director and former professor at the University of the Witwatersrand Morris Viljoen tells Mining Weekly Online. (also see attached video)

The tin price, which is currently trading in the mid-$20 000/t range, has risen dramatically in recent years as a result of its greater use in electronic equipment, where it is substituting lead in solder because of lead’s detrimental affect on human health.

Supply is constrained, however, and the tin deficit on the London Metal Exchange is expected to worsen.

TIN TARGETS

Bushveld Minerals has identified five tin targets in its licence area, with the dump to be recycled sandwiched between 6 000 t of contained tin in coarse granite at Groenfontein and 12 500 t of contained tin at Zaaiplaats.

Both primary deposits are envisaged as future openpit quarry-type mines that are earmarked for collective development in the next four to five years.

At the same time, exploration of the remaining targets will continue, along with the Marble Hall project, a separate licence area that has another 18 000 t of contained tin, also close to surface.

Mobile processing platforms, which can be moved from one deposit to the other, will be deployed, as large single-deposit scenarios are not anticipated in the exploitation of the company’s tin assets, which are housed in the company’s wholly owned Greenhills Resources subsidiary.

Greenhills is envisaged as an eventual standalone tin entity that may be separately listed on the Aim, where there is no dedicated tin company, and other exchanges.

Bushveld Minerals aims to consolidate more than 50 000 t of near-surface tin assets that have the potential to be brought into production in the short term.

The company sees its early tin cash flow from the dump project as a grounding for the development of an Africa-wide tin company with a spread of producing tin mines backed by a range of blue-sky exploration targets across the continent.

FUNDING ARRANGEMENT

The junior company’s comparatively high cash balance of $16-million, and its recent funding arrangement with Darwin, collectively provide it with comfortable financial scope to fund the dump project that, in turn, promises to offer its own cash flow proposition.

“That said, we will look at strategic partnerships, particularly where they can help us to scale up our operations to build up an African tin portfolio,” Mojapelo adds to Mining Weekly Online.

The 50-million ordinary 1p Bushveld shares that Darwin bought for 5.7p a share will be traded into the market over the next 12 months, at Bushveld Minerals' sole discretion as to the number of shares traded and the timing of those trades.

The proceeds from those trades will come to the company, less any commissions due to Darwin, which will end up with 11% of the company’s issued share capital.

This flexible arrangement allows Bushveld Minerals to benefit from any appreciation in its share price and any high volume liquidity windows in the trade of its stock.

ONGOING EXPLORATION

The tin in the Bushveld Complex has accumulated in trap sites in the upper part of the granites, in pipe-like Zaaiplaats-type orebodies, in overlying vein-like Rooiberg deposits, and, in the case of Marble Hall, also breccia-like deposits.

All these geological models are being studied by Bushveld Minerals, which believes that significant potential remains, particularly for the low-grade material that it is targeting.

The Zaaiplaats and Groenfontein areas have been drilled out and the company is looking forward to relatively easy outcrop mining.
 

Edited by Creamer Media Reporter

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