Kropz hints at more funding required for Elandsfontein
Aim-listed emerging phosphate miner Kropz says its original equity facility funding may not be sufficient to commission the Elandsfontein project during the fourth quarter, depending on how the rand strengthens against the dollar.
The company announced on June 30 that the project, which is based in South Africa’s Western Cape province, continued to progress within budget and should be commissioned in the fourth quarter.
While earthworks and civil construction on the project are complete, fabrication, installation and assembly of structural steel, platework and piping is ongoing.
The company said the funding shortfall relates to the original equity facility it has in place with African Rainbow Capital (ARC).
Kropz entered into the original equity facility with ARC in May 2020 for $40-million (a maximum of R680-million). This, together with existing cash of $12-million, or about R200-million, at that time, was being used to develop Elandsfontein.
The company had subsequently entered into a further equity facility related to the Hinda project, in Congo-Brazzaville, also with ARC, while it undertook a placement in May 2020 that raised $2.1-million for working capital purposes.
Meanwhile, Transnet and Elandsfontein are working on a revised solution for the export of Elandsfontein’s phosphate rock product. Following several meetings, Transnet has given assurances to deliver a long-term port access agreement for the export of Elandsfontein’s phosphate rock through the Port of Saldanha Bay.
Exports through Cape Town will be included in the agreement as a mitigation measure, in the event that capacity through Saldanha is unavailable for a limited period of time.
Moreover, Kropz said its updated feasibility study for the Hinda project was progressing well.
The updated study will target a phased approach in line with the terms of the mining investment agreement, with initial production of one-million tonnes of phosphate rock a year.
A second phase production ramp-up of two-million tonnes a year will be evaluated.
The updated feasibility study is expected to be completed by the end of September.
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