PERTH (miningweekly.com) – Phosphate producer Avenira has revealed a new strategic plan for its Baobab project, in Senegal, that will require additional funding of more than A$17-million.
Avenira has submitted an application to convert is current small mine permit at Baobab into a full exploration permit, which if granted, will give the company the foundation for a production capacity expansion, and would ensure an extended project tenure.
The company told shareholders on Friday that the board had approved a new strategic plan, which would be undertaken in two stages, to optimise the existing ore beneficiation unit and convert Avenira into a leading supplier of fertiliser.
Stage 1 of the new strategic plan will deliver a capacity and performance expansion of the existing Baobab processing facility. A flotation line will be added to improve phosphate recovery from 50% to about 70%, and to reduce the silica assay of the Gadde Bissic phosphate rock concentrate product.
A drying process unit will also be added to control product moisture at the commercially required level, including during the annual wet season.
“Stage 1 is intended to increase current production to the 500 000 t/y level and to improve product quality, opening a wider segment of the market to our product,” said Avenira CEO Louis Calvarin.
Stage 2 of the plan will see the construction of a second production line, delivering about one-million tonnes of additional capacity.
The resulting 1.5-million tonnes a year of capacity will provide Avenira with sufficient product to supply a dedicated phosphoric acid facility, which Calvarin said was a long-term strategic objective of the company, while also continuing to grow its relationship with the phosphate rock customers.
To achieve its new strategic plan, Avenria will need to raise additional capital, with the company saying on Friday that it would undertake three funding streams.
The first would see Avenira enter into binding agreements with each of its two major shareholders Agrifos Partners and Tablo Corporation, whereby Agrifos will provide an unsecured bridge loan of $1.44-million and Tablo will provide an unsecured bridge loan of $2.16-million, each at a 6% interest rate, and to be drawn down progressively.
The second funding stream will come from a non-renounceable pro-rata entitlement offer, which was expected to raise a minimum of A$7-million and a maximum of A$13-million.
The entitlement offer will take place within the next five months, and will be