Diversified miner and explorer Bauba Resources now owns 74% of the entire issued share capital of exploration company Nuco Chrome and the Kookfontein mine, located in South Africa’s North West province.
Nuco has started site establishment of the opencast upper group two (UG2) reef and expects a monthly steady-state production of 30 000 metric tonnes, with build-up starting in October.
The current UG2 resource is estimated at 402 076 t.
Further drilling, consisting of eight reverse circulation (RC) drillholes and nine diamond drill (DD) holes, was completed in the first quarter of this year, with chemical analysis by SGS South Africa in progress.
Indications from the initial wireframe modelling show a potential increase in resources of 291 005 t, which will bring the total estimate into the region of 693 081 t.
This work is still in progress and will be reported on once completed, Bauba said on July 5.
Further, Bauba is also in the process of concluding an offtake transaction with a nearby platinum-group metals (PGMs) concentrator, which, if successfully concluded, will allow Bauba to capitalise on current strong PGM prices, which are anticipated to generate considerable cash flows.
These cash flows may then fund the further expansion of Nuco through the future development of its additional and significant chrome ore resource, a chrome ore spiral wash plant, associated tailings storage facility and potentially a PGMs flotation plant to capture the PGMs in the fine chrome tailings, Bauba commented.
Owing to the ore being relatively shallow and easily accessible at Kookfontein, the company said, the mine has attractive economics with a very competitive operating margin and low start-up capital requirements, which are anticipated to result in a quick pay-back period.
The Kookfontein mine has a life-of-mine of more than ten years, with the current estimated resource, excluding the UG2, totalling about 10.1-million tonnes.
“The low strip ratio of the Kookfontein mine will ensure low mining costs and that the chrome ore and PGMs produced are at a low cost and are sustainable from an operational perspective” said Bauba CEO Nick van der Hoven.