Aim-listed investment company Kazera Global will acquire a 60% interest in Whale Head Minerals (WHM), which owns two heavy mineral sands (HMS) opportunities in the Port Nolloth/Alexander Bay area in South Africa's Northern Cape province, from Tectonic Gold for $250 000 in Kazera shares.
WHM is awaiting the grant of a mining permit over a 5 ha beach sand deposit at Walviskop. It plans to produce 6 000 t a month of HMS and generate a gross profit of more than $300 000 a month.
The project has been assessed by an independent third party who has concluded that it contains a Joint Ore Reserves Committee-compliant indicated mineral resource of 3.11-million tons at a zero cut off grade of 61.2% valuable heavy minerals. Of these, garnet and ilmenite predominate, with some zircon and some rutile.
The latter two minerals have been excluded for modelling purposes owing to their negligible contribution and high capital cost to separate.
Further, WHM has also applied for a prospecting right over the beach adjacent to the Walviskop permit area, which will allow up to five years to conduct exploration.
A combined life-of-mine of more than 25 years is forecast.
“The next few months will be revolutionary for the company. With the company on the verge of bringing its diamond and tantalum operations into profitable production, now is the perfect time to bring the HMS project on board.
"We have worked very closely with Tectonic, who have done a great job in adverse circumstances to progress the mining permit and the prospecting right. With the mining permit expected to be issued before the end of the year and the prospecting right lodged, we are now moving forward with negotiations with potential partners on setting up an HMS separation plant," comments Kazera joint CEO Dennis Edmonds.
Kazera intends to cooperate with an independent third party to build and operate a plant at its own cost to separate out the various component minerals, which will considerably increase profitability to WHM without increasing overhead.
Meanwhile, it notes that the HMS deposits in the vicinity of Port Nolloth/Alexander Bay contain substantial diamond deposits and HMS miners cannot get permission to mine them.
Conversely, the density of the HMS makes it prohibitively expensive for diamond miners to extract diamonds.
Another company Deep Blue Minerals has the right to mine diamonds in the areas in which WHM holds the rights to mine HMS. Efficiencies are expected to be achieved in the separation process, with the gravel containing diamonds to be separated from the sand that holds the valuable heavy minerals.
Deep Blue expects to generate about 300 ct a month of additional diamond production from the HMS operation.