Kwale mineral sands project suffering delays in troubled Kenya, budget cut

18th January 2008 By: Dennis Ndaba

Delays have prompted Toronto-listed miner Tiomin Resources has cut its Kwale minerals-sands project construction budget in troubled Kenya to $200 000 a month - and will reduce it further if need be.

Tiomin project coordinator and investor relations officer Joyce Misoi tells Mining Weekly that a delegation from the Jinchuan Group, which now holds 20% of Tiomin, visited Kenya late last year to conduct a cost-lowering project evaluation.

By acquiring 72 521 134 shares at C$0,15 a share, Jinchuan has invested C$10,9 million in Tiomin, strengthening Tiomin's cash position to C$28-million.

However, the project's future remains contingent on the government of Kenya completing outstanding issues and on international financing.

"We want to resolve the issues in Kenya permanently, which may include developing the Kwale project ourselves," says Misoi, adding that Tiomin will, in future, focus on countries with mining experience.

Kwale is said to be capable of yielding 330 000 t/y of ilmenite, 75 000 t/y of rutile and 40 000 t/y of zircon for the first six years of an 11-years mine life.

Besides Kwale, Tiomin has 49% of the Pukaqaqa copper project in Peru, where its 51% partner Milpo has drilled 39,533 m involving 186 holes.

"Peru is a mining-friendly country and the challenges there are of a more normal technical nature," says Misoi.