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SOUTH Africa's ability to attract start-up funds for junior exploration and exploration activities has declined in recent years, according to S & P's Global Market Intelligence research on mineral exploration in Africa.
With exploration investments of $ 97.8 million in 2018, the country lags behind the Democratic Republic of Congo ($ 269.5 million), which ranks first, Burkina Faso with $ 149.10 million in early-stage investments, Ghana ($ 102.90 million), Côte d'Ivoire ($ 101.60 million) and Mali, which attracted a $ 99.60 million investment for its junior mining sector.
In parallel with the often-mentioned political uncertainty and political instability, the lack of tax incentives and concessions for early-stage investment is increasingly seen as the driving force behind the steady decline in investment South Africa.
Here are some of the African and non-South African juniors who deserve to be watched over the next few years.
MOD Resources
MD: Julian Hanna
Flagship project: T3 copper project
Location: Botswana
A feasibility study carried out on the MOD T3 copper project, listed in Sydney and London, has defined an operation that is expected to produce 28,000 tonnes of copper per year and 1.1 million ounces of copper. money per year over a lifetime of 11.5 years. Targeted production for the first quarter of 2021. Development of the open pit is expected to begin in the second half of 2019, with the treatment plant being designed for an average flow of 3 Mt / y.
MOD is also undertaking additional exploration drilling to determine the broader potential of its 11,700 square kilometer-dominated licensed holdings in the copper belt, which is expected to significantly increase copper production.
Provisionally, the company is using a 60/40 T3 debt financing model and is currently negotiating a $ 182 million loan with banks to fund the exploration and development of the project.
In January, MOD Resources rejected a $ 63 million takeover bid from Sandfire Resources, which it said undervalued the company, resulting in a 50% increase in the group's share price. At the beginning of June, MOD shares traded at A $ 0.30.
Cupric Canyon
CEO: Johan Ferreira
Flagship project: copper and silver project of Khoemacau
Location: Botswana
The Khoemacau Flagship Project, located in Cupric Canyon, has total mineral resources of 91.7 million tonnes and includes more than 4,040 square kilometers of mineral claims.
In February, the company announced the signing of a $ 565 million financing program for the construction of its 3.6 Mt / y start-up project in Khoemacau. The first production of copper concentrate is scheduled for the first half of 2021, with an initial average production of 62,000 t / y of copper and 1.9 million oz of silver.
The company is currently evaluating a phased expansion project to increase production to more than 100,000 t / y of copper concentrate and three million oz of silver. The long-term plan is to expand Khoemacau to about 5.8 million t / y.
Golden Star Resources
CEO: Sam Coetzer
Flagship Project: Prestea Gold Mine Projects and Wbada
Location: Ghana
The companies listed in Toronto and Ghana, Golden Star, believe that there is considerable potential to increase its mineral reserves and the life of its operations at the gold mines of Prestea and Wbada, Ghana .
The company's exploration budget in 2019 is $ 13.4 million, or $ 9.8 million in Wbada, $ 1.5 million originally dedicated to Father Brown, adjacent to Wbada, and 1, $ 6 million to Prestea.
An expansion and drilling program at Prestea has confirmed the extensions of deposits to the north of existing reserves, which could be exploited over the next two years. The exploration program for the second and third quarters of 2019 will focus on further delineation of the mineralization to eventually bring it into the mineral reserves.
Exploration drilling at the company's second mine, Wbada, in Ghana, increased the mineral reserve by 47 percent, after mine depletion, to about 834,000 tonnes. Overall, Golden Star 's proved and probable total mineral reserves increased by 6% to 1.8 million oz of gold.
The company expects to produce between 220,000 and 240,000 oz of gold at an operating cost of 620 to 680 USD / ounce in 2019. Golden Star Resource shares have appreciated 3.9% over the first five years. in 2019, to reach $ 3.45 on June 6.
Colibri Resources
MD: Dan Betts
Flagship project: Yanfolila Gold Mine
Location: Mali
After paying its first gold medal in December 2017, the Hummingbird mine, Yanfolila in Mali, was able to switch to large-scale production in the first quarter of 2018. The company produced 91,620 oz of gold in 2018, which sold at an average price of US $ 1,271 / oz.
A second $ 13 million ball mill will be installed in the second half of 2019, which should increase the plant's production capacity by about 24% or 1.2 Mt / yr. at 1.4 Mt / year. The London-listed company is currently undertaking an expansion project in Yanfolila, which will aim to develop the Gonka deposit, located 5 km from the treatment plant.
Hummingbird is also continuing its Dugbe project in Liberia and became the first company in 15 years to reach the final stages of approving a mining development agreement with the Liberian government. The Hummingbird share price hit its all-time low in 52 weeks early June, trading at $ 0.16.
Shanta Gold
CEO: Eric Zurrin
Flagship project: new Luika gold mine
Location: Tanzania
Shanta Gold, a publicly traded company, holds exploration properties covering more than 1,560 square kilometers of Lupa Goldfield surrounding its New Luika gold mine in Tanzania, which produced 81,872 oz in 2018. Exploration work in the Bauhinia Creek deposit has highlighted the extension of the mine's life. in depth and adding new ounces to the mine plan.
Shanta also owns Singida, an exploration and development project in central Tanzania. The Company plans to proceed with a targeted offering of shares with a minimum capital of $ 20 million through an initial public offering (IPO) on the Dar es Salaam Stock Exchange to fund the development of the project.
The IPO is expected to last from 6 to 12 months.
Singida will cost approximately $ 19 million in pre-production and working capital expenditures, and its net present value is $ 31 million. After reaching a minimum of one year of 6.20 pence in October 2018, the Shanta stock price recovered to 6.50 p in June 2019.
Basic Resources
MD: Tim Carstens
Flagship Project: Toliara Mineral Sands Project
Location: Madagascar
The Base Resources subsidiary, Base Toliara, operates the 100% owned Toliara Mineral Sands project in southwestern Madagascar, which will produce ilmenite, zircon and rutile. The Australian publicly traded company announced in a pre-feasibility study in March that Toliara would produce 806,000 tonnes of ilmenite, plus additional tonnes of zircon and rutile on a 33-year mine.
The large Ranobe deposit underlies the Toliara Project and its mineral resources are estimated at 857 Mt, which is sufficient to support the life of the 40-year-old mine.
The ASX-rated foundation is considering a joint venture partnership to help finance Toliara's first phase of development, worth $ 439 million, and has planned a second phase of $ 67 million. The construction of Toliara was planned from the first quarter of 2020, once a final feasibility study would have been approved, followed by an investment decision.
Base Resources also built and operates the Kwale Mineral Sands Mine, Kenya's largest mine. After peaking at A $ 0.32 in March, the company's share price returned to US $ 0.24 in June 2019.
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