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Nayega Manganese Project, Togo – New Ferromanganese Strategy, Definitive Feasibility Study and Mining Licence Update
Ferrex plc, the AIM quoted iron ore and manganese development company focused in Africa, has provided a strategic update from the 92,390Ha Nayega Manganese Project, held through Societe Generale de Mines, located in northern Togo. The Company is focussed on maximising the returns achievable from the Project and accordingly, will initiate a two phased approach in its development.
The first phase is focussed on developing a low-cost 250,000 tonnes per annum, 38% marketable manganese product open-pit mine in the near-term, and the Company provides an update in respect to the Definitive Feasibility Study below. Phase two will see the Company develop an in-country smelting facility to produce a valuable High Carbon Ferromanagnese alloy in Togo in the medium-term.
Overview:
Phase 1: DFS Status
· Design and schedules for a 250,000tpa manganese mine have been completed
· Tailings dam design and report complete
· Water borehole drilling complete for the plant’s operating requirements defined within 5km of the mine
· DRA, a leading South African gravity plant specialist, is due to finalise the processing and local infrastructure study in September 2014
· Environmental and social study submitted to Ministry of Environment with the permit award expected October 2014
· Mining Permit award expected Q4 2014
Phase 2: New Ferromanganese Strategy
· Scoping Study on a proposed sintering and blast furnace facility to produce c.60,000 tpa of a 74% HC ferromanganese alloy product completed
· Indicative operating costs of US$665/t placing it in the lowest quartile worldwide
· HC ferromanganese product currently sells CIF Europe for US$1,075/t, illustrating the large margin opportunity
· The ferromanganese operation has a NPV (10%) of c.US$100m and IRR of 45%
· Peak funding of US$55m for integrated mining and smelting operation
· Produces a cash flow of c.$20m pa
· Life of operation estimate increased 100% from 8 years to in excess of 15 years
Ferrex Managing Director Mr. Dave Reeves said,
“The DFS for the Nayega 250,000tpa manganese project is now nearing completion with finalisation of the technical aspects due in the next eight weeks. With the submission of the Environmental Permit Application and the completion of the associated on site workshop, it is anticipated that the Environmental Permit will be granted in early Q4 2014. The Ministry of Mines and Enrgy has stated that the government has hired a consultant to assist in the drafting and preparation of the mining permit and associated fiscal terms and that it anticipates that the Company will soon be invited to commence discussions on the proposed terms. On successful conclusion of these negotiations, the permit must then pass through all appropriate signatories and reviews in government before final sign off is obtained. We are informed that the timing on this process should be complete during Q4 of this year. This will be a major milestone in the development of Nayega and we thank the Ministries involved for their support and guidance to date.
“In addition, both the Company and the Government of the Republic of Togo are highly encouraged by the findings of the new Scoping Study and the possible production of ferromanganese in Togo. We will rapidly advance the testwork required for a Pre-Feasibility Study and hope to release this study within six months of the award of the Mining Permit. We believe that the ferromanganese operation could be constructed as a second phase once the main Nayega mining operation has reached steady state, and that it will greatly improve the profitability of the operation as well as the length of operation. With the study showing a very low cost of production, this could transform this project in to a long life, high margin cash producing asset for the company.
“The ferromanganese project will also provide a boost to Togo via additional employment, skills transfer and increased tax receipts. We believe it will be the only blast furnace operating in central and West Africa and it fully supports the region’s desire to have value-add projects in the minerals industry seriously investigated.”
