African Minerals Ltd De-sliming DSO Fines for enhanced product quality (5676K)

TIDMAMI

RNS Number : 5676K

African Minerals Ltd

26 June 2014

African Minerals Limited

("African Minerals", "AML", or "the Company")

De-sliming of DSO Fines for enhanced product quality

African Minerals Limited is a mineral exploration, development and mining company, and is the developer and operator of the Tonkolili iron ore mine in Sierra Leone. The Company today provides an update regarding enhancement to its product quality and its impact on our wet season strategy.

Highlights

-- At present our production consists of fines, lump and All in 32 ("A32"). This product mix has historically caused material handling problems in the port, where high clay levels have lowered throughput capacity, and has produced fines with high moisture content that requires significant re-handling and drying before it can be shipped

-- The establishment of new screening and de-sliming circuits, expected to be fully commissioned in Q3 2014, will create clean, free draining products with low moisture content and better product quality, which are expected to be shippable all year round

-- Fines material below 10mm will be screened to +2mm to create a new intermediate product, a Group C cargo, that has no transportable moisture limit ("TML") restrictions and can be shipped all year round

-- De-sliming of the -2mm +0.15mm fraction will remove fine sticky clays and ultrafine material from these fines to create a clean free draining higher quality product, with low moisture content and enhanced material handling characteristics

-- As a result, product mix at Tonkolili will in future include only de-slimed fines, intermediate product, and lump, until the establishment of production of the friable hematite concentrate

   --      Discounted All In 32 will be phased out completely during Q4 2014

The Company has previously highlighted a number of technical interventions that it had proposed regarding materials management, particularly in the wet season. The most significant of those is the establishment of screening and de-sliming circuits, which are being installed to further treat the sub 10mm fines material, which contains fine sticky clay and ultrafines. Those circuits will be fitted to our 1B and 1D processing plants which are currently producing this fines product, and will be fitted to the new 1G process plant once it is commissioned in Q3 2014.

In the screening stage the -10mm fines material is classified into two fractions that are above 2mm (now called "intermediate product") and below 2mm. The intermediate product is expected to be classed as a Group C cargo under the International Maritime Solid Bulk Cargoes Organisation code, and considered incapable of liquefaction. This product does not have a moisture limitation and can be shipped all year round.

The de-sliming process is centred around a series of constant density ("CD") thickeners, which are industry standard unit processes, which effectively separate the fine sticky clays and ultrafine material from the clean iron ore product. This low-cost and low-tech separator is inexpensive to build, inexpensive to run, and can be finely controlled by simply varying the water flow characteristics. The process creates a free draining product with enhanced moisture and handling characteristics. De-slimed fines will still be classed as a Group A cargo, but with a lower moisture content than that which is currently being produced.

The current fines have a TML of between 13.1% and 14.8% and have been shipped with an average moisture content of 11.6% in Q1 2014. Indications are that the de-slimed fines product will have a moisture level of below 10% and is also expected to be shippable all year round.

It is expected that the annual product split, once the DSO de-sliming circuits are fully commissioned, will be 49% lump, 17% intermediate product, and 34% of de-slimed fines. The mass yield from headfeed to product is expected to be c85%, compared to the mass yield of 81% in Q1 2014.

Fine DSO material below 150 microns that reports to tailings after de-sliming will act as additional ore feed for the friable hematite concentrator stage, the full parameters of which will be announced shortly.

With 1B and 1D de-sliming circuits added in July 2014, and 1G retro-fitted at the end of the year, it is not expected that any A32 will be produced after the end of 2014, once 1G wet process plant is fully commissioned.

Bernie Pryor, Chief Executive Officer of African Minerals, said:

"The establishment of these screening and de-sliming circuits will be a game changer for our wet season strategy, in that most if not all of our product will now be able to be shipped year round. Not only that, but the removal of fine sticky clay from our material, and of course the eradication of A32 itself, will greatly improve our port material handling characteristics. With a year round shippable product, and cessation of A32, we also expect our price realisation to improve meaningfully.

We look forward to communicating more of this strategy, which forms the foundation of our friable hematite concentrator plans, shortly."

Contacts:

African Minerals Limited

+44 20 3435 7600

Mike Jones

Tavistock Communications

+44 20 7920 3150

John West / Jos Simson / Nuala Gallagher

Jefferies

+44 20 7029 8000

Nick Adams / Alex Collins

About African Minerals

African Minerals operates the Tonkolili Iron Ore Project (the "Project") in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The Project, which currently has a 60+ year mine-life, is being developed in a number of staged expansions. In 2013, African Minerals completed sales of 12.1Mt to its customers. The current year sales guidance is for 16-18Mt of exports as the operations focus on operating at the 20Mtpa run rate design capacity.

Phase II expansion contemplates the production of an expanded tonnage including the establishment of a high grade concentrate product with the project ramping up to 25Mtpa.

The Company has also developed significant port and rail infrastructure to support the operation of the Project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone ("GoSL") has a 10% free carried interest.

The Project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group ("SISG"), except for ARPS, which is currently owned 75% by AML and 25% by SISG, with the GoSL having the right to a 10% free carried interest from AML.

www.african-minerals.com

This information is provided by RNS

The company news service from the London Stock Exchange

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