TIDMAFP
RNS Number : 0994W
African Pioneer PLC
20 December 2021
20 December 2021
African Pioneer Plc
("African Pioneer" or "the Company")
Ongombo Project, Namibia - Resource Update,
Scoping Study and Submission of Mining Licence Application
African Pioneer plc ("APP" or the "Company"), the exploration
and resource development company with projects located in Namibia,
Botswana and Zambia, is pleased to provide an update on the 85%
owned Ongombo Copper Mine Project ("Ongombo" or the "Project")
situated in Namibia and to inform shareholders that a Mining
Licence Application ("ML" or the "Licence") has been submitted to
the Ministry of Mines and Energy.
3.76 Mt increase The Ongombo Mineral Resource has increased by
in Measured 3.76 million tonnes in the Measured & Indicated
& Indicated category to 10.47Mt @ 1.4% Cu, 7g/t Ag at a cut-off
Mineral Resource of 1.0% Cu, with 0.35g/t Au categorised as Inferred
following a JORC (2012) compliant review by external
consultant, Red Bush Analytics.
-------------------- ------------------------------------------------------
Positive Scoping The base case of the Scoping Study by Mine design
Study Conclusions specialists, Practara Consulting, generated a
post-tax NPV of US$39 million using a 10% discount
rate and an IRR of 27.7%,with payback from first
production estimated to be 2.4 years.
Practara considers that the economic study for
Ongombo meets the "Criteria for Reasonable Prospects
for Eventual Economic Extraction".
-------------------- ------------------------------------------------------
Mining Licence A Mining Licence application has been submitted
submitted to the Ministry of Mines and Energy of Namibia.
-------------------- ------------------------------------------------------
Partners to Windhoek based Shali Group in conjunction with
manage application Avanti Resources has been engaged to follow through
with the Ongombo Copper Project Mining Licence
application
-------------------- ------------------------------------------------------
Met test work Metallurgical test work to commence early in
the New Year
-------------------- ------------------------------------------------------
Geophysics Possible deposit extensions to be investigated
planned by geophysics
-------------------- ------------------------------------------------------
Executive Chairman, Colin Bird said:
"The Company intends to progress all pertinent matters in order
to bring the proposed mine into operation as soon as possible and
will provide further updates as appropriate. As an order of
magnitude, we are targeting a mine to process some 400-500Kt per
annum with a copper production in the region of some 7-8Kt per
annum. This mining plan is coincident with our stated ambition to
join the small copper mining sector which internationally has
largely been eliminated and, in our opinion, will be an important
component of tomorrow's copper production. The deposit limits are
not yet fully defined and we will be carrying out further
investigations to either increase mine production or extend mine
life."
Mineral Resource Estimation
Red Bush Analytics has re-worked all the historical drilling
data from Ongombo generated by Gold Fields Namibia. In addition,
more recent drilling by Namibian Copper in 2014, and the Shali
Group in 2017, has been incorporated into the database. The updated
2021 Mineral Resource Estimation incorporates a total of 184
validated holes. These comprise 195 intersections from 153 Gold
Fields holes drilled in the 1980's to early 1990's, 2 holes from
the 2008 Namibian Copper (NCO programme), 23 holes from the 2014
NCO programme, and 6 holes from the 2017 Shali Group programme.
The revised JORC (2012)-compliant mineral resource estimate,
using a 1.0% Cu cut-off, increases the quantity of Measured and
Indicated Mineral Resources by 3.76Mt to 10.47Mt at a grade of
1.39% Cu (previously 1.52% Cu), compared to the 2013 Coffey Mining
report, and all Measured Resources have been re-classified as
Indicated. The re-classification is due to the inclusion of the
2014 drilling which has no borehole deviation survey data
available. The increase in tonnage is due to inclusion of
downgraded 2013 Measured Mineral Resources, addition of new
material from the 2014 drilling and re-evaluated tonnages due to
reinterpretation of structure and statistics. The Au grade has also
been reassessed and has been increased to 0.35g/t. Due to high
level of uncertainty related to the scarcity of gold data, all Au
resources are classified as Inferred Resources.
The resource estimate also includes a further 1.65Mt @ 1.37% Cu
in the Inferred Resource category.
Mineral Resources as at 30 September 2021 - JORC (2012)-compliant*
In situ tonnes & grade at 1.0% Cu
cut-off
----------------------------------------
Resource Category Tonnes Cu Ag Au
(Mt) (%) (g/t) (g/t)**
---------- ------- ------- ----------
Measured
---------- ------- ------- ----------
Central Shoot 0 - - -
---------- ------- ------- ----------
East/Ost Shoot - - - -
---------- ------- ------- ----------
Indicated 10.47
---------- ------- ------- ----------
Central Shoot 3.67 1.61 7.06 0.35
---------- ------- ------- ----------
East/Ost Shoot 6.80 1.27 6.9 0.35
---------- ------- ------- ----------
Total Measured & Indicated 10.47 1.39 7.0 0.35
---------- ------- ------- ----------
Inferred
---------- ------- ------- ----------
Central Shoot 0.39 1.38 7.0 0.35
---------- ------- ------- ----------
East/Ost Shoot 1.26 1.37 7.4 0.35
---------- ------- ------- ----------
Total 1.65 1.37 7.3 0.35
---------- ------- ------- ----------
* All figures refer to the total Project Mineral Resource
** All Au is classified as Inferred
Scoping Study
A detailed review and upgrade of the 2014 Coffey Mining Scoping
Study was carried out by Johannesburg based mine design specialists
Practara Pty Ltd ("Practara").
The updated economic evaluation was based on ore grades of 1.4%
Cu, 6.62g/t Ag and 0.32g/t Au. The base case and two alternative
studies all generate a positive NPV, with the base case producing
the most optimal outcome. Sensitivity analysis demonstrates that
the Project is naturally most sensitive to Cu price, FX, and Cu
grade.
Economic analysis with costs in Namibian dollars (N$) yielded a
positive business case for the Project and generated a post-tax NPV
of US$39 million using a 10% discount rate and an IRR of 27.7% .
The peak funding requirement is estimated at US$50 million and
payback from first production is estimated to be 2.4 years.
Practara considers that the new economic study of the Ongombo
Project meets the Criteria for Reasonable Prospects for Eventual
Economic Extraction. The key results of the base case in the
Practara scoping study are summarised in the table below.
Metric UoM Result
------------------------------ -------------------- -------
Business Returns:
-------------------------------------------------------------
Net Present Value (Post-Tax)
* US$ million ** 39
------------------------------ -------------------- -------
Internal Rate of Return
(Post-Tax) % real 27.7%
------------------------------ -------------------- -------
Payback Period (from 1st
Production) years 2.4
------------------------------ -------------------- -------
US$ million (real)
Peak Funding ** 50
------------------------------ -------------------- -------
EBITDA Margin % 41%
------------------------------ -------------------- -------
Capital Efficiency (NPV
/ CapEx) % 93%
------------------------------ -------------------- -------
Note
* The NPV was calculated using a 10% discount rate and a copper
price of US$3.72 /lb.
** FX rate used to convert N$ to US$ is US$ 1 = N$16.76
Metallurgical Test Work
Planning is under way for a large diameter diamond drilling
programme early in 2022 to obtain representative ore samples for
metallurgical test work. This test work will provide guidance
regarding the optimal processing route for the Ongombo ore.
Geophysical Programme
Namibian based EM and Natural Source Audio-Magnetic (NSAMT)
specialists, Gregory Symons Geophysics, have been commissioned to
re-work all available NSAMT data at Ongombo. The NSAMT technique is
a useful aid to detecting mineralisation at Ongombo and, in
particular, can be used to indicate potential for deeper extensions
to the deposit down-plunge and down-dip.
African Pioneer Plc
Colin Bird
Executive Chairman +44 (0)20 7581 4477
Beaumont Cornish (Financial Adviser)
Roland Cornish +44 (0) 020 7628 3396
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Qualified Person:
Technical information in this announcement has been reviewed by
Edward (Ed) Slowey, BSc, PGeo, a technical adviser to African
Pioneer Plc. Mr Slowey is a graduate geologist with more than 40
years' relevant experience in mineral exploration and mining, a
founder member of the Institute of Geologists of Ireland and is a
Qualified Person under the AIM rules. Mr Slowey has reviewed and
approved this announcement.
Glossary
A 'Mineral Resource' is a concentration or occurrence of solid
material of economic interest in or on the Earth's crust in such
form, grade (or quality), and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade (or quality), continuity and other geological characteristics
of a Mineral Resource are known, estimated or interpreted from
specific geological evidence and knowledge, including sampling.
Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured
categories.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which quantity, grade (or quality), densities, shape
and physical characteristics are estimated with sufficient
confidence to allow the application of Modifying Factors in
sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
An 'Inferred Mineral Resource' is that part of a Mineral
Resource for which quantity and grade (or quality) are estimated on
the basis of limited geological evidence and sampling. Geological
evidence is sufficient to imply but not verify geological and grade
(or quality) continuity. It is based on exploration, sampling and
testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill
holes.
"Ag" Silver
"Au" Gold
"Cu" Copper
"g/t" grammes per tonne
"Kt" thousand tonnes
"Mt" million tonnes
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