TIDMSTGR
RNS Number : 8553H
Stratmin Global Resources PLC
26 June 2013
26 June 2013
StratMin Global Resources Plc
("StratMin" or the "Company")
Operations Update, Management Team Additions and Appointment of
Nomad & Broker
StratMin (AIM: STGR), the graphite production and exploration
company with assets in Madagascar, announces an Operations Update,
together with details of additions to operational management and
the appointment of a Nomad and Broker.
Highlights:
-- 3,130 tonnes of graphite bearing ore have been stockpiled for production
-- 204 tonnes of concentrate produced of a carbon purity of 65%
- 75% ready for immediate upgrade through re-processing
-- Low strip ratio of 0.14:1 (waste to ore) supports a low cost mining operation
-- Equipment purchased in Q1 2013 to optimise the performance of
the plant and the graphite production process, has arrived on site
and is in the final stages of installation
-- Production limited to trial runs whilst the plant upgrade and
optimisation process continues, continuous production scheduled to
commence in September 2013
-- Drilling rig for exploration and mine planning and laboratory
equipment to monitor and evaluate graphite production on site
-- SGS in South Africa performing metallurgical testing on 20kgs
of ore samples from the Loharano site to further optimise product
purity and recovery. Test results are expected to be received in
July 2013
-- Competitive interest in Lohorano's premium graphite
production has led the board to delay nominating a sole
distributer
-- Management team strengthened - highly experienced Mine &
Plant Manager and Country Manager have been appointed and are on
site, London based Managing Director identified for appointment in
July 2013
-- Peel Hunt LLP appointed as Nomad and broker effective immediately
Commenting on the announcement, Gobind Sahney, StratMin's
Chairman, said, "Since the Company's last update on 26 March 2013,
StratMin has made significant progress on its strategic objectives
to expand flake graphite production, improve operational management
and increase market awareness of StratMin. The progress has not
been without challenges but the Directors are focused on building a
company that will successfully deliver value over the months and
years ahead."
For further information please visit www.stratminglobal.com or
contact:
+44 (0) 20 7467
StratMin Global Resources Plc 1700
Gobind Sahney (Chairman)
Peel Hunt LLP (Nomad & Broker) +44 (0) 20 7418
Matthew Armitt / Harry Florry 8900
Tavistock Communications (Financial PR & IR)
+44 (0) 20 7920
Simon Hudson / Conrad Harrington 3150
OPERATIONS UPDATE
Production
The mine is currently in production using a conventional open
pit mining method, utilising dumpers and excavators to remove
overburden and ore. The mine strip ratio is calculated to be an
average of 0.14:1 (waste to ore) with minimal overburden
pre-stripping requirements. The production units are presently
exceeding plant capacity resulting in surplus ore of 3,130 tonnes
stockpiled at the plant available for processing. The low strip
ratio and soft rock ore body drives low operating costs which we
expect to be $650 - $700/t during the ramp up and $350 - $450/t in
steady state production.
A preliminary mining plan is in place, and while the plant
upgrades have been carried out, a significant amount of mine
preparation has taken place. Future ore blocks have been identified
within 500m from the processing plant and will be prepared in line
with the short to medium term mine plan supporting a low cost
mining model.
The mine is currently capable of producing 1,080 tonnes of ore
per day, of which 300 tonnes can be processed by the plant as
currently configured producing 9.8 t/d of concentrate representing
a yield of 3.25%. The current plan will see mine production
increase to 2,000 tonnes per day by Q4 2013, of which 600t/d will
be processed by the upgraded plant, producing 18.6 t/d of
concentrate representing a yield of 3.25%. By the end of the first
half of 2014 the mine capacity is expected to be 2,000 tonnes of
ore per day and the plant 1,600 tonnes per day producing 53t/d of
concentrate representing a yield of 3.25%. In addition, the Company
has 204 tonnes of concentrate of a carbon purity of 65% - 75% ready
for immediate upgrade
The ore occurs throughout the lateralized sections of the host
rocks and requires no crushing or milling. Graphite recovery will
be achieved by scrubbing and flotation methods and is expected to
produce a graphite concentrate of 90+% carbon content. As announced
previously new equipment was ordered and this included a
sophisticated drying plant and high capacity attrition scrubber
with trommel screen to remove excess clay and organic material from
the graphite.
The Company has experienced delays in the production of graphite
concentrate for two reasons:
1. Delays to the delivery of the plant upgrade equipment from
China. These delays have inevitably affected short term trial
production; and
2. A deliberate decision by the Board that it was in the best
interest of the Company for production to be limited to test runs
while installing the new equipment instead of a continuous
production cycle.
The optimisation of the new plant is continuing as planned. SGS
in South Africa is providing consultancy to define the exact
metallurgical composition of the ore and therefore the most
efficient methods to produce premium product. These results are
expected to be delivered by the end of July 2013. Meanwhile
mechanical calibration of the new and existing plant also
continues. The complete optimisation process is expected to finish
by September 2013.
Plant Development
As previously announced plant process equipment was purchased in
Q1 2013 to optimise the performance of the plant and the graphite
production process. The equipment purchased included processing
plant equipment, a drilling rig for exploration and mine planning,
and finally laboratory equipment to constantly monitor and evaluate
the graphite production from the plant.
Processing Plant
The processing plant equipment purchased included an ore
scrubber, additional flotation cells and a high speed drying
facility all of which are expected to achieve a concentrate with a
carbon content of over 90%, and to allow higher volumes. The
scrubber and the additional flotation cells were installed on
15(th) June and are in the process of being configured and
optimised with the drying plant to be completed in July.
Full time mining and processing activities are on schedule to
recommence in September 2013 following the completion of the
initial plant upgrade with plant output targeted to be around 180
tonnes per month ('tpm') and to then rise to 400tpm with the
introduction of an additional shift as part of the ramp up. The
Company has restated the production rate purposely to accommodate
the newly installed equipment and remains confident that the plant
will deliver our targeted 1,000tpm once the plant ramps up to full
capacity with the additional purchase of an upgraded flotation
circuit and excavation equipment.
On-Site Infrastructure
The Company purchased an onsite laboratory as part of the Q1
2013 capital expenditures. The laboratory is currently being
configured and once completed will provide continuous quality
control throughout production and allow the Company's process
experts and geologists to optimise production quantity and
quality.
A cyclone proof shed to house the drying and bagging facility
has been erected and the drying facility for the graphite is
nearing completion with additional on-site housing constructed to
accommodate all personnel.
First Shipment
An initial shipment of 20 tonnes of graphite was sent to the USA
from the Port of Toamasina in March 2013. The first trial shipment
demonstrated StratMin's comprehensive solution to transport flake
graphite from the Company's mine in Madagascar to the seaborne
market.
The test results from the shipment confirm a majority of "large"
and "jumbo" flake size graphite with only a small percentage of the
smaller industry standard 80 mesh size. All graphite larger than
+80 mesh size is classified as large flake and flake larger than
+60 mesh is classified as jumbo flake. The results confirmed that
approximately 80% of the graphite sampled was "jumbo flake".
Sales and Marketing
Upon the commencement of full time production of graphite
expected in September 2013, following the completion of the plant
upgrade, the Company will make its first commercial shipment, which
is targeted to be completed by October 2013.
Once metallurgical work and plant optimisation has been
completed, the Company expects to sell its large flake product at a
premium to the smaller flake graphite product sold around the
world. Recent reported prices for this premium graphite product
range between $1,900 and $2,100 per tonne compared to between
$1,300 and $1,500 per tonne for the smaller flake product.
The Company continues to have active discussions with a select
number of graphite marketers. While it was the intention of the
Company to enter into an exclusive marketing agreement, competitive
interest in the Company's product has prompted the board to delay
nominating an exclusive agreement and wait until the plant reaches
full time production to achieve the best strategic outcome for the
Company.
Drilling and Exploration Programme
The Company acquired a drilling rig as part of its capital
expenditures in Q1 2013. The drilling rig has been commissioned and
planning has commenced on a first phase drilling program to upgrade
and expand the JORC compliant mineral resource.
The drilling program will comprise the drilling of 132 vertical
boreholes on 50 x 50 m grid spacing. Approximately 80 % of the
drill holes will be drilled to a maximum depth of 30m, and 20% of
the drill holes will be drilled to a maximum depth of 50m.
Drilling will take place covering the known mineralized area and
its projected extensions and infill drilling will be done where
necessary.
The drilling at Loharano will be carried out by an experienced
drilling team and supervised by the 'Qualified Person', as defined
by JORC, from Creo Design, Stratmin's technical consultant. Drill
holes will be fully cored (HQ and NQ diameter), with recoveries
generally exceeding 85% in the oxidized zone and normally over 97%
in fresh rock. Sample preparation will be completed locally and
analyses performed by the accredited Set Point Laboratories in
Johannesburg, South Africa.
The aims of the drilling program are to expand the JORC
compliant mineral resource and increase the Life of Mine:
1. At present the resource and Life of Mine calculation is based
on a depth of 7m below surface beyond which the mineralisation is
open ended at depth. Future mine planning requires establishment of
the depth which will significantly increase the resource.
2. Sampling, Core logging and sample custody will be carried
following standard operating procedures compliant with JORC
standards, and be used to calculate the resource according to JORC
definition and by industry standard geological modeling computer
software.
The existing resource was established to a depth of 7m on 25% of
the Lohorano project. The planned drill program is expected to
increase this at depth in its first stage and in its second stage
to explore the rest of the property. The Board are confident the
Lohorano property can support a larger resource.
MANAGEMENT TEAM
The Company is in the process of significantly upgrading its
operational management team, and as part of this exercise is
pleased to announce two key new in-country appointments. Wilhelm
Reitz joins as Mine & Plant Manager and Olivier de la Barre as
Country Manager. Both Wilhelm and Olivier are on site, and the role
of OVM has been significantly reduced.
Wilhelm Reitz: Mine & Plant Manager
Wilhelm Reitz has been responsible for mining and processing
operations on site for the past 8 months as an employee of One
Vision Management, the Company's engineering partner. Wilhelm has
recently agreed to transition into the role of Mine and Plant
Manager with StratMin where he will be responsible for mining,
processing and all technical requirements at the mine. Wilhelm will
continue to be supported by One Vision Management and will report
directly to the StratMin Managing Director.
Wilhelm is an experienced Mine Manager who has an extensive
track record of successful plant and mine operations. His skills
include management of expat and local workforce; plant design,
planning and construction; metallurgy, exploration programme
oversight through the planning and execution stages; mine safety
and environmental build out and both budget and inventory
controls.
Wilhelm has extensive Africa experience, working for Stellar
Diamonds Plc and African Mine Developments in Guinea, West African
Diamonds Plc in Sierra Leone and consultancy work in the Gabon and
Angola. We are delighted that Wilhelm has joined the StratMin
team.
Olivier de la Barre: Madagascar Country Manager
Olivier de la Barre joins the Company as the Country Manager and
will be responsible for overseeing all non-technical issues in
Madagascar including financial administration, procurement,
logistics, government relations and human resources management.
Olivier will be based between Antananarivo (Madagascan Capital) and
the mine and will report directly through to the Managing
Director.
Olivier brings a wealth of experience to StratMin having spent
the majority of the past 12 years working in Central Africa in
various administrative and country manager roles. Olivier has had
experience in mining project development, operations, financial
administration, licensing, government relations and regulatory
compliance. Olivier was most recently employed by Elemental
Minerals Ltd. (ASX: ELM) in the Democratic Republic of the Congo
(DRC) where he was employed as Country Manager for their
Sinttoukola Potash SA subsidiary.
Wilhelm and Olivier are supported in Madagascar by a full time
geologist, plant technicians, and administrative support.
The Company has identified, and intends to appoint in July, a
full time London based Managing Director with a Financial
Controller to follow in due course.
STRATEGY AND OUTLOOK
With the initial plant upgrades being completed and the
calibration process under way the Company expects to produce
between 900 - 1100 tonnes of +90% carbon content large and jumbo
flake graphite by the end of 2013 and, with additional capital
expenditure, to reach 10,000 - 12,000 tonnes in 2014.
The new operations management in London and Madagascar will
improve the execution and reporting processes of the Company and
will further assist the Company's transition into a steady state
producer of high quality graphite.
Production delays have been an unfortunate part of the Company's
expansion plans. However, the Board have addressed these problems
and as a result, expect production ramp up to progress steadily
from September 2013.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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