TIDMSTGR
RNS Number : 0917I
Stratmin Global Resources PLC
07 December 2015
7(th) December 2015
StratMin Global Resources Plc
("StratMin" or the "Company")
Operational Update
StratMin Global Resources Plc (AIM: STGR), London's only listed
graphite production and exploration company, is pleased to announce
the achievement of operational level breakeven and a comprehensive
update on progress achieved since appointment of its new CEO, Brett
Boynton, and entering into a strategic partnership with Tirupati
Carbons & Chemicals (P) Ltd ("Tirupati").
Plant Stabilisation, Operations and Optimisation
The process of upgrading the present plant to a consistent
6,000+ tonnes per annum ("TPA") production capability was initiated
in July 2015 with tangible progress achieved over the past 5 months
summarized in the table below.
Period Activity Results
------------- ------------------------------ -------------------------
July Process flow-sheet Increased production
2015 corrected and flotation rates achieved.
circuit modified to
match raw feed requirements
and enable higher throughput
------------- ------------------------------ -------------------------
August Comprehensive audit Establishment
2015 and analysis of Processing, of a continuous
Drying and Finishing improvement program
circuits made, with with a systematic
operational constraints implementation
identified and mitigation of upgrades and
planned in two parts: replacements.
(a) temporary refurbishment Drying plant fully
to enable continued refurbished, new
short term production dewatering spinners
optimised for net revenues; under installation,
and milling system
(b) permanent refurbishment under refurbishment
where possible, replacement and a new larger
of incorrect plant capacity diesel
and equipment and addition generator set
of new equipment as under procurement
required to convert to increase power
the present plant into supply and improve
a fully automated facility efficiency.
capable of delivering
>96% purity end product.
------------- ------------------------------ -------------------------
August Initiation of twenty-four Successful planning
- September hour production and and implementation
2015 review of all staffing of 24 hour production.
requirements. Stress testing
of the plant provided
further analysis
for the improvement
program. Demonstrated
competence across
all major activities
including operations,
maintenance, quality
control, sales,
shipping & logistics
and management.
------------- ------------------------------ -------------------------
October Continued twenty-four Continued production
-November hour production with and sales through
2015 planned maintenance major selective
and selective process refurbishment
shutdowns for refurbishment with cash flow
and replacements. Improved maintained. Expanded
grade control and mine inventory to ensure
scheduling. Further consistent operations.
production analysis Improved feed
and identification grade and efficiencies.
of process improvements.
------------- ------------------------------ -------------------------
-- Production output over the period increased despite selective
plant downtime and increased maintenance.
-- For the three month period from September to November 2015,
705 tonnes were produced and 603 tonnes dried, finished and
packaged ready for sale.
-- First stage refurbishments will be completed this month and
from January 2016, production of at least 400 tpm is expected with
sustained operational profitability.
-- Funds from Bass Metals Ltd. will be used for key equipment
upgrades in the mining fleet and milling circuits enabling
production to be increased to over 600 tpm from the second quarter
of 2016.
Lead times for importation of equipment into Madagascar have
limited the immediate completion of further refurbishments, but in
response we have developed enhanced fabrication capability on site
and this will serve the Company well in the development, subject to
additional funding, of a new 12,000 tpa plant in 2016.
Sales & Marketing Developments
Sales over the period have increased significantly and we expect
to see an improvement in average sales price as we smooth
production and increase average grades.
Sales during the September to November 2015 period totaled 478
tonnes, including quantities of unscreened and lower grade
concentrates produced during refurbishment and testing. Revenues
from these sales totaled GBP195,000.
Exploration
To optimise resource management and security, a low cost
exploration plan was developed and executed as announced on 23
November 2015. The programme has so far delivered:
-- Completion of detailed geological mapping utilising
geophysics, trenching and geochemical sampling and the
identification of significant additional mineralised zones.
-- Completion of total station topographical mapping of the area
with a contour interval of 2M at 1:1000 scale. This has provided
surface data for various activities including resource estimation,
identification of prospective reclaimable non-mineralised land
areas for community use and for development of proposed new
facilities and associated infrastructure.
-- A detailed JORC 2012 compliant resource report is in preparation for release in January.
-- Improved mining rates with enhanced grade control and resource utilisation.
Project & Business development
Alongside the ongoing optimisation of the present operations, we
have progressed detailed planning and engineering for the following
developments at the present operations:
-- On site engineering, fabrication and manufacturing facility
for independent capability in various types of equipment including
processing, materials handling, waste management and structural
steel. This will enable the on site team to fabricate conveyors and
storage systems, flotation cells, dust control equipment such as
cyclones, and structural components for sheds and equipment
covers.
-- Subject to additional funding, a new 12,000 tpa state of the
art, inline flake graphite processing facility with capability to
produce customised flake graphite concentrate for varying customer
requirements in purity up to 97%. This will increase the total
capacity at present operations to over 18,000 tpa flake graphite
concentrate production.
Establishing a full on site engineering capability enhances
maintenance and reduces dependence on consultants and imported
equipment. In addition, it will provide a significant portion of
the new plant build capability and longer-term expansion
capacity.
The Vatomaina Project under JV with our Strategic Partners has
been advanced. The initial capacity target for this project is a
similar 12,000 tpa flake graphite concentrate operation. Subject to
additional funding, on site work is scheduled to commence in the
first quarter of 2016, targeting initial production by the second
quarter of 2017.
In addition to the Loharano and Mahefedok project areas, the
Group holds a further Exploitation License covering an additional
6.25 square kilometers near Andranombolahy, approximately 30km
north of the existing mine. Neighboring operators are in production
and historic geological data and preliminary fieldwork indicate
that this area has potential to host higher purity flake graphite
deposits. Follow up exploration in the area will be initiated Q1
2016. The objective is to define a resource capable of supporting a
further 12,000 tpa operation.
Subject to availability of funding, the Group's portfolio has
potential to support a total production capacity in excess of
42,000 tpa from these diversified deposits within Madagascar. The
modular expansion approach enables staged CAPEX and significant
operational advantages. It is also attractive to buyers looking for
security of supply from multiple sources.
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