Bushveld Minerals, listed on AIM, has announced the signing of a Memorandum of Understanding (MoU) between its wholly owned subsidiary, Greenhills Resources, and VBKom for the joint development of the Mokopane tin project in Limpopo Province.
The Mokopane project is a brownfields tin project containing 18 447 tonnes of tin with an average grade of 0,12 % tin (Sn) on two adjacent deposits. It is situated on the Northern Limb of the Bushveld Complex and consists of one prospecting right (2205 PR), covering six farms with an area of approximately 13 422 ha.
VBKom is a South African specialist consulting company operating primarily in the mining industry. The company was established in 2008 and has extensive experience and specialist knowledge in mining engineering, geology, mineral processing, industrial engineering and project management.
Greenhills Resources, Bushveld's tin platform, was established to develop a pan-African portfolio of tin assets with a near term production profile.
Under the terms of the MoU, VBKom commits to conduct due diligence on the Mokopane tin project, following which, assuming a successful outcome, VBKom intends to enter binding agreements to provide capital investment and technical support for the development of the Groenfontein and Zaaiplaats deposits to mine commissioning in return for equity participation in the project, not exceeding 50 %. The MoU provides for VBKom to conduct due diligence on the Mokopane tin project for a period to 31 January 2017.
The joint development effort is expected to build on the 2014 Mokopane Scoping Study based on Groenfontein and Zaaiplaaats. The study envisaged an initial 691 000 tons per annum Run-of-Mine operation to produce 700 tons per annum of 99,5 % Sn purity metal. The positive results of the study included a pre-tax IRR of 34,6 %, an all-in cash cost of US$14 276/ton Sn and a US$16 million capex, using a long-term tin price of US$22 928/ton (current: US$21 610/ton).
Fortune Mojapelo, CEO of Bushveld Minerals, commented, “We have articulated a strategy for Greenhills Resources to consolidate a critical mass of mineable, low-cost tin resources with a near term production profile in order to build Greenhills' capacity as a stand-alone tin company. The signed MoU, which introduces a credible potential technical and financial partner for the Mokopane tin project, is a welcome step towards achieving that goal. We look forward to developing a long lasting relationship with VBKom, subject to the results of the on-going due diligence.”