DRC – These projects include the Kipushi cobalt tailings project, the Kasombo copper-cobalt projects (together projects) as well as operate the Kipushi processing plant, located near Kipushi.
Over the past month, the company and its technical management have completed a number of site visits to the projects and appointed key technical and legal advisors to progress its legal and technical due diligence, to meet with key stakeholders in the DRC and to prepare itself for the proposed development and commencement of production activities.
As part of this, Cape Lambert Resources has also met and held discussions with five major global commodity trading houses, all of whom have expressed an interest to enter into life-of-mine cobalt and copper concentrate off-take agreement in respect to the Kipushi cobalt tailings project.
In addition, non-binding offers of off-take debt funding and pre-payment finance have also been received for amounts of up to a maximum US$10 million. These are proposed to be made available for funding 100% of the anticipated capital and working capital requirements of the projects and also fund the acquisition of additional advanced cobalt projects in the DRC.
Management have also held several detailed meetings in Lubumbashi, in London and in Johannesburg to progress this. Further meetings are planned to continue in April in Hong Kong and Johannesburg, with a view of finalising an off-take agreement and associated debt funding package over the coming months.
Whilst these meetings are preliminary in nature, and there is no assurance that a final binding life-of-mine cobalt and copper concentrate offtake agreement, or associated off-take debt funding and pre-payment finance agreement will be reached, the very high level of interest and significant offers received to date is considered by management to demonstrate the significant opportunity and value of the Kipushi cobalt tailings project.
The company’s technical consultants collected 32 kg of additional samples from various locations within the Kipushi cobalt tailings project during their last site visit. This material has been despatched to the laboratory of Mintek in South Africa for characterisation and metallurgical testwork.
The results of this testwork and the concentrate characteristics and composition is critical to finalisation of the Cape Lambert Resources’ proposed cobalt and copper concentrate off-take agreement and off-take debt funding and pre-payment finance, and has been requested by the major global commodity trading houses that the Company is in discussions with.
This testwork, which is currently underway in South Africa, is aimed at verifying previous work completed and aimed at producing both a bulk concentrate grading initially 10-12% copper and greater than 2% cobalt and three separate concentrates of copper, cobalt and zinc.
A further objective of this testwork is to conduct gravity work to determine the potential for pre-concentration of a mill product and on tailings from rougher flotation. It is expected that the testwork will be completed in April 2017.
The company is also pleased to report that assay results from the four tailings samples collected during the recent site visit completed in February 2017 supports the grades determined by the handheld XRF readings. The company’s technical consultants collected samples of the Kipushi tailings from various locations and at various depths and indicative grades of the tailings were determined using a handheld XRF and ranged between 0.40% to 0.75% cobalt and 0.50% to 0.86% copper.
Cape Lambert Executive Chairman, Mr Tony Sage, said: “It’s great to see the assay results support what our team observed in the field. The metallurgical testwork now being conducted will also provide confidence in the product that can be produced and assist us greatly in finalizing a cobalt and copper concentrate offtake agreement and associated off-take debt funding and pre-payment finance.”
“The level of interest from some of the world’s largest global commodity trading companies in entering into a life-of-mine cobalt and copper concentrate offtake agreement in respect to the Kipushi project, is very encouraging and clearly demonstrates the significance of this project and the strong market fundamentals for cobalt, where prices have risen to now exceed US$50 000/t.”