Republic of Congo – Elemental Minerals, the advanced stage mineral exploration and development company, has completed a A$4.98 million private placement, at $0.20 per share from existing shareholders to fund feasibility studies of its potash development projects in the Republic of Congo, the company announced last week.
Elemental Minerals, whose primary asset is the 97%-owned Sintoukola potash permit in the Republic of Congo, has made significant advances in the development of its potash projects, with final preparations underway for the initiation of the Kola bankable feasibility study (BFS) and the Dougou prefeasibility study (PFS).
Building on the excellent results of the Kola deposit phased implementation study and the Dougou scoping study, Elemental plans to kick-off both the Kola BFS and Dougou PFS in August 2015.
It is anticipated that these studies will further demonstrate the ability of these projects to deliver lowest quartile operating costs and attractive investment returns, reflecting their shallow depth, high quality and favorable location on the Republic of Congo coast and in close proximity to the project’s natural market of Brazil, the company said in a statement.
While Kola remains Elemental’s lead project, Dougou is less advanced but very compelling given its relatively low start-up capital requirement.
Elemental believes that by advancing both projects it creates strategic optionality and an emerging potash ‘province’ which includes the Kola, Dougou and Yangala projects all located within 20 km of each other and with only 25% of the property explored to date.
The company has completed its initial BFS/PFS consultancy selection process for both the Kola and Dougou projects respectively and is developing detailed proposals with the shortlisted companies.
Both studies will incorporate further build-own-operate-maintain infrastructure partners, thereby reducing the project startup capital.
The company has received expressions of interest in this regard for the power supply, gas supply, marine facilities and trans-shipment, the overland conveyor belt, underground mining and the employee facilities.
These will be further developed to commercial terms during the Kola BFS in conjunction with the selected EPCM company.
The Kola BFS is planned for completion in the third quarter of 2016, with the start of construction foreseen in the second quarter of 2017.
The Dougou PFS and environmental and social impact assessment are both scheduled to be completed in the second quarter of 2016.
Meanwhile, Elemental is also in negotiations with globally significant companies, with interests in the fertilizer sector, pertaining to a sizable investment into Elemental in the near term, and ultimate off-take of muriate of potash (MoP) once the project or projects are in production.
It is anticipated that these negotiations will be successfully concluded by no later than the last quarter of 2015.
“We are extremely pleased with the continued support expressed by shareholders through this successful private placement, which reflects their recognition of the exceptional quality of the projects. Our discussions with companies capable of major funding and MoP off-take are advancing, supported by the successful reduction of the initial capital requirement for the shallow and high grade Kola sylvinite deposit, the company’s flagship asset,” says Elemental Minerals CEO John Sanders.
“There is increasing recognition of the high quality of our potash projects and the opportunity they present to achieve the lowest global potash production operating cost and it is looking increasingly likely that a ‘strategic’ investment and off-take agreement will be secured in the near future. This would provide a “runway” to production and the build-finance thereof.”