Simberi Mining Corporation, unlike many junior exploration and development companies, does not take a particular geographical focus. It looks for projects that have the potential for near term production and the Kakanda tailings and bedrock deposits in the Democratic Republic of the Congo fits this bill.
The company’s chief financial officer and vice president James Hershaw says that Simberi is not an early stage exploration group, but rather a company that looks at early to mid-stage properties with a high potential for near term production.
“We like to see ourselves as an international resource development company, and we have the expertise to add value through securitising the value in the individual projects at the optimal point in the development cycle,” Hershaw says.
Simberi also has properties in Australia, but these are earlier stage exploration plays and the company’s top priority is its Kakanda project. Simberi owns the development rights to the Kakanda project through the 100% wholly owned subsidiary PTM Minerals.
Kakanda has held a relatively low profile, compared with other more prominent projects in the DRC. That probably has worked to Simberi’s advantage as it has avoided some of the entanglements that large high profile projects draw, in a country still in the early stages of evolving its way forward.
Due to the global financial meltdown sourcing funding to progress the project won’t be as cheap as it once was but Hershaw says Simberi will continue to develop Kakanda and is busy finalising a feasibility study. “In this market funds are less accessible for groups without production, however we are examining several options and we will look for arrangements that minimise equity dilution.”
Simberi’s Kakanda property, located in Katanga province, some 70 kilometres northwest of the major regional centre of Likasi, and some 120 km from Lubumbashi is very low risk geologically.
There are a number of other projects in the region that are similar in character to the Kakanda bedrock and tailings deposits, and two in particular may have a significant impact on the potential operations at Kakanda. These are the Tenke-Fungurume project located only seven kilometres distant, and the immediate neighbour of Kakanda, the Kababankola Mining Company which operates the Kakanda concentrator and a number of deposits in the area under lease from Gecamines. Gecamines also holds 49% of the Kakanda project to PTM Minerals’ 51% and Simberi is negotiating to increase PTM’s share consistent with other recent contract commitments.
In the past the Kakanda North, South and East deposits were exploited by open pits, Kakanda East being worked from two separate pits. Mining at the Kakanda South pit ceased in 1984, and the Kakanda North pit closed in 1989.
In 1995 International Panorama Resource Corporation through its wholly owned subsidiary PTM Minerals, commenced a feasibility program to evaluate the Kakanda tailings. To improve overall project economics, Gecamines offered PTM Minerals the exploration licenses to the North and South pits at Kakanda in addition to the right to develop the Kakanda tailings.
International Panorama completed a pre-feasibility study on Kakanda in May 1997 followed by a feasibility study completed in October that year. Both studies were managed by Bateman and these found the project to be feasible. However, they were shelved when the DRC fell into civil strife in late 1998.
Simberi, which saw the DRC as having become much more stable, with conflict of the scale seen in 1998 unlikely to reoccur, purchased 100% of PTM Minerals in 2005. PTM Minerals directors include William Potter and John Tyson, both Harvard MBAs with strong political connections to the highest levels of the US Government. Another PTM director is Gilbert Mundela, a resident in the DRC who has formerly worked as a consultant with the World Bank in Washington.
Kakanda did undergo the same mining rights review as all mining groups in the DRC and it affirmed PTM Minerals’ right to develop Kakanda. Hershaw notes that an August 30, 2008 memo sent to Gecamines from the DRC Ministry of Mines, directing it to complete joint venture negotiations with a list of 28 companies showed PTM Minerals at the top of that list. “It certainly helped to clear the way,” Hershaw says. “We are busy with negotiations on the joint venture, but there is a lot of competition for the attention of the key stakeholders.” PTM has invested over US$15 million in the evaluation of the properties resulting in a NI 43-101 compliant technical report in 2006.
The Kakanda tailings comprise 18.4 million tonnes with 1.22% of contained copper per tonne and 0.15% contained cobalt per tonne. Overall the tailings concession covers 6.48 km2 and the Kakanda North and South pits comprise 5.67 km2.
“At this point all options are still on the table. The economics of the project are attractive and we are now working on taking the project to the next stage. Right now the biggest task is finalising project terms and securing a construction partner to take the project to the next stage,” Hershaw says. The envisaged timeline is to commence construction in 2009 with first production to follow shortly thereafter.
Hershaw believes that a timeline of a year to finalise the agreement with joint venture partners and finalise finance terms is attainable.