South Africa – Coal has lost its flavour. It cannot be denied when coal-focused companies change strategic direction and invest their cash in different commodities. ASX-listed Lemur Resources has done that, having entered into a binding agreement to acquire a tin property in South Africa.
Until recently, the company has been focused on developing coal projects in Madagascar but has shifted its focus to tin. Investors could see this as a smart move considering tin is expected to move into a major deficit over the next 5 – 10 years, driving prices up.
Its binding agreement entails acquiring a 99.1% of Zaaiplaats Mining Proprietary, a company incorporated in South Africa and the registered owner of two properties, namely the Remaining Extent of Portion 25 of the farm Gronfontein 227 KR and Portion 5 of the farm Roodepoort 222 KR, both located in the Limpopo Province.
The deal is valued at R2.5 million.
“This is in line with our strategy to seek potential mineral and asset acquisition opportunities in Africa generally, with a focus on near term production potential or Greenfield exploration projects with potential for significant resource definition” Anthony Viljoen
The Zaaiplaats project is located in an old tin mining district that was previously the site of the second biggest tin mining operation in South Africa. Existing tailings dams on the property have an intrinsic value and potentially contain recoverable grades of tin.
The deal sees Lemur Resources acquire all rights, interest and title in an existing mining right application which has been lodged with the South African Department of Mineral Resources for the mining right in respect of the tailings dam.
Lemur intends to carry out a more detailed evaluation of the tailings dams. Previous reports have indicated that there may be potential to re-mine the Zaaiplaats tailings, as significant extractable tin remained in the tailings.
Additionally, there is potential to sell sand and other aggregates from non-tin bearing zones on the Zaaiplaats property, with various options currently being considered, providing a low cost entry point into production and a potential source of immediate revenue for the company.
Extraction of the sand and aggregate product does not currently need a mining right and ongoing studies will reveal the extent of future production and licensing requirements.
“We are delighted at this strategic acquisition of the Zaaiplaats asset as this unlocks short term value for the company through the potential for early modest cash flows in a highly prospective area. This is in line with our strategy to seek potential mineral and asset acquisition opportunities in Africa generally, with a focus on near term production potential or Greenfield exploration projects with potential for significant resource definition,” says Anthony Viljoen, Lemur’s MD.
Zaaiplaats project overview
Over 100 000 t of tin have been produced from hard-rock mining at the Zaaiplaats deposit between 1906 and 1989, with a simple processing methodology of stamp-milling of the ore, followed by gravity separation using shaking tables and spirals. Processed tailings were dumped in a valley adjacent to the mine and, owing to the crude processing methodology utilised, the potential exists for a tin resource to remain in the tailings dump.