Rwanda - Tin, tantalum and tungsten-focused junior, Piran Resources, is looking to establish itself as a major mining company in Rwanda.
“Our deposits are rich, we will start producing significant volumes later this year, our licenced tenement areas hold significant upside discovery potential and the country is one of the best within the entire Africa continent,” says MD Ben Smit.
Established in 2013, Piran Resources is the tin (primarily) focused company established by parent company Pella Resources - Adonis Pouroulis’ African-focused natural resource and energy investment group with a strong track record in exploration and mine development across the continent.
Piran forms part of Pella Resources’ larger strategy – to find, fund and develop projects through subsidiary companies to a level which makes them amenable to stock exchange listings and/or attractive to external investment. To date the company has raised over US$2 billion for resource projects.
The right place at the right time
Whilst the price of tin over the last year fell below expectations, the long term fundamentals still look very strong. Prices were impacted by higher than expected production which created a slight surplus in the market but this is expected to fall over the next two years in Peru and Indonesia which will again create a deficit.
“Our focus since inception has been tin,” says Smit. “And our first port of call was Rwanda – we recognised its position as one of the next growth markets for tin, primarily because it no longer shares in the multiple challenges its African tin peer countries such as the eastern DRC are still contending with. Rwanda is undoubtedly one of the best destinations in Africa to start building a company,” Smit shares.
Rwanda is well endowed with tin, tungsten and tantalum as well as gold and may be small by comparison with its East African neighbouring countries – Tanzania and Kenya – but is outranking them in terms of regions to do business in.
It has also taken the decision to grow its mining and extractive sectors and intends to double the capacity and contribution of its extractive industry, to GDP, over the next few years.
“The country and its president Paul Kagame have and continue to achieve wonders since the end of the genocide in 1994. It has undergone 20 years of growth and has transformed into a model African country,” Smit outlines.
He continues: “Kagame has also established patriotism among his people who are friendly and easy to work with. I have not been exposed to corruption either. The country is a breath of fresh air.”
Establishing the second largest tin operation in Rwanda
Piran Resources believes it will deliver the second largest tin operation in Rwanda, after private firm TinCo’s Rutongo mining operations.
The company owns 90% of two contiguous, 4 000 ha, 25 year mining licences – Musha and Ntunga (Piran was the first company in Rwanda to be awarded a licence for this timeframe). They are located approximately 40 km from the capital, Kigali, and are easily accessible by good roads in low lying topography, close to well developed and maintained infrastructure.
The licence area was previously mined and has in excess of 3 Mt of tailings in place with sampling indicating a grade of 0.37% tin oxide (SnO₂) with recoveries of up to 90% with a tin content of up to 57%. They were historically exploited by Minetain (1953-1973) and then Somirwa (1973-1985) from open pit mines and subsequently underground tunnels. “Mining material was high grade but old processing technologies left significant material unprocessed.”
The strategy for the licences comprises two stages. The first phase includes constructing and commissioning a pilot processing plant capable of producing >20 tpm of tin. This was completed on 17 December 2014. Its primary purpose is testing material from various areas from the concession but will deliver some production as well.
“Further to this, we have purchased a larger 120 tph modular plant which will be commissioned in the third quarter of this year and take about 12 months to reach steady-state capacity. At this rate of processing, Piran will produce in excess of 150 tpm of tin concentrate at a minimum grade of 50% from tailings material for the first four or five years of operation. It will also enable us to proceed with exploration on our deposits,” Smit outlines.
Piran believes that, in addition to the current deposits, further unrealised value exists within the licence area and is systematically conducting on-going exploration to determine the size and scope of a larger resource and define a mining plan.
To date this has included a geophysical survey, which was completed earlier this year, and auger drilling across key areas of interest, specifically those previously mined in a large open pit in the west of the concession and underground and open-cut workings in the east.
The second phase of the project includes opencast mining and potential underground mining and development – accessing vein-like reefs from old adits but adopting modern mining techniques with which to build new adits as well. The plant will also be expanded to accommodate tungsten and tantalum processing requirements.
Piran already employs 150 people on site - all local with the exception of a few expatriates from South Africa and the Democratic Republic of Congo. Smit says this figure will increase to about 350 within the next few months.
For the full story on Piran Resources, look out for the May 2015 edition of Mining Review Africa.