Toronto, Canada — MININGREVIEW.COM — 27 March, 2008 – MagMinerals – a wholly-owned subsidiary of Toronto Venture Exchange-listed MagIndustries Corporation – has been granted a 25 year mining license for its Kouilou potash mine in the Republic of Congo (ROC). The ROC Government will retain a 10% free carried interest in the project.
A news release issued here late yesterday says the company intends to build, own, and operate a stand-alone 1.2 Mtpa potash mine and plant 16 km east of the Atlantic port city of Pointe-Noire. The ROC is bordered to the south-east by the much larger and distinctly separate Democratic Republic of Congo (DRC).
MagMinerals recently announced the results of a final feasibility for Phase I of the Kouilou potash project which was completed by SNC-International Inc. The capital cost for Phase I has been estimated at US$723 million R5.8 billion), excluding financing costs, for a 600 000 tpa facility to produce granular K60 grade potash.
“BNP Paribas – advisors to MagMinerals – have approached a group of international lenders who are working to complete their due diligence toward the debt financing of 70% of the project costs to bring the Kouilou potash project into production,” the news release revealed. “MagMinerals is anticipating closing its previously announced equity offering for US$80 million (R650 million) to US$100 million R800 million) on April 3, 2008 as a first step toward providing the required 30% equity for Phase I,” it added.
MagMinerals also recently announced the findings of a technical report identifying proven and probable reserves available to support the Kouilou Potash Mine. The proven reserves amount to 17.9 Mt of KCl (potassium chloride), while probable reserves total 3.1 Mt. At a production rate of 600 000 tpa, this indicates a mine life of about 34 years.
Inferred resources identified to date total 185.9 Mt of KCl. “The proven and probable reserves are open in all directions, and additional drilling may increase the reserve base available for future plant expansions,” said the report.”
“The Kouilou plant is based on a modular design, and MagMinerals intends doubling the first phase capacity as soon as possible to reach total production of 1.2 Mtpa,” the company release revealed. “The capital cost required to double the capacity of the plant is expected to be significantly lower than the first phase, as it will benefit from the extensive infrastructure put in place by building Phase I,” it concluded.