Kameni, an emerging platinum group metals (PGM) and chrome exploration development and mining company focused on Southern Africa, is working towards having two new projects, respectively mining an annual 250,000 tonnes of PGMs and 100,000 tonnes of chrome ore in Zimbabwe by early 2011.
CEO Stephen Gorven explains that the two mines would be situated in the Bougai area of central Zimbabwe about half-way between Harare and Bulawayo. This area has good supporting road and rail infrastructure, as well as adequate power and water. It is just south of the Unki platinum project owned by Anglo Platinum. “We have secured prospecting rights and claims over approximately 3,500 hectares of land in the Selukwe complex of the Great Dyke, some 1,000 hectares covering PGMs, with the balance covering some very high quality chrome,” Gorven says. “The PGM deposits in our area of the Great Dyke exist at maximum depths of 150 metres, very shallow, which is obviously attractive. Good grades, some 5.0 g/t for the PGMs, and also very high quality chrome – we’re talking about around 45% Cr203, and a very attractive chrome to iron ratio of greater than 1.5:1.
“Management’s estimate at this point is for a resource of about 10 million ounces of PGMs on a 4E basis,” Gorven continues, “but we are busy with the drilling programme required to prove that up, ahead of a listing for Kameni next year.”
As far as an increase in this reserve is concerned, he confirms that the company had not made offers on any adjacent property. “However, clearly if such land became available, we would be interested.
“Our whole model is to bring projects into production as soon as possible. As an example, the Eland platinum project went from exploration into production in a matter of about 18 months, which is incredibly quick ………. and we are on a similar type of path here,” Gorven says.
“With the ore bodies being relatively shallow and accessible from surface, it is possible to achieve this. In fact, we may even establish an early revenue plant for the chrome because it is right there, waiting to be taken out – possibly by the end of this year.”
The PGM mine is due to be developed during the course of 2010 and as be in production soon as possible thereafter. “Having raised the capital we need for the exploration, the sooner we can get into production the better it will be for the shareholders, for the Zimbabwean government and people, and for us. We don’t have to sink any costly deep vertical shafts.”
Kameni now has six or seven rigs conducting its drilling programme in Zimbabwe. “We intend to complete the drilling over four to six months so that we can put that data into a resources model and have a competent person’s report to take to the JSE when we list next year. We are aiming at the first half of 2010 for our listing,” Gorven reveals.
“We did our seed capital raising at probably the worst time in the recent history of global markets for such initiatives, and we know that many people have tried and come back empty-handed,” he admits, “but we managed to raise the R300 million we needed to fund the exploration programme. We are delighted about that, and yes there was keen interest,” he says.
“I believe that people are still convinced there is a good medium and long-term place for the PGM market. I think that there are two mines, not just one, plus the possibility of future mines down the line, proved attractive to investors,” he adds.
“The Zimbabwean assets were of great interest to investors because it really is the next frontier in PGMs, and we have managed to get our foot in the door at a good time.”
He says that while there were one or two investors who simply said: “If you’re in Zimbabwe we can’t participate,” there were those who wanted only Zimbabwean exposure. “It was a surprise, but it’s true – there were some.
“The vast majority understood, and once we talked through the risks with them, and the particular circumstances one faces in Zimbabwe, they were quite happy,” Gorven says.
“We know things are not perfect, and there’s a lot of settling down to be done. But everyone seemed to understand that entering that environment at this stage, anticipating a growing settlement, is a particularly good thing,” he observes.
“As far as the environment there is concerned, we have been made very welcome. Clearly there is a realisation that mining is one of the ways of kick-starting the economy. Mining and processing employs large numbers of people, and is also a good source of hard currency revenue for the country. There are many reasons for Zimbabwe to support an enterprise like this.”
The Kameni board has actually decided to extend its seed capital offer indefinitely, and the reason for that is that there are a number of investors that remain interested in making substantial investments in the company.
“After the closing there was one additional investor who has come in for a substantial investment, and we are busy closing that currently, while there are others with whom we are still in dialogue,” Gorven reveals. “We are in the process of closing a US$10 million investment, and are in discussion with others for further sizeable investments; so we could actually end up achieving our R1 billion target, or beyond that,” he suggests.
“Obviously, if we can raise further capital beyond our requirements for the exploration, we can accelerate our path to production by putting down deposits for some of the long-lead items of capital equipment, and we are very keen to do that.”
Calculations for the capital required for the Kameni projects are now a lot lower than the R5 billion estimated last year. “It’s really too early to put an accurate figure down at this stage, but it will be more in the region of R3 to R3.5 billion in our current estimation,” Gorven says. This involves the company’s Kalkfontein project in South Africa, as well as the Bougai initiatives in Zimbabwe.”
Looking at the Bougai PGM project, Kameni will not be doing a feasibility study as a separate operation. “We’ll do that interactively as we progress with gathering other information. We intend to put together all the information we need for a feasibility study during this year, and we are working very hard towards that objective,” Gorven says.
“We have said that we’ll be mining 250,000 tonnes a month, which would translate to production of approximately 400,000 ounces of PGMs a year. Life of mine will be 15 to 20 years based on current reserves.
“As far as the chrome mine is concerned, we are planning to set up an early revenue plant before the end of this year to make an early start in terms of earnings. We will be doing this in the next few months,” Gorven says.
“It makes sense to start full scale mining next year – the chrome is on the ground, and the grades are good. We have no official figures for the resources at this stage, but I must emphasise that we believe there’s lots of it.”
Gorven says, “We will be aiming at mining 100,000 tonnes a month of chrome ore, which we can export as it is, with various stages of processing, starting with metallurgical grade chrome and then working towards producing a range of products. We will evaluate the different chrome products we could look at producing as we go along,” he explains.
“We do believe that there’s going to be an excellent future for the PGM and chrome industries in Zimbabwe,” Gorven concludes.