Avenira
ASX-listed Avenira has submitted an application to convert its Baobab small mine permit in Senegal into a full exploitation permit/large mine permit.

The large mine permit (LMP), if granted, will provide Avenira with the right foundation for a production capacity expansion and will ensure extended project tenure.

The Avenira board has approved a new strategic plan developed by MD Louis Calvarin and his team.

The strategic plan includes two stages: first optimise the existing ore beneficiation unit to bring it to a fully sustainable operational level, and then implement next step investments towards the long-term objective of becoming a leading supplier to the fertiliser industry and a leading fertiliser producer for West African and international markets.

Stage 1 will deliver a capacity and performance expansion of the existing Baobab processing facility. A flotation line will be added to improve P2O5 recovery from around 50% currently to around 70%, and to reduce the silica assay of the Gadde Bissik phosphate rock concentrate product.

A drying process unit will also be added to control product moisture at the commercially required level, including during the annual wet season.

“Stage 1 is intended to increase current production to the 0.5 Mtpa level and to improve product quality, opening a wider segment of the market to our product,” explains Avenira CEO, Louis Calvarin.

Stage 2 will be the construction of a second production line delivering around 1 Mtpa of additional capacity. The resulting combined capacity of 1.5 Mtpa will provide sufficient product for Avenira to supply a dedicated phosphoric acid facility – this being the company’s long term strategic objective – while continuing to grow its relationships with its phosphate rock customers.

Engineering studies are under way to provide a detailed design as well as capital and operating cost estimates for stage 1. The expanded plant is expected to be fully commissioned in stages within 12 to 18 months of funding.

Pre-feasibility work for stage 2 is projected to start before the end of 2017.

Funding of the Avenira expansion

Both stages of the strategic plan detailed above will require additional funds to be raised. As a result, Avenira is undertaking three funding streams.

Avenira has entered into binding funding agreements with each of its two major shareholders, Agrifos Partners and Tablo Corporation, an affiliate of Groupe Mimran, whereby Agrifos will provide an unsecured bridge loan of US$1.44 million to Avenira and Mimran will provide an unsecured bridge loan of US$2.16 million to Avenira, each at a 6% interest rate and to be drawn down progressively.

Avenira will conduct a non-renounceable pro rata entitlement offer within the next five months to raise a minimum of A$7 million and a maximum of A$13 million.

Thirdly, the company will be seeking additional financing to fund the remainder of stage 1 not covered by the bridge loans or the entitlement offer, and all of stage 2 of the strategic plan.

“We are most appreciative of this gesture of confidence in the Avenira strategy from Groupe Mimran and Agrifos Partners,” states chairman, Dr Chris Pointon.

“It will allow management to proceed with work on Stage 1, and to properly prepare for discussions with other potential equity providers,” he adds.

Feature image credit: Avenira