LONDON (Alliance News) - BMR Mining PLC on Thursday said it will launch an open offer of shares in early 2016 that will have similar terms to the placing carried out in October, after reporting a significantly narrower loss in its last financial year.
The Zambia-focused miner, which does not currently generate any revenue, reported a pretax loss of GBP1.6 million in the year ended June 30, significantly narrower than the GBP9.3 million loss reported a year earlier, due lower administrative costs, impairments and share-based payments.
The company's sole asset is the Kabwe lead and zinc project in Zambia, where it is working on the design of the pilot plant to treat tailings it acquired from former producing mines in the country. Earlier this year, it made a U-turn and decided to build its own plant rather than its original plan to lease land and equipment from a subsidiary of Glencore PLC.
Tailings, also known as dumps, are crushed rocks that have had the most valuable part of the ore already removed.
BMR is aiming to build a 24/7 operational plant that can process at least 5.0 tonnes of ore per hour to generate near term revenue to fund a further expansion of the plant sometime in 2017.
In order to fund its plans at Kabwe, BMR said it will launch an open offer in early 2016 which will have the same headline terms as its placing back in October, when it raised GBP750,000 through 18.75 million shares priced at 4.0 pence each. BMR shares were down 3.0% to 4.0p per share late Thursday morning.
Once the design parameters for the plant have been finalised, BMR will be able to release cost, production and revenue forecasts for the plant. BMR also will submit its environmental and social impact assessment for the project "in the near future".
BMR plans to treat different types of slag at Kabwe. In 2014, the company was advised that recovering zinc from imperial smelting furnace slag would be difficult, forcing the company to write off the value of the asset.
Slag is the residue left over after the smelting process has been completed.
However, on Thursday BMR said it has re-examined the resource and has managed to achieve a zinc recovery rate of over 77% from that slag. It will now conduct further work to establish if the slag can be processed by the proposed pilot plant at Kabwe, which if successful, will lead the company to compile a resource estimate for the slag.
"I believe we have made considerable advances at BMR and that our positioning as a tailings processor represents a low-risk business, requiring less capital, outside of the challenges faced by mining companies in general. We will seek to expand the business further where opportunities arise for the acquisition of other tailings which we can process efficiently," said Chairman Alex Borrelli.
The Kabwe asset also holds 1.1 million tonnes of waelz kiln slag, but the company was once again advised in 2014 that the resource would be uneconomical on a commercial basis and hard to process.
BMR has re-evaluated the slag, and has found a way to use it for the construction of building blocks and roads. The company has now produced sample building blocks using the slag and submitted an application to authorities that would allow it to sell the slag for those uses.
If approved, BMR will start selling that slag locally, and said it could begin larger-scale sales for a "limited cost" to deliver "modest but meaningful revenues over several years."
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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