1 Oct 2009 07:00
Berkeley Minerals Resources plc
("BMR" or the "Company")
Kabwe Dumps acquisition update
AIM-listed Berkeley Minerals Resources plc, the company developing mining projects in Zambia, announces that it is in the final stage of securing the rights to substantial additional surface dumps located at the Kabwe mine in Zambia. The dumps comprise large accumulations of metal-containing waste products derived from past mining and processing of the mine's zinc-lead ores. An aerial photograph showing the locations of the dumps appears on the Company's newly updated website at http://www.bmrplc.com.
The Company has already been granted the rights to Dump 57 by Zincorous Investment Ltd, a South African-owned, Zambia-based company. This contains an estimated 1.24m tons of Waeltz Kiln slag grading 5.49% combined Zn-Pb, equivalent to around 52,100t Zn and 16,100t Pb, worth approximately US$100m at current metal prices.
The rights which BMR is in the final stages of finalising are to two other dumps (Dumps 21 & 22) which contain approximately 588,000t of Imperial Smelting Furnace (ISF) slag grading 9.65% zinc-lead, equivalent to around 46,040t of zinc and 10,701t lead and with a similar value to that of Dump 57, giving a total metal value in excess of $US200m.
According to the Company's latest projections, after refurbishment of the on-site gravitational and flotation plant, its Kabwe project should become cash-positive after six months, based on selling concentrates grading 55% combined zinc-lead. There is a ready market for this product in South Africa and in Asian markets.
The Zambian government's Copperbelt Environment Project (CEP), supported by the World Bank and Nordic Development Fund, is in operation at Kabwe and is responsible for all past environmental problems arising from over 80 years of mining. In accordance with the CEP, after recovering the contained metals, BMR will be relocating the residues arising from its operations to another environmentally safe site.
Masoud Alikhani, Chairman, Berkeley Mineral Resources plc, commented:
"The estimated value of metals in these dump materials indicates the potential of this project to become a meaningful cash generator and profit source for the Company. At the same time, we are helping to clean up the local environment and providing employment in an economically deprived region.
"We are presently involved in discussions to give us access to the nearby Kabwe base metals processing plant to treat the dumped material on a toll basis. This would enable BMR to produce a concentrate for its own account as opposed to the previous arrangement under which dumped material was shipped out of Zambia for processing by third parties. It would also allow us to offer toll treatment facilities to other parties which would further enhance the profitability of the project."
Notes to editors
BMR is a minerals company with a primary strategy of investing in tailings processing. By accessing dump deposits with known grades and metallurgy, it avoids exploration or mining costs, has a secure licence and fixed environmental criteria, and can produce concentrates according to viability at current market prices.
The Kabwe deposits, located approximately 110km north of the Zambian capital Lusaka, were discovered in 1902. The series of high-grade replacement ore bodies were characterised by coarse sulphide mineralisation (sphalerite/galena) surrounded by an oxidation halo comprising a variety of secondary zinc-lead minerals.
From 1906, Kabwe became one of the world's most important mines. By the time it closed in 1994 due to depletion of the massive sulphide mineralisation and lowered metal prices, it had produced about 1.8m tonnes of zinc, 800,000t of lead, 7,800t of vanadium pentoxide and lesser quantities of cadmium, silver and copper. After closure, most of the mine complex was sold off on a piecemeal basis. Berkeley's project is part of an overall plan to re-assemble the Kabwe site into a single entity operating under a single Large Scale Mining Licence.
Today, the waste dumps at Kabwe cover an area of about 1km2 and contain approximately 8m tonnes of various waste residues with an estimated combined metal content of 455,000t zinc and 368,500t lead.
BMR benefits from the existing infrastructure at Kabwe, including processing plant, good roads, water supply, ample power, local labour and direct on-site connection to overseas markets via international railways to South Africa and to Indian Ocean ports.
For further information please see the Company's website at http://www.bmrplc.com
The directors of Berkeley Mineral Resources accept responsibility for this announcement.
1 October 2009
Contacts:
Masoud Alikhani, Chairman 020 7408 1181
Jonathan Wright, Seymour Pierce 020 7107 8050
Michael Padley / Ron Marshman, Lothbury Financial 020 7011 9411