2 Nov 2011 07:00
BERKELEY MINERAL RESOURCES PLC
("BMR" or "The Company")
TENDER PROCESS FOR SALES CONTRACTS TO BUY WASHPLANT TAILINGS COMMENCED
Berkeley Mineral Resources Plc, which is primarily engaged in processing mining tailings, announces that further to the Company's announcement of 28 March 2011 containing the JORC Resource Statement for the Washplant Stockpiles at Kabwe, and subsequent mineralogical and metallurgical testing of the tailings by Mintek, the Directors have reviewed the options for maximising the value of these stockpiles to shareholders. After careful evaluation, and having sought third party advice, the Board has decided to sell the washplant tailings without further processing.
The Mineral Corporation produced a JORC-compliant mineral resources estimate for the wash plant tailings which was announced on 28 March 2011. The washplant slimes dumps include residue historically produced at Kabwe prior to its closure through the washing of concentrates. Because of the high combined grade of lead and zinc at 17.83%, this section of tailings is believed to be readily saleable without further processing. Subsequent testing has revealed additional minor traces of copper, vanadium, iron and manganese. Following consultation with mining advisory firms, the Board have concluded that the value of the JORC-compliant dry tonnage of 503,189 would be maximised by the sale of the material without further processing.
The Directors have considered the investment required to process these tailings and concluded a dedicated washplant flotation plant to produce concentrates would not be the best use of capital at this stage of the Company's development. Additionally, the Directors believe there is an environmental need to remove the potentially polluting material from site as soon as possible.
Having taken the decision to sell the washplant stockpiles without further processing on-site, the Board has commenced discussions with interested parties to enter into sales contracts to buy the washplant tailings. They have been invited to submit a tender for the material. The Directors believe that the Kabwe site is ideally located for rail transport through Indian Ocean ports to smelters in Far Eastern markets and the washplant sections of the stockpiles are adjacent to the Kabwe railway sidings.
Simplified Leachplant Pre-Feasibility Study
As a result of the decision to sell the washplant tailings without further processing the Leachplant Pre-Feasibility Study, currently being undertaken by Metanza, will focus on the main Leachplant and Slag stockpiles. The Leachplant Study will include design criteria, major equipment listing, and capital and operating cost estimates for the recommended processing routes. Further drilling of the Slag stockpiles will be undertaken to complete the resource information for the Study.
Mintek are currently completing mineralogy and metallurgical testing of composite samples of these stockpiles concurrently with Metanza's work.
Masoud Alikhani, Chairman, commented:
"I am pleased we have now been able to make this decision, based on commercial criteria. The near-term sale of the washplant tailings will bring us substantial regular cash-flow and help speed the Pre-Feasibility Study work. Once this is complete we will then be in a position to start processing the main leachplant stockpiles as soon as possible."
"We are proceeding with maximising the potential of Kabwe while at the same time reviewing several other tailings deposits within Zambia."
02nd November 2011
This release has been reviewed by Dennis Human, B.Sc. (Hons), Bus. Admin (Hons), Consulting Geologist in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies.
Contacts:
Masoud Alikhani, Chairman, Berkeley Mineral Resources 020 7408 1181
Stewart Dickson (Corporate Finance), Seymour Pierce 020 7107 8000
Jeremy Stephenson (Corporate Broking)
Michael Padley / Gary Middleton, Lothbury Financial Services 020 7868 2010
Notes for Editors
BMR is a minerals company with a primary strategy of investing in tailings processing. By accessing above-ground 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. From 1906, Kabwe was a significant mine. 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. BMR's overall strategy is to re-assemble the Kabwe dumps site into a single entity operating under a single Large Scale Mining Licence.
BMR has also signed a MOU with Ng'wena Mining Resources under which it could acquire 76% of the copper tailings from the former Roan Antelope mine at Luanshya, 145 km north of Kabwe.
For further information please see the Company's website at http://www.bmrplc.com