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Nayega Manganese – Northern Togo Update
Ferrex PLC, an AIM quoted manganese development and iron-ore exploration-company focused in Africa, has announced the completion of the modelling for Phase 1 of the Definitive Feasibility Study (DFS) at its Nayega manganese project in Togo, subject to confirmation of the final fiscal terms of the Togo Mining Convention. Ferrex’s Phase 1 objective is to export 250,000 tonnes per annum of manganese ore, generating early cashflow, followed by developing low-cost high value ferromanganese production facility. The Company’s target is now to finalise the Mining Convention before end Q1, 2015, with the granting of the Mining Permit expected shortly thereafter.
Nayega DFS Model Highlights
· Strong Economics Phase 1
o Low capex of US$14.5 million, opex for years 1 to 4 of USD1.93/dmtu FOB
o Lome Lower capital and operating costs than forecast in Scoping Study
· Low Cost ‘Starter’ Option
o Additional studies initiated to assess viability of accelerated ‘starter’ operation using a simplified
scrubbing and screening processing plant
o High grade assay results of 41.6% and 42.1% Mn from a 3 tonne bulk sample collected by
scrubbing and screening for blast furnace testwork support near-term ‘starter option’
o Production could commence within six months of the mining permit being granted at a potentially
significant lower initial capital cost
· Exploration upside
o The current resource of 11.0Mt @ 13.1% Mn expected to be increased
o Pitting, aimed at defining a maiden resources for targets T27 and T48 is complete (exploration targets are in excess of 1mt at 8 – 12 % Mn and 100kt to 200kt of 15-20% Mn respectively).
o Assay results expected February 2015
· Financing
o In advanced discussions with four parties to secure financing for the development of Nayega,
including proposals for funding of the accelerated starter option
Ferrex Managing Director Mr. Dave Reeves said, “I am delighted to report that the Nayega DFS components are complete with modelling demonstrating favourable economics with lower capex and opex costs than originally forecast for Phase 1 as we develop a 250,000 tonne per annum high grade manganese product mining operation. Furthermore, I believe we can target more cost reductions, as recent significant exchange rate moves and falling oil prices are not reflected in these numbers. In terms of financing Nayega through to near-term production, on-going discussions with a number of parties to finance development serve to reinforce our positive views about the potential of Nayega; indicative term sheets are being reviewed to determine which offer will be best for shareholders.
“In addition, high-grade assay results from recent bulk sampling are extremely encouraging where manganese levels of over 42% markedly exceeded our previous 38% manganese product expectations. This in tandem with the financing constraint currently being experienced by junior mining companies has prompted us to investigate an accelerated ‘starter’ operation at a significantly reduced capex, which could see production and early cashflow commence within six months of the mining permit being awarded.
“All of these developments are extremely encouraging for Nayega. I look forward to reporting further positive news once we receive assay results for the pits dug and sampled at targets T27 and T48 and the updated resource is compiled. Expanding the current resource base of 11.0Mt @ 13.1% Mn will further improve the project’s economics and make it an even more compelling investment.”
