Kanyika scoping study

Charlotte Dudley
MiningNews.Net

A RECENTLY completed scoping study at Globe Metals’ Kanyika project in Malawi has indicated potential for a 20-year life of mine. The study, conducted by Coffey Mining, assessed operational scenarios and identified niobium as the primary commodity with the low strip ratio lending the project to openpit mining.

Niobium is a steel additive that can be used in the steel making and highend technology industries in the form of super-alloys, high-strength lowalloy steels and super conductors.

Kanyika’s 56 million tonne inferred JORC-compliant resource is also prospective for uranium, tantalum and zircon. Total capital expenditure for a production rate of 4000 tonnes niobium per annum was put at $US177 million. A slightly lower 3000t output estimated expenditure at $156 million.

A study of processing potential concluded end-product niobium and lesser amounts of tantalum could be sold to the steel market and to producers of high-purity niobium and tantalum oxides.

The scoping study does not include any potential revenues from uranium oxide production.

But the biggest variable in the project scoping study was the niobium price (hovering around the $US13 a pound mark), which Globe said would impact on project cash flows and valuation. The explorer said its study used “conservative” metals pricing of $US10 a pound, “because of the marked increased in prices and demand over the last three to five years”.

“Should prices remain at or near current spot price levels for an extended period of time, the potential improvement to the modelled cash flows and valuations would be significant,” Globe said.

Results of the study factor in a 30% variance for mining costs and a 50% variance for all other items. Globe shares lost 5c or 11.1% to trade at 40c this morning.