Two years to greenfield niobium resource

Barry Avery
Paydirt

Staked as a grassroots EPL in Malawi two years ago, Globe Uranium Ltd is justifiably proud of the distance its Kanyika niobium-uranium-tantalum-zircon deposit has come since then.

It was in March 2006 that Globe pegged the ground in central Malawi and has spent $3 million proving up the maiden resource, which was announced in the same month this year.

“It is a large resource, and one of the largest of any reported in Malawi. It is both significant for us and the country. What’s really important is that 25% of the resource is at surface,” managing director Mark Sumich told Paydirt. None of the tested deposit is more than 120m deep, and the high-grade material goes down to a maximum of 70m.

Eighty holes were drilled to arrive at the initial resource, which extends over a strike length of 2.1km and a maximum width of 300m. It is open to the north, south and at depth, said Sumich.

The tenement spans 550sq km. On the current in-ground resource, Sumich estimates that there is a mine life at Kanyika of at least 20 years.

Kanyika represents a resource of 56.4mt at a 1,500 ppm niobium cut-off, which includes the high-grade component of 14.1mt at a 3,000 ppm cut-off.

“We’ve already commissioned Coffey Mining for a scoping study, and that’s under way. That’s due in May/June and we’re looking at a number of options in terms of different products that might come out of it, different metallurgical routes. And, obviously, there’ll be differing capex, opex, NPVs and so forth attached to those different options.

“But I am happy to say that even at this stage, we’re confident that there’ll be some robust economics around these options.” Sumich said that the Malawian venture started out as a uranium play, both at Kanyika and Livingstonia, which is further north near Paladin Ltd’s Kaylekera development.

“We pegged both on the strength of radiometrics done in the 1980s. What we’ve found (at Kanyika) is that while uranium is an important part of the resource, it is not the most significant in terms of value (uranium oxide ranging between 70-100 ppm).

“Niobium is the primary commodity, and we’ll treat the rest as credits.” Sumich said that 10% of all steel contains niobium and in certain applications, the commodity could be used as a substitute for either moly or vanadium. Sumich said “performance and price” were the key factors considered when it came to using niobium as a steel hardener.

World niobium consumption has grown steadily since 1965 from around 3,000t to 2007 (around 63,000t).

Exploration manager Julian Stephens, who spends a fair part of his time in Malawi, loves the environment and working there. Access to the commissioner of mining is good, there’s just one layer of government, it is corruption free and they want projects like Kanyika to advance.

“They (the people of Malawi) understand what Kaylekera can do for the country, and I think it would be fair to say that we could be the number two mine to come along – even though there’s still a long way to go,” said Sumich.

After Paladin “we’re the second most prominent and active in what we’re doing. We did 13,000m on two projects last year, which is a lot for a junior”, said Sumich, who added that Globe also had a regional exploration office in the capital city, Lilongwe.

“Most important, in these uncertain times, we’re well cashed up and at the end of this quarter we will have about $9 million in the bank. And that will see us well and truly into next year.”

At the Livingstonia uranium project, Globe will be doing a 6,000m RC programme over coming months to firm up the economic intercepts the company already has. There will also be some regional exploration drilling within the EPL at three targets.

Next up at Kanyika will be metallurgical test work to improve metal recoveries as well as “looking at having discussions about offtake agreements.

“It (niobium) is a speciality metal, not a high-volume market, we’d have to have a binding purchase agreement in place as a pre-requisite to getting debt finance. And the pre-requisite to the offtake is getting potential samples (of met work) to the customers,” said Sumich.

Also ahead, more drilling will be done at Kanyika to extend the area of the high-grade, shallow deposit. Why Africa?

In a word, Sumich says “Paladin.” Because Globe started off with uranium, “we wanted to be in a place without too many complications – even 2-3 years ago, Australia was looking like a bit of a dog’s breakfast, and history has borne that out.

“Africa is in a nice space; the sandstone Karoo environment which has not yet been pegged out. It’s a great opportunity. There’s a feeling in Africa that they ‘want to get on with it’. So if you are good for your word and you put dollars in the ground the (Malawian) Government will support you 100%. That’s good for us. That’s how we want to work,” said Sumich.