Lemur Holdings

Lemur, a wholly-owned subsidiary of Bushveld Minerals, is focused on coal energy projects. Its flagship project is the Imaloto coal-to-power project in southwest Madagascar, which consists of 4 exploration permits and one mining and exploitation permit, covering a total area of about 81.25 square kms. Imaloto is an integrated coal-fired power project, envisaging a 136 Mt coal mine, a 60 MW power plant and a new transmission line stretching over 250 km. It is the only coal-to-power solution being developed in Madagascar. The power plant is scalable from the current planned 30 MW to 60 MW and the transmission line is expandable up to 500 km.

The project has a total of 136 Mt JORC compliant mineral resources, of which 92 Mt is in the measured and indicated category. In addition to a fully-executed mining exploitation licence, Lemur has 2 exploration permits covering a combined 87.5 square km in close proximity to the Imaloto Power Project. Since 2008, Lemur has invested over US$10 million in developing the project.

From a geographical location and development phase perspective, the Imaloto Power Project is perfectly positioned to address the persistent power supply challenges that Madagascar faces, particularly in its least-developed but mineral-rich southern region. The southern region currently does not have a power grid and is almost entirely powered by isolated generators, which have a combined capacity of no more than 20 MW and currently produce roughly 8 MW.

The Imaloto power station will be located next to the coal mine, providing a captive market for the mine’s production and unlocking the intrinsic value in the underlying project. In addition to substantially increasing the generation capacity in Madagascar, the initial 60 MW capacity of the Imaloto Power Project will form the basis for a power grid for the southern region.

The Imaloto Power Project is at an advanced stage. The feasibility studies for both the power plant and the transmission line were completed by Sinohydro, following a technical co-operation agreement signed in 2017.

The Imaloto project has a full mining right for the coal mine as well as a 30-year Independent Power Producer concession from the government of Madagascar. Lemur has also concluded a 30-year Power Purchase Agreement for an initial 25 MW from JIRAMA, the state-owned utility.

During the first quarter of 2019, Lemur concluded a US$1 million facility agreement with the Development Bank of Southern Africa for project preparation finance. This facility will be used to complete the remaining project development activities and pay for advisory services to enable the project to reach financial close.

Lemur completed its drilling programme for the Social and Environmental Impact Assessment (‘SEIA’) specialist studies in December 2019. A total of 16 holes were drilled. The extracted cores will be analysed using a number of different tests, including geological and coal quality. Lemur expects to submit the SEIA studies to the Ministry of the Environment during the second half of 2020.

The coal mine optimisation study, aimed at exploiting the underground portion of the mine earlier than previously planned, has been completed. On the basis of this study, Lemur developed the scope of work for a Definitive Feasibility Study, which commenced in the first half of 2020. Negotiations with the contractor for the engineering, procurement, and construction agreement for the power station are ongoing and are expected to be finalised during the second half of 2020.

Lemur is in project finance discussions for the construction capital with interested lenders. The company’s objective is to get the project to a ‘construction-ready’ stage, which we previously announced would be completed in the first half of 2020. Due to the effects of Covid-19 we anticipate that the project will get to construction readiness in the first half of 2021 and attain financial close soon afterwards. Discussions with lenders are expected to be concluded during 2020, once the key studies such as the SEIA and the mine definitive feasibility study are completed. Subject to financial close on approximately US$160 million of funding, the plant commissioning date would be 2022.

Lemur will continue to focus on discussions with potential strategic partners as well as with the government of Madagascar for the implementation phase of the project.

 

The PQ Iron & Titanium and PQ Phosphate Projects

The PQ Iron & Titanium Project is a multicommodity project, located 45 km north-northwest of the town of Mokopane in Limpopo Province, South Africa. The Project has a JORC-compliant Inferred and Indicated Mineral Resource of 955 Mt, with an average grade of 33.7 % Fe and significant TiO₂ (over 18 % TiO₂ in-magnetite concentrates). The project boasts some of the highest in-magnetite grades of titanium in the world and could be developed as a titanium and pig iron project in the long run, depending on the evolution of low capital intensive methods for processing the ore.

Bushveld Minerals is following, with interest, advances in metallurgical processing used for similar deposits and exploring partnerships with technology partners. No further work is planned on the project at this stage.

The PQ Phosphate Project resource lies immediately above the iron ore and titanium resource of the PQ Project. The Company reported on 3 June 2014 a maiden phosphate resource statement for the PQ deposit of 442 Mt, with average phosphate grades of 3.6 % P₂O₅. Although the grades are low, the PQ Phosphate deposit is in the immediate hanging wall of the PQ Project and would be mined concurrently with the stripping of the latter. Of particular interest is that laboratory-scale test work has shown that 37 % P₂O₅ concentrate grades are achievable from this deposit.

Both projects are based on the same licence area as Mokopane, where there is a mining right held by Pamish Investments No. 39 (Pty) Ltd (‘Pamish’). Bushveld Minerals currently owns an effective controlling interest of 64 % in the PQ Iron & Titanium and PQ Phosphate projects. While the mining right is subject to Mining Charter II regulations, the Company is committed to adopting Mining Charter III regulations in respect of host community and employee shareholding requirements. Therefore, a 5 % share for these stakeholders will be vendorfinanced and repaid from future proceeds from the mine. Bushveld Minerals’ interest in the PQ Iron & Titanium Project and PQ Phosphate Project will accordingly reduce from 64 % to 60.8 %, while Izingwe’s shareholding will reduce from 36 % to 34.2 %. Pamish has further committed to allocate an additional 5 % to an Employee Share Ownership Participation Scheme once the mine is operational, which will result in Bushveld Minerals ultimately holding 57.6 % and Izingwe 32.4 %.

Progress to date has been limited to understanding the economic parameters necessary for success and how these projects can be configured in line with the Company’s approach towards developing projects. No further work is planned on these projects while the Company advances its vanadium platform.

AfriTin Mining Limited

The Company holds an 8 % shareholding in AIM-listed AfriTin Mining Limited, an African mining company with a portfolio of near-production tin assets in Namibia and South Africa, which was demerged from Bushveld Minerals in November 2017.

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