1st Jun 2016 08:44
LONDON (Alliance News) - Zambia-focused minerals processor BMR Group PLC on Wednesday said it is commencing construction of its pilot treatment plant in Kabwe, after having received a Letter of Intent from a private South African group, under which BMR will be able to draw-down from a USD2.0 million facility.
BMR said it continues to refine the process and advance the engineering design work, as well as its plant construction plans for the pilot treatment plant. BMR also noted it had received an approach for an off-take agreement in respect of the increased levels of production than those originally anticipated at the plant.
Following this, BMR received a letter of intent from an unnamed South African group last Tuesday, under which BMR can draw-down from a USD2.0 million facility.
This letter of intent is subject to a completed sale and purchase agreement in relation to the sale of 500 tonnes per month of agricultural grade zinc sulphate heptahydrate and 300 tonnes per month of lead sponge over a three-year period, as well as the eventual sale of 300 tonned per month of LME grade zinc cathodes.
BMR said a further announcement will be made when the terms are finalised and related agreements are entered into.
BMR added that it expects the plant to generate "sufficient production capacity" for the zinc sulphate heptahydrate and the lead sponge to satisfy the letter of intent, as well as the zinc cathodes "in due course".
To produce the zinc sulphate heptahydrate and the lead sponge needed for the agreement, BMR said it expects capital expenditure to be around USD2.7 million, which it will satisfy using current cash resources and the draw-down facility.
Operating expenditure of the plant is expected to be around USD150 per tonne of tailings, but BMR said it expects that the net sales will provide sufficient funds for it to complete the zinc electro-winning and copper/iron removal circuits at the plant.
BMR is now commencing construction of the plant, focusing currently on securing larger items with long ordering lead times. The plant is expected to be commissioned for the commencement of production by early 2017.
Shares in BMR were up 7.8% at 4.85 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Berkeley Mineral Resources