1st Sep 2014 09:58
LONDON (Alliance News) - Red Rock Resources PLC Monday said Jupiter Mines Limited, in which it has a 1.2% holding, achieved above-target production of manganese for the current year.
Jupiter Mines' 49%-owned and managed Tshipi Borwa manganese mine in the Kalahari Desert in South Africa achieved production of 1.1 million tons of manganese, and projects 2.7 million tons for the current year, compared to an original target of 2 million tonnes.
To mid-August, in the first five and a half months, production has exceeded 1 million tons, which is potentially scalable to 3,600,000 tonnes for the current year.
Jupiter Mines compensated for recently lower manganese prices by achieving lower operating costs, which sit around USD2.60 dry metric tonne unit freight on board, "which may now be the lowest in the industry", Red Rock said.
Nearly 80% of Tshipi sales have been into China, where the market share achieved in Chinese seaborne manganese trade after just over a year of operation is estimated at 12%.
The operations have a 60-year planned life, low cost, open pit "which is scalable", and a rail load-out station that can load a train in 4 to 5 hours.
"Jupiter Mines' Tshipi Borwa mine has performed exceptionally well...exceeding planned production volumes, seizing a substantial share of the Chinese market, and achieving a low cost of production," said Red Rock Chairman Andrew Bell.
A valuation of the Tshipi Mine by consultants Venmyn Deloitte values Jupiter Mines' equity stake at AUD460 million on the preferred valuation.
At Jupiter Mines' Mount Mason haematite project in Western Australia, the timeline to production, based on the development schedule of the Esperance port expansion project, is June 2017, Red Rock said.
"Mount Mason can be brought into production from existing financial resources, and the financial and operational strength of the JMS shareholders enables JMS to influence the course of events in the Yilgarn" said Bell.
Red Rock Resources shares were down 3.9% to 0.221 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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