[IMG] Stratmin Global Resources PLC Operational Update Source:...

Stratmin Global Resources PLC Operational Update
Source: UK Regulatory (RNS & others)

07 December 2015

StratMin Global Resources Plc (AIM: STGR), London's only listed graphite production and exploration company, is pleased to announce the achievement of operational level breakeven and a comprehensive update on progress achieved since appointment of its new CEO, Brett Boynton, and entering into a strategic partnership with Tirupati Carbons & Chemicals (P) Ltd ("Tirupati").

Plant Stabilisation, Operations and Optimisation

The process of upgrading the present plant to a consistent 6,000+ tonnes per annum ("TPA") production capability was initiated in July 2015 with tangible progress achieved over the past 5 months.

-- Production output over the period increased despite selective plant downtime and increased maintenance.

-- For the three month period from September to November 2015, 705 tonnes were produced and 603 tonnes dried, finished and packaged ready for sale.

-- First stage refurbishments will be completed this month and from January 2016, production of at least 400 tpm is expected with sustained operational profitability.

-- Funds from Bass Metals Ltd. will be used for key equipment upgrades in the mining fleet and milling circuits enabling production to be increased to over 600 tpm from the second quarter of 2016.

Lead times for importation of equipment into Madagascar have limited the immediate completion of further refurbishments, but in response we have developed enhanced fabrication capability on site and this will serve the Company well in the development, subject to additional funding, of a new 12,000 tpa plant in 2016.

Sales & Marketing Developments

Sales over the period have increased significantly and we expect to see an improvement in average sales price as we smooth production and increase average grades.

Sales during the September to November 2015 period totaled 478 tonnes, including quantities of unscreened and lower grade concentrates produced during refurbishment and testing. Revenues from these sales totaled GBP195,000.

Exploration

To optimise resource management and security, a low cost exploration plan was developed and executed as announced on 23 November 2015. The programme has so far delivered:

-- Completion of detailed geological mapping utilising geophysics, trenching and geochemical sampling and the identification of significant additional mineralised zones.

-- Completion of total station topographical mapping of the area with a contour interval of 2M at 1:1000 scale. This has provided surface data for various activities including resource estimation, identification of prospective reclaimable non-mineralised land areas for community use and for development of proposed new facilities and associated infrastructure.

-- A detailed JORC 2012 compliant resource report is in preparation for release in January.
-- Improved mining rates with enhanced grade control and resource utilisation.
Project & Business development

Alongside the ongoing optimisation of the present operations, we have progressed detailed planning and engineering for the following developments at the present operations:

-- On site engineering, fabrication and manufacturing facility for independent capability in various types of equipment including processing, materials handling, waste management and structural steel. This will enable the on site team to fabricate conveyors and storage systems, flotation cells, dust control equipment such as cyclones, and structural components for sheds and equipment covers.

-- Subject to additional funding, a new 12,000 tpa state of the art, inline flake graphite processing facility with capability to produce customised flake graphite concentrate for varying customer requirements in purity up to 97%. This will increase the total capacity at present operations to over 18,000 tpa flake graphite concentrate production.

Establishing a full on site engineering capability enhances maintenance and reduces dependence on consultants and imported equipment. In addition, it will provide a significant portion of the new plant build capability and longer-term expansion capacity.

The Vatomaina Project under JV with our Strategic Partners has been advanced. The initial capacity target for this project is a similar 12,000 tpa flake graphite concentrate operation. Subject to additional funding, on site work is scheduled to commence in the first quarter of 2016, targeting initial production by the second quarter of 2017.

In addition to the Loharano and Mahefedok project areas, the Group holds a further Exploitation License covering an additional 6.25 square kilometers near Andranombolahy, approximately 30km north of the existing mine. Neighboring operators are in production and historic geological data and preliminary fieldwork indicate that this area has potential to host higher purity flake graphite deposits. Follow up exploration in the area will be initiated Q1 2016. The objective is to define a resource capable of supporting a further 12,000 tpa operation.

Subject to availability of funding, the Group's portfolio has potential to support a total production capacity in excess of 42,000 tpa from these diversified deposits within Madagascar. The modular expansion approach enables staged CAPEX and significant operational advantages. It is also attractive to buyers looking for security of supply from multiple sources.