Celamin Holdings major holder Lion Selection acquires more shares in African phosphate play Wednesday, March 09, 2011 by Proactive Investors With canny African resources investor, Lion Selection Group acquiring more shares in Celamin Holdings, this little known phosphate play is about to garner greater attention as a feasibility study on a high grade, low cost phosphate mine development in Africa is expected by September. With canny African resources investor, Lion Selection Group acquiring more shares in Celamin Holdings, this little known phosphate play is about to garner greater attention as a feasibility study on a high grade, low cost phosphate mine development in Africa is expected by September.
Celamin Holdings (ASX: CNL) substantial shareholder Lion Selection Group (NSX: LGP) has acquired an additional 480,367 shares in Celamin on the 1st, 2nd and 3rd March at an average price of $0.40 in on-market purchases.
The purchase increases Lion Selection's stake in Celamin from 11.91% to 12.94%.
For investors not in the know, Celamin, formerly Victorian Goldmines was operating as a gold explorer.
On 29th July, all that changed. Victorian Goldmines acquired 100% of Celamin which owned 80% of two phosphate Exploration Permits and base metals projects in Algeria and Tunisia.
Victorian Goldmines issued shares to Celamin shareholders in return for the projects to be vended into Victorian Goldmines. A name change was effected.
The African permits cover phosphate deposits with identified target potential that has been estimated from previous exploration and mining at 230-320 million tonnes at 17-22% phosphate.
The Bir El Afou Phosphate project is the immediate focus and is an advanced project in Tunisia located in north west of the country with easy access to roads leading to Mediterranean ports.
The exploration target at Bir El Afou is 80-120 million tonnes at 17-22% phosphate (P2O5). The stage 1 production target is 1.5 Mtpa of +32% P2O5 (+70% BPL). The stage 1 Resource target potential is 23-27Mt of 17-22% P2O5 ROM.
The company is targeting first production by the end of 2013. The PFS is estimated to take about 12-15 months at a budget of $1.5 million whilst the Feasibility Study is estimated to take about 12-18 months at a budget of $4.5 million.
A placement of 16 million shares at $0.36 each raised $5.6 million from professional investors in November 2010. Lion Selection Group acquired a holding equivalent to 11.91% of Celamin. Telluride Investments acquired an 8.2% stake in the placement.
The placement will fund the pre-feasibility study (PFS) at Bir El Afou. The PFS commenced October 2010 and the company expects completion in September 2011.
Total development is expected to take 12-15 months at a budget of US$45 million plus working capital. The EBITDA target is for US$50 million per annum.
Celamin has the added bonus of having a phosphate offtake and marketing agreement with a "major international fertiliser company", which is being progressed into a full agreement. The agreement is for all production to be taken from the project at market price.
Celamin also holds another phosphate exploration permit in Tunisia, the Chaketma Phosphate Project which has a exploration target of 150-200Mt of 17-22% P205. Resource Delineation during a feasibility study is planned. A decision whether to develop will be based on an expanded/new offtake commitment.
African institutional investor Lion Selection Group holds other stakes in ASX-listed developers and producers with an African focus including a 19.82% shareholding in Gulf Industrials (ASX: GLF). In a Proactive Investors Research Report issued on 1st September 2010, it placed a valuation case of $0.075 on Gulf, when the Gulf Industrials share price was $0.013. Gulf now trades at $0.086.
Back to Celamin, with a fall in share price from $0.60 to $0.45 due to the political and economic winds of change in Tunisia, Celamin offers a developing phosphate "play" in a sector where institutional investors and professional investors are looking to increase holdings.
CNL Price at posting:
43.5¢ Sentiment: LT Buy Disclosure: Held
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