November 21, 2011 15:08 ETElemental Minerals Leads the Way in...

November 21, 2011 15:08 ET
Elemental Minerals Leads the Way in South Africa for Mineral Exploration and Development
NORWICH, UNITED KINGDOM--(Marketwire - Nov 21, 2011) -

Elemental Minerals Limited's major project is its 93 percent owned Sintoukola Potash Project. The Sintoukola Potash project is situated in a geological environment commonly known as the Congo Basin which stretches from Gabon to Angola on the western seaboard of Africa.
Exploration activities by a French exploration company (FRCP) in the 1960s and 70s identified several Sylvinite and Caranallite prospects in the area, which are contained within a 1,436 sq km exploration license held by Sintoukola Potash SA.

"The Republic of Congo has a very successful track record of developing the national resources sector, particularly in oil and gas. It is the fifth largest oil producer in Sub-Saharan Africa and a perfect location for us," says John Saunders, Executive Director of Elemental Minerals.
The company's main operational hub is in Pointe-Noire. Its southern license boundary is 55km north of Point-Noire on the coastline and the focus of its exploration is 90km north of Pointe-Nore. With most investors looking at gold, silver and copper, potash may seem like an unlikely business opportunity from the onset.

However Saunders believes investors of the project will see real returns very quickly as long as all the boxes are ticked through the process. "Potash sits at the forefront of investment opportunities. The market remains strong and potash prices are high and constantly increasing," he asserts.

Read the full report for Elemental Minerals at: http://www.africanbusinessreview.co.za/reports/elemental-minerals

Elemental Minerals Leading potash developer active in the Republic of CongoRebecca D'Souza With its heavy investment in the Sintoukola Potash Project, Elemental Minerals is on target to bring potash to the market by 2015
Elemental Minerals Limited is a South African-based mineral exploration and development company listed on the Australian and Toronto Stock Exchanges (ELM). The company is currently developing a high grade, near term potash project in the Republic of Congo at its 93 percent owned Sintoukola Potash Project.

Sintoukola Potash Project

The Sintoukola Potash project is situated in a geological environment commonly known as the Congo Basin which stretches from Gabon to Angola on the western seaboard of Africa. Exploration activities by a French exploration company (Syndicat de Recherches de Potasse au Congo) in the 1960s and 70s defined a vast evaporate zone pretty much across the entire Congo Basin containing significant sylvinite and carnallite mineralisation. The area examined included the 1,436 sq km exploration license now held by Sintoukola Potash SA, Elemental’s Congolese subsidiary, where in excess of 20 holes were drilled defining very prospective sylvinite and carnallite mineralisation. Elemental’s first task on securing the licence was to undertake a target generation exercise based on the historical results and then to complete a confirmatory exploration programme to define a code compliant sylvinite resource. The Phase 1 resource was released in April 2011, exceeding the company’s targets both in terms of grade and tonnage.

As the results of the Phase 1 programme were returning Elemental, as part of its fast track strategy, appointed the feasibility study engineers led be a very strong in house team and commenced the feasibility study

“The Republic of Congo has a very successful track record of developing the national resources sector, particularly in oil and gas. It is the fifth largest oil producer in Sub-Saharan Africa and several years ago promulgated a new mining code that has proven to be the trigger for a number of mineral exploration programmes and has helped make it a perfect location for us,” says John Sanders, Executive Director of Elemental.

The company’s main operational hub is at the Sintoukola project site at Kola about 90 km north of Pointe Noire, where they maintain a fully equipped camp for approximately 100 employees and contractors supported by a Pointe Noire office providing administrative and logistical services to the exploration and project development teams on site.

The Sintoukola licence is large, covering 1,436 km2 with the southern license boundary 55km north of Point-Noire on the coastline. The resource footprint is currently 28 km2, which is a small portion of the overall licence area, with the Phase 2 programme looking at another 30 km2.

In addition the Company has acquired 295 line kilometres of recent oil industry regional 2D seismic data on the Sintoukola license area and data for a further nine historic and recent potash and oil exploration boreholes, which have allowed a high quality target generation exercise to be undertaken. This target generation exercise has delineated two potentially significant potash domains; one surrounding and contiguous to the existing Kola deposit, and the other to the south west, namely the Dougou area. The Kola target is now interpreted to have an aerial extent of approximately 120km2 which represents a 200 percent increase over and above of the area currently targeted for additional mineralisation. At the newly interpreted Dougou area the targetable mineralisation footprint is approximately 75km2.

There are a number of factors that make Pointe-Noire an ideal mining destination, according to Iain Macpherson, Chief Executive Officer (CEO). “The location on the coast is adjacent to a large and effective port, which makes it relatively easy to import mining equipment. Infrastructure is also favourable and power and gas are also readily available,” he says. “If you are going to build a mine in Africa you are certainly going to want to do it near to the coast,” he adds.

With most investors looking at gold, silver and copper, potash may seem like an unlikely business opportunity from the onset. However Sanders believes investors of the project will see real returns very quickly as long as all the boxes are ticked through the process. “Potash sits at the forefront of investment opportunities. The market remains strong and potash prices are high and have been increasing in recent years,” he asserts.

The Sintoukola Potash project has the backing of a strong management team, which Macpherson believes has been a crucial backbone to its success. “We have worked together in the past on similar style fast-track projects. We have a very clear understanding of what it takes to build projects on the continent,” he says, “- and we have supplemented the management team with a high quality feasibility study engineering team that was handpicked for the purpose and is supported by a technical advisory group that has enormous experience in the potash industry. The progress we have made on the exploration and feasibility study is testament to the quality of the project, the teams that we have put together to develop it and our very focused approach to getting it to market in good time says Macpherson. “It is an exciting project from a personal perspective because it gives us the opportunity to take a project from inception all the way through to the building of the mine in a relatively short period of time,” adds Sanders.

Stages of the project

Elemental Minerals has put together an aggressive but realistic plan for the project, which projects the commencement of production of potash in 2015. “We will ramp up to full production over the following two years,” confirms Macpherson. “We have set ourselves some very tough targets but I am pleased to say that we have not just met but exceeded them to date,” adds Macpherson.

The company raised over $20 million in 2010, which paid for the first phase of the project. The confirmatory exploration programme was a drilling programme that allowed Elemental Minerals to assess the situation. “Our work to date is focussed on 28sqkm of the total licensed area, which demonstrates the scalability of the resource,” comments John Sanders. “We are working with a very high grade Sylvinite on a large scale, which will continue to expand. These are the key competitive advantages that the source itself offers us,” he adds.

Elemental Minerals completed a dual listing on the Toronto Exchange this year raising a further $55m, which will fund the company to mid 2013 with the definitive feasibility study due in early 2013. Elemental are currently well advanced with the pre-feasibility study, which will focus on all aspects of the mining project including mining, processing and the required infrastructure in addition to its environmental and social impact. “This phase will include further exploration activity essentially to convert the existing resource towards a mining reserve, which involves a combination of drilling and further seismic work, which is currently underway,” adds Macpherson.

http://www.africanbusinessreview.co.za/reports/elemental-minerals

During the second half of the feasibility study, Elemental Minerals will start engaging with consumers of potash with the prospect of establishing some long and short term offtake and purchase agreements. This will not only provide some of the project finance needed for the next stages of development, but will also secure a market for their product. “We are very focused on being one of the first new potash companies to be looking for finance and at the moment I think we are leading the pack, concludes Macpherson.