REG - Firering Strategic - Quicklime Operational Update

Firering Strategic MineralsAnnouncement

05/06/2024 07:00

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RNS Number : 1091R  Firering Strategic Minerals PLC  05 June 2024

Firering Strategic Minerals plc / EPIC: FRG / Market: AIM / Sector: Mining

5 June 2024

Firering Strategic Minerals plc

("Firering" or "the Company")

 

Quicklime Operational Update

 

Significant progress towards first production and independent confirmation of
tonnages and grades

 

Firering Strategic Minerals plc, an emerging quicklime production and critical
mineral exploration company, is pleased to announce an operational update with
regards to its quicklime project in Zambia ("Limeco"), which is being
fast-tracked towards the commencement of commissioning in Q4 2024.

 

Highlights

Advancing work to commence phased commissioning and first of eight kilns to
come on stream in Q4 2024:

·    Commenced modifications to existing plant, including changing fuel
source system for the kiln operation from Heavy Fuel Oil ("HFO") to coal
gasification system.

·    Engineers responsible for erecting and commissioning the two coal
gasifiers to arrive on site in July 2024.

·    Advancing renovations to the crushing plant to enhance the correct
limestone size fraction for the kilns and the production of aggregate from its
waste stream.

·    Limestone stockpile of approximately 150,000tn available to support
production.

 

Building a multi revenue stream operation from quicklime, aggregate and
ancillary products

·    Advanced discussions with potential clients for the offtake of
quicklime; strong interest due to the recent increased copper production
activities in the Zambia Copperbelt.

·    Sold aggregate produced to date with future offtake agreements pending
on the finalisation of the renovations to the crushing plant in Q3 2024.

·    Final stage of discussion with a third party interested in leasing the
HFO tanks for diesel storage.

 

Strengthening economics of estimated +30-year life of mine:

·    Independent consultant, Earthlab Exploration and Mining Consulting
(Pty) Ltd ("Earthlab") reproduced tonnages and grades using the same range of
cut-off grades used by Golder Associates based on the 2018 geological model.

·    Reconfirmed potential additional 95Mt Exploration Target - licence
application in place and license pending.

 

Yuval Cohen, Chief Executive of Firering, said: "We are delighted with the
progress being made at Limeco, our near production quicklime project with a
historical pre-acquisition spend of +$100m. Engineers from Protechglobal
Consulting Services, the firm behind the initial plant design on behalf of
Glencore, have commenced modifications to the lime plant. The general design
for the coal gasifier plant, set to replace the HFO installation, was also
approved with the first of the two gasifiers expected on site in Q3 2024.

 

"We have been selling aggregate to industrial end-users since October last
year, enhancing our cash flow position. Additionally, and in line with our
strategy to diversify revenue streams, we have advanced our quicklime offtake
discussions as well as negotiations regarding the leasing of HFO tanks.
Furthermore, we are planning to sell ash produced during the coal gasification
to the local cement industry until our own cement plant has been erected.

 

"I am also pleased to note that Earthlab successfully reproduced tonnages and
grades using the same range of cut-off grades used by Golder based on the 2018
geological model and has affirmed a possible extension to the mineral resource
of some 95Mt along strike to the southeast. Limeco has applied for an
exploration licence for this area, further securing its position as a
long-term supplier to various industries, including local and regional copper
producers.

 

"I look forward to further updating the market as we focus on commissioning
the first kiln in the coming months."

 

DETAILS

Limeco Assets

Limeco's assets comprise a lime plant, crushing plant, limestone quarry, and
ore and aggregate stockpiles (Figure 1).

Figure 1: Location of Limeco's assets (Source: Limeco, 2023).

Figure 2: Primary crusher with lime plant in background (Source: Limeco, 2023).

 

Lime Plant Renovations

Limeco has engaged ProtechGlobal Consulting Services ("Protech"), which
originally designed the lime plant for Glencore, for the modifications to the
lime plant. Protech engineers have commenced these modifications (Figure 3),
including changing the fuel source system required for the kiln operation from
HFO to coal gasification.

Figure 3: Protech inspecting the kilns and stripping the burner ports to be
modified for coal gasification (Source: Limeco, 2024).

 

Coal required for the gasification process will be sourced locally from Maamba
Collieries, located 369km from Limeco.  Engineers responsible for erecting
and commissioning the two coal gasifiers will arrive on site in July 2024. The
high quality coal used in the gasifier would ensure a tar free gasification
process and ash produced during the process will be removed. Limeco plans to
sell this ash to the local cement industry, creating an additional revenue
stream.

 

Quicklime Offtake Agreements

Limeco is in advanced discussions with potential clients for the offtake of
its quicklime. Limeco has received strong interest in its quicklime due to the
recent increased copper production activities in the Zambia Copperbelt, which
are further encouraged by the recent increases in the copper price.

 

Crushing Plant

Renovations to the crushing plant are on-going to enhance the production of
-90mm +60mm limestone for the kilns as well as the production of aggregate
using the waste stream (-60mm) from the crushing plant (Figure 4).

 

The double roll crusher will be replaced by an impact crusher, which will
arrive on site in June 2024. Aggregate produced to date has all been sold and
future offtake agreements are pending on the finalisation of the renovations
in Q3 2024.

Figure 4: Aerial view of renovations at crushing plant (Source: Limeco, 2024)

 

HFO Storage Tanks

Due to the planned changeover from HFO to coal gasification, the two large HFO
storage tanks will no longer be used for the production of quicklime. Each
tank has a storage capacity of 16,000t of fuel and Limeco is currently in
negotiations with a third party who is interested in leasing these tanks for
diesel storage. Once the lease contract is concluded, Limeco will receive
additional cashflow that will be used towards the operations at its lime
plant.

Mineral Resource

Golder estimated Mineral Resources ("MR") in its October 2017 report as shown
in Table 1.

 

 Class                Cut off  Tonnes (Mt)  Variables
                      CaCO(3)               MgO          Al(2)O(3)  CaO    Fe(2)O(3)  LOI    SiO(2)
 Measured Resources   92       18.1         95.78  1.13  0.23       53.69  0.13       42.49  0.76
 Indicated Resources  92       45.5         95.28  1.79  0.35       53.37  0.2        41.89  1.05
 Inferred Resources   92       10.1         94.53  2.97  0.65       52.95  0.47       41.13  1.6
 Total Resources      92       73.7         95.3   1.79  0.36       53.39  0.22       41.93  1.05

Table 1: MR estimated by Golder (2017).

 

Eight different limestone types (B1 to B8) were identified during geological
logging (Figure 5).

 

Figure 5: Logging guide for the limestone types identified at Limeco (Source:
Limeco, Mopani, 2017).

 

Material types B1, B2 and B8 were classified as ore and material types B3 to
B7 as waste.  Future tests will focus on whether the B3 and B4 material types
can be reclassified as ore. All other rock types mined will be crushed to
produce aggregate.

 

In 2018, Golder updated the 2017 geological model and estimated total tonnages
at cut-off grades varying from 50% to 95% CaCO(3) (Table 2). Earthlab
independently reproduced these tonnages using the same range of cut-off grades
(Table 3).

 

 

 

 CaCO(3) Cut-off (%)  Tonnage (t)  CaCO(3) (%)  MgO   Al(2)O(3)  CaO    Fe(2)O(3)  LOI    SiO(2)

                                                (%)   (%)        (%)    (%)        (%)    (%)
 50                   141,787,573  91.40        2.64  0.53       51.21  0.33       39.72  1.47
 55                   141,787,573  91.40        2.64  0.53       51.21  0.33       39.72  1.47
 60                   141,759,682  91.41        2.64  0.53       51.21  0.33       39.72  1.47
 65                   141,734,739  91.41        2.64  0.53       51.21  0.33       39.72  1.47
 70                   141,492,384  91.45        2.63  0.53       51.23  0.33       39.72  1.47
 75                   140,490,481  91.59        2.62  0.53       51.30  0.32       39.71  1.46
 80                   137,388,762  91.89        2.57  0.52       51.47  0.31       39.73  1.44
 85                   126,670,646  92.64        2.37  0.48       51.89  0.29       40.13  1.37
 90                   95,905,548   94.17        1.97  0.38       52.74  0.24       40.84  1.15
 95                   41,003,811   96.18        1.25  0.20       53.88  0.13       42.49  0.73

Table 2:Total tonnages produced by Golder using the 2018 geological model.

 

 CaCO(3) Cut-off (%)  Tonnage (t)  CaCO(3) (%)  MgO   Al(2)O(3)  CaO    Fe(2)O(3)  LOI    SiO(2)

                                                (%)   (%)        (%)    (%)        (%)    (%)
 50                   141,751,554  91.40        2.64  0.53       51.21  0.33       41.89  1.50
 55                   141,751,554  91.40        2.64  0.53       51.21  0.33       41.89  1.50
 60                   141,723,663  91.41        2.64  0.53       51.21  0.33       41.89  1.50
 65                   141,698,720  91.41        2.64  0.53       51.21  0.33       41.89  1.50
 70                   141,456,278  91.45        2.63  0.53       51.23  0.33       41.89  1.50
 75                   140,453,551  91.59        2.62  0.53       51.30  0.32       41.89  1.49
 80                   137,352,124  91.89        2.57  0.52       51.47  0.31       41.90  1.47
 85                   126,632,940  92.64        2.37  0.48       51.89  0.29       41.95  1.39
 90                   95,886,315   94.17        1.97  0.38       52.74  0.24       42.11  1.17
 95                   40,987,598   96.18        1.25  0.20       53.88  0.13       42.60  0.73

Table 3: Total tonnages produced by Earthlab using the 2018 geological model.

 

Earthlab, independent consultant, commented: "Earthlab reviewed the existing
2017 and 2018 geological models, underlying data, and the 2017 Mineral
Resources report prepared by Golder Associates. Using the 2018 geological
model, Earthlab was able to reproduce total tonnages and grades reported by
Golder by applying the same range of cut-off grades. We agree with Golder that
further work should, inter alia, focus on testing the B3 and B4 material's
suitability for use in the production of quicklime, which would have a
positive impact on the Mineral Resource."

 

Competent Person

In accordance with the AIM Rules - Note for Mining and Oil & Gas
Companies, the information contained in this announcement has been reviewed by
Mr. Deon du Plessis. Mr du Plessis is a qualified professional Geologist
(Pr.Sci.Nat. - 400050/05) and Fellow of the Geological Society of South Africa
(FGSSA - 963338).  Mr du Plessis has over 22 years of relevant experience
within the geology and mining sectors.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

*** ENDS ***

 

For further information visit www.fireringplc.com or contact:

 

 Firering Strategic Minerals                          E: info@firering-holdings.com

 Yuval Cohen
 SPARK Advisory Partners Limited (Nominated Adviser)  T: +44 20 3368 3550

 Neil Baldwin / James Keeshan / Adam Dawes
 Optiva Securities Limited (Joint Broker)             T: +44 20 3137 1903

 Christian Dennis / Daniel Ingram
 Shard Capital Partners LLP (Joint Broker)            T: +44 20 7186 9950

 Damon Heath / Erik Woolgar
 St Brides Partners Limited (Financial PR)            E: firering@stbridespartners.co.uk

 Isabel de Salis / Susie Geliher / Isabelle Morris

 

 

About Firering

Firering Strategic Minerals plc is an AIM-quoted mining company focused on
exploring and developing a portfolio of mines producing strategic minerals in
Côte d'Ivoire, specifically lithium and tantalum, to support the global
transition to net zero emissions. It operates the Atex Lithium-Tantalum
Project in northern Côte d'Ivoire, which is prospective for both lithium and
tantalum.  Firering's main focus to date has been to advance development at
Atex with a view to establishing a maiden lithium resource and then
progressing a Lithium project through to DFS.  Firering is also assessing
pilot scale production of ethically sourced tantalum and niobium to generate
early revenues and support further exploration work.  Should pilot production
be successful, a large-scale tantalum production facility may be developed,
which will be supported by a debt facility of FCFA 5,057,000,000
(approximately €7,500,000)  which is available to execute as required to
fund the entire scale-up plan to develop a portfolio of ethically sourced
mineral projects in the Côte d'Ivoire, supplying EV batteries, high tech
electronics and other fast-growing end markets.

On 28 May 2024 Firering announced that it had agreed to acquire a 20.5%
shareholding in Limeco, together with an option to acquire up to a further
24.5% shareholding.

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