Development Projects
Sandpiper Joint Venture Project
Overview
Minemakers acquired its direct equity in the Sandpiper Joint Venture ("JV") phosphate project in offshore Namibia via the acquisition in July 2009 of Bonaparte Diamond Mines NL ("Bonaparte").
Sandpiper Phosphate Project
Sandpiper Joint Venture Phosphate Project
ML170, EPLs 3323, 4009, 4010, 4021,4059, 3414, 3415. The project is a JV between Minemakers Limited and Union Resources Limited and a Namibian owned company Tungeni Investments cc.
Namibian Marine Phosphate (Pty) Ltd ("NMP")
| Minemakers Limited | 42.5% | |
| Union Resources Limited | 42.5% | |
| *Tungeni Investments cc | 15% | Namibian Partner |
* Minemakers holds a 13.1% interest in Union Resources Limited.
The JV was signed in October 2008 to jointly develop the companies' adjacent marine phosphate projects. The companies then entered into a Shareholders Agreement dated 30 July 2010. The JV is well placed to rapidly develop a new phosphate province in Namibia and controls a substantial part of the most prospective areas. The JV tenements lie in waters approximately 60km off the coast of Namibia and cover a combined area of approximately 7,000km2 in the regional phosphate enriched province to the south of Walvis Bay in water depths of 180–300m. 2,233km2 of the target area now is covered by a granted Mining Licence, valid for 20 years. The JV area incorporates the phosphate enriched province to the south of Walvis Bay and specifically includes all of the central enriched core area, where published regional mapping showed phosphate concentration of more than 20% by weight. These deposits were delineated during regional scientific studies in the 1970s but have remained undeveloped. They occur as unconsolidated sea floor sediments, which now lie within the reach and capability of currently available dredging technology.
Minemakers sees development of the JV project as a natural expansion strategy to establish two geographic production centres to supply growing global phosphate requirements. This strategy places the company in the unique position of having two significant developments targeting independent fertiliser producers worldwide.
Scoping Study
A Scoping Study for a mining operation at an annual production rate of approximately 3Mtpa was completed in late 2010. The favourable result from the Scoping Study and justified commitment to a Definitive Feasibility Study, due for completion in the first half of 2012. It is envisaged that construction could commence soon after gaining the necessary development funding and government approvals and it will take about a year. First production is planned for the second half of 2013.
Summary economics are as follows. Although the Australian dollar has appreciated somewhat since then, it has been outstripped by increases in rock phosphate prices. At the time of the Study, the economic modelling needed a rock price of $90/t FOB Walvis Bay. It is now thought that a figure of about $140/t would be reasonable, based on subsequent increases in phosphate rock price.
Feasibility Study
A Definitive Feasibility Study was commenced during 4Q10 and is on schedule to be completed towards the end of 1Q12.
A group of highly profiled international consultants with specific expertise in key areas has been appointed to assist with the studies. Those consulting companies are advising on marine dredging technology, shore transfer, slurry handling, mineral processing and beneficiation, environmental issues, permitting, engineering and construction.
Mineral Processing
Initial metallurgical testwork studies in Israel were encouraging. Simple size separation to remove seashells and barren muds, lifted the phosphate grade considerably.
Pilot scale testwork in Johannesburg, as part of the DFS, will be completed in 4Q12. It seems likely that a 28% P2O5 product will be attainable.
Mining Processing and Marketing Overview
It is intended that mining of the seafloor sediments will be by a large capacity dredge, using existing technology. The dredge will steam to a site about 20km south of Walvis Bay and discharge the ore to a buffer pond after docking with a floating pipeline (refer video).
At the buffer pond, seashells will be screened off and the undersize phosphate sand and mud will be transported by slurry pipeline to a site about 4km inland from Walvis Bay Port. A processing plant will remove the barrenmuds, which will be stored as tailings. The phosphate sands will be washed using the tailings grey water, to remove salt, then dried and taken to the port for export.
Current studies have indicated that best transport to port for environmental reasons, is likely to be in a closed conveyor system.
Production is aimed to begin at 1Mpta and be ramped up to 3Mtpa as markets develop and the capacity of the port is expanded.
The JV is also keen to expand into downstream processing to produce fertilisers. Florida testwork, at the JDCPhosphate facility, to produce SPA, has been initially positive.
The phosphate rock has been found suitable for the production of merchant grade phosphoric acid ("MGPA") and is very reactive, which opens the possibility of sales into the direct application market. Test samples for marketing purposes will be made available before the end of 2012.
Resources
Resources have been estimated, at a 10% P2O5 cut-off, as follows:
| INDICATED | INFERRED | TOTAL | |
|---|---|---|---|
| Project | 74Mt @ 20.6% P2O5 | 1.9Bt @ 18.4% P2O5 | 1,974Mt @ 18.5% P2O5 |
| Minemakers' Share | 36Mt @ 20.6% P2O5 | 0.91Bt @ 18.8% P2O5 | 946Mt @ 18.5% P2O5 |