Celamin Holdings edges closer to delivering PFS on phosphate project

Celamin Holdings (ASX: CNL) has been a quiet achiever in the phosphate sector, which is soon to change with a Pre Feasibility Study (PFS) to be delivered from Celamin Ltd within weeks for the Bir El Afou Phosphate Project in Northern Tunisia.

The project has a conceptual target of 80 to 120 million tonnes at 17-22% phosphate (P2O5). The PFS is targeting a high grade, low cost stage 1 mine development - targeting mine production by the end of 2013.

A number of investors have been active in Celamin with institutions having already acquired some significant stakes, highlighted by Commonwealth Bank (ASX: CBA) recently boosting its stake to over 6%. While Lion Selection Group (NSX: LGP) now holds 14.6% - after increasing its interest several times in 2011.

The PFS will be presented to Celamin, as well as Celamin’s partner in the Project, Tunisian Mining Services for review and comment. Once these reviews have been completed, Celamin will announce the results of the study to the market.


Pre Feasibility Study deliverables

The PFS will deliver a JORC Resource for the project, and establish the basis of a development concept using current best practice approaches to deposits of this type.

Other major deliverables include:

- Identify any environmental or technical obstacles to development, ‘fatal flaws’ of the project;
- Estimate the costs of developing and operating the project;
- Determine the financial feasibility of the project, and the main drivers of the financial performance of the project;
- Identify the project risks; and
- Identify opportunities for value enhancement to the project that warrant further study.


Development strategy

Celamin said today the strategy for development envisaged following completion of the Pre Feasibility Study is to continue into the Definitive Feasibility Study in two stages.

Interim (Delineation) Phase:

Delineation of sufficient resource in JORC categories that warrants commencement of the engineering of the Definitive Feasibility Study commencing.

This program will comprise further drilling, metallurgical work, resource modeling as well as mine planning and further environmental studies. In parallel with this early engineering works particularly associated with transportation may be required.

Engineering Study Phase:

Once a JORC resource has been delineated, the Engineering Study phase will commence for the development of the project and to establish cost estimate criteria with a accuracy confidence level of ± 15%.


Off-take update

The MOU between Celamin, Tunisian Mining Services and the IFC has now lapsed following Celamin and Tunisian Mining Services asking the IFC to withdraw from the project.

The IFC had contributed approximately EUR 930,000 to the cost of the PFS. Celamin has no obligation to reimburse these funds. Significantly, Celamin’s interest in the Bir El Afou project will now increase from 37.5% to 50%.

Celamin is now free to negotiate with other potential partners with the objective of reaching an agreement on potentially more favourable terms now that the Bir El Afou phosphate project has advanced from the scope set at the time of the original IFC negotiations.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/20447/celamin-holdings-edges-closer-to-delivering-pfs-on-phosphate-project-20447.html