Minbos Resources: Scoping Study at Cacata highlights premium phosphate product and robust economics

Minbos Resources (ASX: MNB) has received a very positive outcome from the Scoping Study conducted by CRU Strategies at the Cacata project, which is hosted within the company’s Cabinda project area in the Republic of Angola.

Importantly - the study confirmed that the resource will be able to support a large scale phosphate rock complex of around 1.5 million tonnes annually for in excess of 10 years.

The Cacata deposit is likely to be mined using open-pit mining and a conventional beneficiated process to produce a relatively high grade of 35% P2O5, and can then be marketed as direct shipping ore.

This high grade product will be considered premium product, with relatively low levels of the more problematic impurities, and therefore has the potential to open the project up to the entire world market for traded phosphate rock.

Peter Richards, executive chairman, commented on the positive study results, and said "The scoping study highlights that the required capital expenditure and operating costs remain at the low end of the industry range for comparable scale projects and has the potential to produce a premium product which all make for potentially very robust economics.

“Going forward Minbos now has this high grade project in the development stage, supported by additional significant tonnages within its Cabinda licences, the potential of a similarly robust project at its 100% owned Kanzi prospect in the DRC, and now complemented by our potential potash project located immediately adjacent and under our Cabinda licence.

"Minbos is very well positioned to capitalise on the increasing demand for fertilisers as it aims to be a supplier to the world fertiliser market.”

Cacata is expected to be mined using open pit mining methods and a conventional beneficiated process including size classification / attrition scrubbing, wet screening and desliming at 106 microns.

The project contains an Indicated Resource of 33.9 million tonnes with average phosphate content of 15.75%, including 22.5 million tonnes at 21.4% P2O5, and is located in the northeast of the Cabinda Province in the Republic of Angola, and bound to the north by the Republic of Congo.


Cacata phosphate a premium product

Ticking another box for Cacata, is that the high grade rock phosphate could be expected to trade at a 9% premium to benchmark 72% BPL Moroccan product (33% P2O5), primarily on the basis of the higher phosphate content, according to Minbos.

The outcome is that this would equate to $220/t based on October 2011 prices.

Another plus is operating costs are expected to average around US$46 per tonne, which is in the mid to low end of the industry cost curve, and even raises the possibility of the operation in the first quartile of the industry cost curve.

Capital expenditure is expected to be of the order of US$102 million (with a range of US$72 to US$132 million) and considered to be at the low end of the industry range.


Supplementary resource

Another plus for Mindos is that there is the potential to supplement the Cacata resource from the nearby Chivovo deposit.

Chivovo deposit which contains relatively high grades of between 28-34% P2O5. In addition, the mineralogy at Chivovo is similar to Cacata and therefore should be amendable to limited beneficiation as has been shown for Cacata.


Transportation of product

The rock phosphate product is most likely to be transported on a newly-constructed fully tarred road to the coastal port town of Cacongo, 80 kilometres from the Cacata deposit.

Utilising this port would require the construction of a new jetty to load low draught 5,000 tonne barges, which in turn could load larger bulk vessels (e.g. Panamax) which would be anchored approximately 1km offshore.

Whilst transloading barges to move product a short distance to larger ocean-going vessels will add time and cost to the loading process, it is practiced elsewhere in the world for a variety of bulk commodities.

Originally published at : http://www.proactiveinvestors.com.au/companies/news/20984/minbos-resources-scoping-study-at-cacata-highlights-premium-phosphate-product-and-robust-economics-20984.html