(MENAFN- ProactiveInvestors - Australia)Â Kaboko Mining (ASX: KAB) has completed a Scoping Study confirming that the budgeted costs for production and logistics at its Mansa manganese project in Zambia, are in line with its expectations.
Independent consultant Mincon had estimated the cost of delivering a CIF product at between $190 and $210 per tonne.
Manganese prices were averaging about US$2,300 per tonne on 14 May.
Given the recent lift in manganese prices and high grade nature of the project, this is a timely positive for the company as it prepares to begin production over the coming weeks.
The Scoping Study also included an indicative manganese resource estimate and mine plan for operations based on a seven year mine life.
This is critical to the operating program and pit design, enabling Kaboko to maximise efficiency and productivity at the Mansa Project. It also allows the company to start operations.
Follow-up activity
The Scoping Study provides Kaboko with the foundation for a JORC Resource at the Mansa Project.
This will be completed following a further 24 hole drilling program totalling 1,200 metres this quarter that targets extension of the existing mineralisation zone.
Kaboko noted this is designed to confirm the Indicative Resource as well as increasing the potential resource.
It noted that the Scoping Study focused on the known mineralisation area, which represents just 2% of the 90 square kilometre area that the Mansa Project covers.
This offers the project significant upside that the company intends to continue defining through exploration while continuing operational activities currently underway to achieve first production in the current quarter.
Production plans
Kaboko had continued mine development and associated plant and equipment purchases, including the semi-mobile modular processing plant which will be used to crush and process the ore at the Mansa Project, during the March and current quarters.
The processing plant is scheduled to arrive and be installed by the end of the current quarter while development works have included clearing of overburden, completing construction of infrastructure and installation.
Following initial crushing onsite, ore from the Mansa Project will be trucked to the rail siding for further crushing and processing before being sent to port via rail.
Initial production is targeted at 5,000 tonnes per month before it is ramped up to 10,000 tonnes per month.
Analysis
The completion of the Scoping Study is timely as Kaboko Mining progresses towards the start of trial mining in the current quarter.
Besides estimating the cost of delivering a CIF product at between $190 and $210 per tonne, the Study has also set an Indicative Resource that will form the basis for the company's upcoming JORC Resource following further exploration.
Having recently secured a US$4 million advance by the Noble Group under the US$10m Secured Prepayment Debt Facility and a Manganese Ore Off-take Agreement it is all systems go for Kaboko. Its current market cap. of just $5 million not only looks undemanding but set to rise with the onset of production.
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