Braemore Resources Plc (BRR)
Braemore Resources Plc wishes to update its shareholders on the progress of both its nickel and platinum operations in recent months. Braemore’s management remains committed to establishing the Company as a mid-tier metal producer and a number of key milestones of its “mine-to-metal” business strategy have been achieved.
Given current market conditions, it is understandable that this progress has not been fully appreciated. The recent fall in commodity prices to historic levels represents a necessary correction after sentiment and speculation drove commodity prices, and with them share markets, to unsustainable highs earlier in the year.
Operating amid these volatile market conditions is challenging for large and small mining companies alike and Braemore is cognisant of the need to reassure shareholders of the Company’s ability to maintain its operations and development work.
Braemore would highlight the following developments:
o Bankable feasibility study for 10MW smelter completed
The BFS has been completed and the results support Braemore’s vision of building the first commercial smelter utilising ConRoast technology. The 10MW smelting facility will be suitably sized to handle identified sources of low-grade PGM, low sulphur and high chrome content feedstocks.
There are substantial economies of scale gained by the 10MW smelting complex, which can treat up to 80ktpa of concentrate. Even at 10MW, the operating costs are comparable with a significantly larger traditional smelting complex, again supporting the scalability and cost effectiveness of the facility. This is due to the simple design of the smelter complex which requires fewer unit steps to provide the feed to the hydrometallurgical plant and also results in lower power consumption per tonne of concentrate compared with the conventional smelting process.
The comparative capital costs show a considerable reduction when compared with a traditional smelting facility, confirming previously stated independent reviews that the technology offers a 30% reduction in capital requirements for an equivalent facility using conventional smelting technology.
o Establishing a fully-commercialised, independent smelting facility for the PGM industry
As announced on 10 September, Braemore has successfully upgraded its demonstration facility at Mintek with the installation of a new 3.2MW smelter capable of processing around 2000 tonnes per month. With the appointment of Dr Mathews Phosa as Chairman, Braemore is poised to accelerate the establishment of the 10MW facility through a Black Economic Empowerment transaction that will bring on board a partner in the beneficiation process.
o Key relationships concerning off-take agreements established
Both the nickel and platinum divisions are supported by solid relationships with regard to off-take agreements. The confidential nature of these agreements means that Braemore may be precluded from disclosing the parties involved, but Braemore can confirm that the increased capacity for the upgraded facility has successfully been contracted to various PGM producers and the Company hopes to announce details of these arrangements in the coming months.
o Corporate restructuring
Braemore has initiated various operational restructuring initiatives to further streamline its businesses and focus the corporate and operational teams on key business objectives, the benefits of which are already accruing.
o Braemore Nickel progress
In view of the current market environment, the fundamentals of the nickel business are being rigorously tested. Discussions with BHP Billiton regarding the way forward for the Leinster nickel project are ongoing and Braemore will keep shareholders informed of material developments.
o JSE listing and liquidity
The South African shareholder base has access to only 10% of the company’s share capital via Braemore’s JSE listing, hence the tight liquidity and unaligned share price movements with the AIM listing. Braemore is aware of this situation and reiterates that the JSE listing was undertaken to facilitate the BEE transaction currently being negotiated and thereafter to access South African capital.
In summary, Leon Coetzer, CEO, said:
“We remain committed to our long-term objectives and, despite a tougher operating environment, we are confident that we have the people and the agreements in place to deliver value to all our stakeholders.”