TSHIPI MANGANESE PROJECT
Project Overview
The Kalahari Project
The Kalahari Project is located about 20 km southwest of the mining town of Hotazel in the Kalahari Manganese Field, which constitutes a globally significant manganese resource. The Kalahari Manganese Field is approximately 400 km² in area and is estimated to contain approximately 13 billion tonnes of manganese resources at 20% to 48% Mn. Its geological simplicity makes the Kalahari Manganese Basin one of the most important manganese resources in the world.
The Kalahari Project is an advanced exploration project with a defined mineral resource estimate of 163 Mt at a grade of 37.9% Mn. Of the total resource, 62, Mt is classified as indicated resources, with the remainder classified as an inferred resource. The results of the Feasibility Study showed that the ore resources of the Kalahari Project were shallower than expected and low in phosphorus and other deleterious elements.
The elevation undertaken proposed and open pit mining operation using a standard open cast mining approach. Total run of mine ore tonnes to be produced are planned to be in the range of 2.2 Mt to 2.6 Mt of ore per annum. The Feasibility Study pit has been planned as a 24 year operation. However, the resources are expected to continue for a significant period thereafter. It is currently proposed that the mining of the open pit will be outsourced to a suitable mining contractor; all other parts of the operation will be run on an owner operator basis.
Although the Hotazel area has established road, power, rail infrastructure and water supplies, there is currently no infrastructure in place on the Kalahari Project mine site. Due to inadequate transmission and distribution infrastructure, at present no additional capacity is available to supply power to the mine. The Project’s power requirements, which are not significant, will be supplied by diesel driven generator units until power from the country’s infrastructure can be accessed.
Tshipi will also construct its own dedicated rail loading facility which will join the existing transport rail line a few kilometers from the project site. Discussions have taken place with the South African State-owned transport company with respect to obtaining a long term allocation of rail and port capacity for the export of manganese from the Kalahari Project.
The Feasibility Study confirmed that the Kalahari Project was economically robust with production costs forecast to be in the lowest industry quartile. The Feasibility Study estimated the Kalahari Project’s required capital expenditure to be approximately US$200 million and that it would take approximately a year from formal investment decision to produce the first saleable manganese ore.
According to the Feasibility Study, current capacity constraints within the South African rail and port infrastructure are identified as the principal risk to the successful realization of the Kalahari Project. Tshipi has recognised this and in seeking a solution has identified a number of options for the transport of product.
According to the Feasibility Study, the principal challenges identified for the Project relate to transport logistics and market access rather than the geology, mining and metallurgical aspects.
The Wessels Exploration Project
The Wessels Exploration Project consists of the prospecting rights over 3,965 ha, located north of HMM’sf Wessels Mine. The Wessels Exploration Project falls just outside the estimated sub outcrop of the Kalahari Manganese Field but could nevertheless contain possible high grade outsider manganese deposits. The project is close to the area where Aquila Resources is prospecting and has published an inferred resource of 1.8 mt at 45.5% mn.
There have been numerous holes drilled in the past with some intersecting high grade mineralisation at depths greater than the resources in the Kalahari Project. Tshipi is presently exploring and evaluating the exploration property for the possibility of high grade manganese deposits which might be mined by underground methods. However, currently additional drilling is required for the ore resources to be classified as an inferred resource. Drilling is expected to commence toward the end of 2010.
Project Ownership Structure
The Kalahari Manganese Basin is estimated to contain approximately 80% of world’s known economic manganese reserves. Work completed to date has confirmed the potential of the Kalahari Project as a world-class low cost manganese operation.
Jupiter Mines Limited in August 2010 acquired a 49.9% interest in Tshipi e´ Ntle Manganese (Proprietary) Mining Limited (“Tshipi”) from a group of co-Investors, of which a brief description of each follows:
- Pallinghurst: A specialist mineral resources investment company listed on the Bermuda Stock Exchange (“SBX”) and the Johannesburg Securities Exchange (“JSE”) in South Africa.
- AMCI: A leading private North American based resource company and a global investor in a wide range of mineral projects.
- EMG: A North American based private equity fund that invests in entities that acquire, develop and own energy infrastructure and natural resource based assets.
- POSCO: A Korean steel making conglomerate with interests across a wide range of industry sectors, listed on the Korean Exchange (“KRX”) and the New York Stock Exchange (“NYSE”).
- Investec. A South African based investment bank with significant operations in the UK and in Australia.
The remaining 50.1% shareholder of Tshipi is Ntsimbintle Mining (Proprietary) Limited (“Ntsimbintle”). Ntsimbintle is a Black Economic Empowerment (“BEE”) company which originally held the Mamatwan mining right and the Wessels prospecting right (the “Wessels Exploration Project”). Application has been made and approval is being sought from the South African Minister of Mineral Resources for the transfer of both properties from Ntsimbintle to Tshipi. The Kalahari Project is being established within the area covered by the Mamatwan mining right. The Wessels Exploration Project is approximately 20 km north of the Kalahari Project.
Project Location and Description
The Kalahari Project is located near the town of Hotazel in the Northern Cape Province. The project area is some 30 km north of Kathu, a town near the Sishen Iron Ore mine. The area is accessible by tarred roads. There are six active manganese mines in the KMF, namely the Mamatwan Manganese Mine and the Wessels Manganese Mine (some 25 km north of Hotazel), owned by Samancor and Black Rock, Nchwaning 2 and 3 and Gloria mines, owned by African Rainbow Minerals (“ARM”) and the United Manganese of Kalahari (“UMK”), a new mine.
Tshipi is in South Africa’s Kalahari Manganese Basin, the location of the largest sedimentary manganese deposits in the world.
Tshipi is located adjacent to the Mamatwan open pit mine which has enjoyed 45 years of continuous manganese production.
Regional Geology
The Kalahari Manganese Field is a 400 km² basin containing some 80% of the world’s economic manganese ore resources. The area is underlain by the transuaal Supergroup. At the base is a thick sequence of platform carbonates of the Campbell Rand Subgroup which in turn is overlain by the Abestos Hills and Koegas Subgroup banded iron formations. These are overlain by the Manganese Formation, a glacially derived sequence of sediments and the lavas of the Ongeluk Formation.
Overlying the Ongeluk lavas is the 140 m thick Hotazel Formation, composed of mainly banded iron formations and manganese lutites. The Mooidraai Formation limestones and dolomites conformably overlie the Hotazel Formation. These rocks are overlain by the shales, quartzites and conglomerates of the Mapedi Formation.
The Permian Dwyka Group of the Karoo Supergroup unconformably overlies the Mapedi Formation, which in turn is overlain by the Tertiary Kalahari Group, which are mainly calcretes, sand and gravels.
Kalahari Project Geology & Resources
The Kalahari Project is located at the southern part of the KMF where the sand cover of the Kalahari Group varies between 30 and 100 m. The Dwyka Group is restricted to parts of the area as is the Mooidraai Formation having been eroded away in the southern part of the area.
Schematic Cross Section (not to scale)
The Hotazel Formation, which contains the manganese and iron formations, dips at between 5° to 8° to the west. The lowermost part of the Hotazel Formation contains three manganese rich zones. The Upper Manganese Orebody (“UMO”) is about 10 to 15cm thick and is moderately mineralised.
The Middle Manganese Orebody (“MMO”) is poorly mineralized and only about 2 m thick. It is of no economic interest. The Lower Manganese Orebody (“LMO”) is the main economic unit. It contains six important mineralized units of which the lower three (i.e. M,C and N Zones) are the richest in terms of manganese content and comprise the mineral resource of the Kalahari Project.
The Wessels Prospecting Project
Ntsimbintle has the prospecting rights over 3965.2 ha on the farms Wessels and Dibiaghomo, just north of the Wessels Mine (an application has been submitted to the DMR to transfer these rights to Tshipi). While the farms do not fall within the traditionsl KMF, there is known Wessels-type mineralisation underlying the northern parts of the Wessels farm. The mineralisation extends north under the farm Lehating and Eersbegint where Aquila Resources ("Aquila" is prospecting (Acquila has published an Inferred Resource at Eersbegint of 1.8Mt at 45.5%Mn).
There have been numerous holes drilled in the past which indicate that only the LMO appears to be present at depths of approximately 350m depth. Despite several holes which have intersected the high grade mineralisation, no ore resources have been classified and hence the valuation is difficult.
Anecdotal evidence indicates a resource of between 10Mt to 15Mt of ore grading at some 45%Mn.