Botswana Metals Limited (BML) said it has been granted extension by the Department of Mines to three of its exploration licences for a period of two years effective from April 1, 2016.
The minerals explorer stated that the granting of the extension to PL110/94, PL111/94 and PL54/98 now allows the Joint Venture partner BCL Limited, a Botswana mining and smelting operation owned by the Botswana Government, to consider a pre-feasibility report prepared by WorleyParsons (WP) on the Maibele North resource.
“Under the agreement BCL, through its subsidiary BCL Investments (Pty) Ltd, can fund up to the completion of a bankable feasibility study (“BFS”) to earn a 70% interest in the three prospecting licences (PLs) that cover approximately 185 km of BML’s ~1,500 km exploration portfolio,” the Australian Securities Exchange listed company said.
The BCL and BML will also discuss the plans for the JV moving forward with the joint venture projects only 55 km from BCL’s nickel-copper mine, process plant and smelter. At the Maibele North, the Ni + Cu + Co + Platinum Group Elements mineralisation is similar to that being mined by BCL.
BCL has established crushing, milling, flotation and smelter plants available that can in effect “toll treat” the Joint Venture ore which should significantly reduce any capital outlay in developing the projects while also BCL has the marketing and sales team in place with international client base to sell the final product; and BCL will provide BML and the Joint Venture with the expertise, logistics and access to plant and equipment.
BCL also has a first right of refusal to fund the exploration on the balance of the BML exploration portfolio that covers the extension of the Limpopo belt into Eastern Botswana from Zimbabwe.
BCL has publicly stated that it has a policy to find business opportunities that can extend the longevity of the mining and smelting operations located at Selebi-Phikwe. BCL employs approximately 5,000 people and supports the township that has a population of around 50,000 people.
The company also owns the well-known Tati Nickel Mine that is just 80 km to the north of the BML licence areas. BML’s projects provide the potential for additional ore particularly for Nickel and Copper that can be trucked to the BCL plant which has been operating at Selebi-Phikwe since the 1960s.
Of the three BML projects, the Maibele North discovery will be the priority for potential mining.
“If the economics stack up then the time to mining and the capital, operational cost and processing of ore for a potential mining could be significantly reduced based on the fact that BCL already have infrastructure and mining facilities in place just 55 km away from BML,” BML Chairman Pat Volpe said.
“However the current weakness in global base metals including nickel could have an impact on the financial models required to justify any mining operations.”
Details on the BCL Farm-In Joint Venture BCL Investments (Pty) Limited, under the joint venture agreement, must spend an initial $4 million on a drilling program to earn 40% of the projects over these areas. BCL has the option to continue to fund the projects to the completion of a Bankable Feasibility Study (“BFS”) to earn a 70% interest.
At that point BCL will have the off-take rights, at commercial prices, to any ore mined. It is planned to truck ore to the BCL smelter operations at Selebi Phikwe for processing, which is situated 55 km to the southwest of our project. BML will retain a 30% interest after the BFS is completed at which time the management of the projects will be transferred to BCL.