Elemental Royalties Acquires Royalties On Kwale And Panton Sill Projects
February 27, 2017
Elemental Royalties Acquires Royalties on Kwale and Panton Sill projects
Elemental Royalties Limited, (“Elemental”), a private company expanding a diversified portfolio of mineral royalties, is pleased to announce that it has completed the acquisition of a 0.25% gross royalty revenue (GRR) royalty on the Kwale minerals sands mine in Kenya (the ‘Kwale’ royalty) and a 0.5% net smelter return (NSR) royalty on the Panton Sill PGM project in Australia (the ‘Panton’ royalty).
- First producing royalty acquired over top quartile Kwale mineral sands mine operated by Base Resources in Kenya
- Base royalty syndicated with a specialist mining PE fund allowing the deal to be closed swiftly
- Panton royalty adds significant exploration potential to the portfolio at an attractive price from an established operator
Kwale Mineral Sands:
The open pit Kwale mine is located in Kenya 10km inland and 50km south of Mombasa, the principal port for East Africa. Kwale was acquired by Base Resources Limited (ASX & AIM: BSE) in 2010 and following a feasibility study and financing commenced production 2013.
At the date of acquisition the Kwale Mineral Resources are estimated to be 134.6Mt at an average heavy mineral grade of 4.2% and 26% slimes containing 5.62Mt HM, based on a 1% HM cut-off grade. Further detail is contained within the table below.
The Kwale mine produces ilmenite, rutile and zircon using hydraulic mining feeding a wet concentrator plant. The resulting mineral concentrate is then processed to clean and separate the ilmenite, rutile and zircon minerals using combination of attritioning, electrostatic separation, magnetic separation, classification and gravity separation. The ilmenite and majority of the rutile is then transported to Base’s Likoni Port facility, with the balance of the rutile and all of the zircon transported to the main Mombasa port in containers. The operation is currently produces more than 90ktpa of rutile, 400ktpa of ilmenite and 30ktpa of zircon, making Base a significant producer of mineral sands products.
Elemental anticipates a mine life of at least 6 years and estimates net annual royalty revenues of approximately US$0.35M.
The Panton project is located is located about 60km north of Halls Creek, adjacent to the Great Northern Highway in the East Kimberley region of Western Australia. Panton was bought by Panoramic Resources Ltd (ASX: PAN) from Platinum Australia Limited in 2012 and has a Resource of 14.3Mt at 2.19g/t Pt, 2.39g/t Pd, 0.31g/t Au (~2Moz contained Pt+Pd) and consists of high grade platinum and palladium mineralisation within a number of stratiform reefs.
The Panton intrusive is a layered mafic to ultramafic body that has been folded into a south westerly plunging structure some 10km long and 3km wide with high grade PGM mineralisation hosted within a number of stratiform chromite reefs within the sequence.
The close proximity of Panton to the Savannah project, also operated by Panoramic, offers a number of potential capital and operating synergies which could substantially improve the project economics. It is estimated that production will begin in 2020-25, with 600ktpa of ore produced for 12yrs, resulting in annual metal production of 83kOz for three metals.
Recent sustained palladium price increases have increased the value of the Panton ore, leading the operator to fund investigations of processing options, as well as considering sorting technologies to better obtain value from the chromite. Once the Savannah operation is successfully restarted the Panton project could become central to Panoramic’s vision of becoming a regional mining hub.
Annual revenues cannot be estimated as the project is at a feasibility stage.
For further information please visit the Panoramic Resources website.
Frederick Bell, Managing Director, commented:
“Elemental is very pleased to have completed the acquisition of our first producing royalty over a high-quality operating mineral sands mine. Kwale sits in the top quartile of minerals sands operators based on revenue to cash costs and has strong margins, even in weak pricing environments. The acquisition was syndicated with a mining PE fund allowing us to move quickly while maintaining our objective of building a diversified portfolio of mining royalties.
“The Panton royalty that we simultaneously acquired represents a small investment with significant upside should the project be developed by its current owners, Panoramic Resources Ltd. Panoramic operate the nearby Savannah nickel sulphide mine in West Australia and the combination of an attractive acquisition price, credible operator and established resource in a secure jurisdiction made Panton an appealing addition.”
About Elemental Royalties Limited
Elemental is a private company providing investors with exposure to a dividend-paying royalty company building a diverse portfolio of mining royalties, benefiting from ongoing royalty revenue, future exploration upside and low operating costs.
Since early 2017 Elemental has assembled a portfolio of five royalties over seven commodities in four countries, four of which cover producing mines. Immediate cash-flow has enabled the Company to limit dilutive fund-raisings to facilitate royalty acquisitions, and to pay a dividend from inception.
Elemental’s focus remains on securing royalties over advanced assets with established operators and credible counter-parties from a robust pipeline of potential royalty acquisitions across commodities and geographies.
For further information you are invited to visit the Company’s website www.elementalroyalties.com or contact:
|Elemental Royalties Limited|
|T: +44 (0)203 983 7040|
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