The Phosco project covers two phosphate exploration projects in South Africa, namely Duyker Eiland and Phillips Kraal in the Western Cape (see maps on left sidebar). Exploration drilling has been completed on Duyker Eiland and Phillips Kraal. Resource definition on Duyker Eiland has been completed and an NI43-101 compliant resource report has been compiled by an independent consultant, AMEC.
The most advanced project, Duyker Eiland, is located 30 kilometers north of the Port of Saldanha, in the Western Cape Province of South Africa.
The phosphate deposits are located around Saldanha Bay in the Western Cape, and more detailed studies were conducted in the early 1900's. A phosphate deposit was mined until recent years by Samancor at Langebaanweg, about 25 km southeast of the Duyker Eiland property, 12 km east of Phillips Kraal. This phosphate was sold for direct use as fertiliser, with some upgrading done by mixing with other components, such as ammonium sulphate.
The Duyker Eiland project area has historical prospecting results of approximately 30Mt of phosphatic sands. In the 1940's and 1950's, AMCOR conducted mineral exploration on the property, however these records have been lost. During the 1960's, African Explosives and Chemical Industries Limited (AECI) conducted drilling and pitting on a 3.0 km by 0.5 km area extending over the property. AECI conducted flotation tests and obtained a concentrate with 33.0 % P2O5 (87 % collophane). These estimation and flotation results are historical in nature, and do not comply with NI 43-101 definitions. Historical prospecting results are also published for the area of the Phillips Kraal project though the records have also been lost.
The regional geology is marked by the presence of Tertiary/Quaternary sediments consisting of calcareous and aeolian sands, calcretes and phoscretes.
At Duyker Eiland, a portion of the Vredenburg granitic pluton is overlain by sediments of the Varswater formation, which is part of the Miocene-Pliocene Sandveld group, and limestones and calcarenites of the Pleistocene Langebaan formation.
Sands, clayey sands and gravels of the phosphate-bearing Varswater formation sediments are partially overlain by limestones of the Langebaan Formation, which is exposed on top and along the shoulders of the small hill that dominates the topography of the area. The phosphate mineralization occurs as rounded and sub-rounded,polished collophane grains. A similar geologic setting is observed at the Phillips Kraal project. Desktop studies indicate that historic targets at Lamberts Bay also occur in the Varswater Formation. The Bierkraal project area is located in an apatite rich layer of the Bushveld Igneous Complex.
The initial exploration program included, the compilation of the historic data, desktop studies, field visits and mapping and was followed by RC/Aircore drilling at Duyker Eiland and at Phillips Kraal during the 2011 exploration campaign.
In late 2011, the Initial Inferred Mineral Resource of 32.8 M tonnes grading 7.15% P2O5, at the Duyker Eiland property was announced. This resource is capable of producing an acid-grade phosphate concentrate of 33% to 35% P2O5 (see news release 16/11/2011) Click the title to download and view the N1 43-101 Resource Estimate.
Preliminary Economic Assessment
An independent NI43-101 compliant PEA has been completed by Turgis Consulting on the Duyker Eiland Phosphate Project in South Africa. Positive results and highlights are as follows:
· A NPV of CAD$ 126.1 million (at a discount rate of 10%) and an IRR of 38.14%
· Average 4.5 million tonnes per annum rock mined at low stripping ratios of 0.57:1
· Average production of 490,000 tonnes per annum of 33% P2O5 concentrate
· 11 year Life of Mine (based on initial resource estimate)
· Operating cash costs CAD$ 109 per tonne concentrate Free alongside Ship ("FAS") at the port of Saldanha, South Africa
· Capital costs of CAD$ 132 million
Click the title to download and view the N1 43-101 Compliant PEA.