Manganese prices remain at US$2,300 per tonne.
https://www.proactiveinvestors.com.au/companies/news/44922/kaboko-mining-hits-guidance-with-55-manganese-grade-at-mansa-44922.html
Kaboko Mining hits guidance with 55% manganese grade at Mansa
Thursday, June 27, 2013 by
Bevis Yeo 
Commercial scale mining at Mansa
(ASX: KAB) has extracted in June an estimated 6,000 tons of high grade 55% manganese ore from the main vein at its Mansa project in Zambia as commercial scale mining moves into full swing.
Significantly, while this achieved the target set in May, it also exceeded expectations as the much wider main vein reef of about 7 metres led to higher ore recoveries.
Also exceeding expectations is the manganese mineralisation of the overburden.
Full CIF costs (production and logistics) are also line with previous estimates of $190-$210 per tonne made by independent consultant Mincon. Manganese prices remain at US$2,300 per tonne.
“We are extremely excited as we have achieved the target set in May and the initial indications are that we will be able to continue our production of 5,000tpm of main vein production in line with budgeted costs,” chief executive officer Tokkas Van Heerden said.
“Where we have exceeded expectations is with the manganese mineralisation of the overburden and the much wider main vein reef than previously targeted.”
Kaboko is also concluding first commercial sale arrangements with key offtake partner Noble Group, Asia’s largest diversified commodities trading company, for July 2013 sales.
In addition to current production activities, drilling will commence in mid-July with the objective of testing further manganese outcrops and establishing a maiden JORC resource scheduled for the third quarter of 2013 while completion of project infrastructure is expected by the fourth quarter of 2013.
Overburden offers potential to reduce production costs
Kaboko has confirmed the overburden at its Mansa project in Zambia contains substantial manganese mineralisation with testing demonstrating that its manganese content can be processed as fines with a 20% recovery to produce a 50% plus product.
Importantly, while processing of the “potato” manganese in the overburden was not previously part of the short term mining plan, it is expected to decrease overall production costs of manganese ore from the main vein and produce an additional 3,000 tons of sellable ore a month taking targeted production to 8,000 tonnes per month by the fourth quarter of 2013.
Currently the stockpile of these unprocessed fines is around 6,450 cubic meters.
Mansa Mining
Mining operations at Mansa have removed an initial overburden of 8,000 cubic meters to extract the 6,000 tons of high grade manganese ore.
The main vein ore is currently on site in a stockpile waiting to be crushed with the arrival of Kaboko’s crusher plant purchased from SBM in China.
The plant is scheduled to be erected and operational by mid July 2013. The main stockpile was tested at the Company’s on site laboratory and through independent geo chemical analysis.
Production is expected to ramp up to 10,000tpm by the fourth quarter of this year or first quarter of 2014.
Noble offtake
Kaboko has received a US$4 million advance under Tranche A of the US$10 million Prepayment Debt Facility and long term manganese ore Off-Take Agreement with Noble Resources, a wholly-owned subsidiary of Noble Group.
Under Tranche B, an advance of US$4 million will be provided upon delivery by Kaboko of 105,000 tonnes of manganese ore under the 10 year Manganese ore off take agreement.
In addition to the $10 million Prepayment Facility, Kaboko and Noble have also entered into a manganese ore off-take agreement, under which the company will deliver to Noble 180,000 DMT per year of 48% manganese lump ore from its Zambian projects.
Analysis
The strong recovery of high grade 55% manganese ore highlights the attractiveness of ’s Mansa project that is reinforced by full CIF costs remaining in line with previous estimates of $190-$210 per tonne.
In addition, the discovery of significant amounts of “potato” manganese in the overburden that can be recovered and its potential to decrease overall production costs is yet another positive for the project.
With final commercial sale agreements with Noble Group imminent, the company’s current market capitalisation of $3.11 million offers investors a window.