SOLID RESOURCE Core Mining’s Avima project aims to produce 35-million tonnes a year of high-grade shipping ore over the 25-year life-of-mine
Despite the logistics challenges of iron-ore developer Core Mining’s Avima project, in the Republic of Congo, a two-phased infrastructure plan has been finalised to allow for iron-ore to be exported from Avima in late 2015 or early 2016,said the company CEO Socrates Vasiliades .
The remote and landlocked Avima project is located in the north-western Sangha region, bordering Gabon and Cameroon. Access to the project is through a purpose-built 62-km-long all-weather road, which services the site and provides easy access for drill rigs and other equipment.
Core Mining is focusing its exploration activity on Mount Avima, a mineralised ridge of about 35 km in strike length, which rises 200 m to 900 m above sea level. The project’s current resource is estimated at 580-million tonnes, with an iron-ore content of 60%, or 420-million tonnes with an iron content of 63%, he adds.
Additional target mineralisation is between 395-million tonnes and 540-million tonnes, while between 200-million tonnes and 240-million tonnes has been identified as high-grade direct shipping ore with an iron range of 55% to 62% within the target area.
Avima is expected to produce 35-million tonnes a year of high-grade shipping ore over the 25-year life-of-mine, for which Core Mining has designed a two-phased infrastructure plan.
Phase 1, worth about $100-million, will comprise a road and rail network from the mine site to port, with about 200 km of new-build road as well as use of existing road and rail networks in Gabon.
“Core Mining expects to start ramping up Phase 1 of the infrastructure plan imminently. “This ramping-up phase will involve engaging with contractors, building the road from Avima, preparing the mine site and constructing the mine itself,” Vasiliades said.
Phase 1 will enable Core Mining to initially ship three-million tonnes a year by barging the ore up the Komo river to the Gabon estuary.
Vasiliades said that Phase 1 is on track. “Construction and implementation of the first phase is estimated to last about 14 months.”
Phase 2 of the project, worth an estimated $4-billion, will involve port and rail infrastructure (PRI) that will have a capacity of between 90-million and 100-million tonnes a year. This will include a 600 km rail line from Avima to Port Mandji. During Phase 2, Core expects to produce and export 35-million tonnes a year, Vasiliades said.
“We intend for the PRI to become the backbone of the mining industry in that region, servicing not only Avima but also the other projects in that landlocked area, and in particular the Belinga iron-ore project in Gabon.”
A Bankable Project
Citing the high-grade ore and the sheer quantity of the Avima deposit, Vasiliades believes the project has “every reason to be one of the most successful iron-ore projects in Africa”, as it is “one of the largest high-grade, low-cash cost deposits on the continent”.
He also highlights the company’s solid relationship with the Congo government as another key factor contributing to the project’s success.
“The outlook is bright despite the current conditions, as there is still demand for high-quality iron-ore,” Vasiliades added.
The company has adjusted its project strategies amid the current depressed equity and commodity market and, although the current iron-ore price would reduce the potential profit margin of Avima, Core Mining maintains that phases 1 and 2 of the project are still feasible, as it will deliver DSO with 63% iron, which will still attract a premium, he notes.
Vasiliades further emphasises the Congo government’s investment in the Avima iron-ore project through its 15% acquisition in April of the share capital of the Congolese limited liability company Avima Fer Congo SA, which owns the Avima iron-ore project.
“This government investment is in addition to the mandatory 10% free carry participation by virtue of the Congolese Mining Code, providing the Congolese government with a total share in the Avima project of 25%.” Vasiliades added that this investment formalises the good relationship and seals the partnership between Core Mining and the Congolese government.
“It is important that mining companies and governments work together to ensure that the projects developed in a certain region benefit all the parties.
“The Congo is a country that is developing its mining industry after decades of dependency on oil and gas. Government’s recent investment illustrates its seriousness about developing the mining industry and working closely with the mining companies,” Vasiliades concluded.