AMN - ZAMBIA: JV targets Kabwe surface dumps

Jubilee Platinum is forming a joint venture with BMR Group to target the recovery of lead, zinc and vanadium from historical surface mine tailings and discards at the Kabwe project in Zambia. The JV will recover the minerals from an estimated 3.2 million JORC compliant tonnes of surface assets.

Under the agreement, a joint venture company will be established called Kabwe Operations which will be assigned all intellectual property developed for the execution of the project as well as the right to fund and execute the project on behalf of BMR.

Kabwe Operations will be appointed operator of the project, with responsibility for commissioning, funding, construction and operations of the project. Kabwe Operations will sub-contract operator responsibilities to Jubilee.

Jubilee is offered the right to earn into Kabwe Operations through staged debt funding. The earn-in interest will be through preferred shares issued in Kabwe Operations.

All historical mine activities have been suspended offering the project unencumbered access to existing infrastructure.

The partnership will pool resources of both companies to bring the project to account. The JV will finance and execute the approved works program with commercial production of lead and zinc expected in 2018.

Jubilee’s CEO Leon Coetzer said, “I am delighted to announce that we have successfully secured access to this exciting surface project that extends our reach beyond the South African bushveld complex and into other commodities. This transaction is in line with our mission to take our brand and expertise across country borders and commodities. This project is meaningful in scope, diversity and potential contribution to the company's earnings.

“The Kabwe project offers immediate unencumbered access to a large surface stock rich in lead, zinc and vanadium created from historical mining and processing activities. The project benefits from existing infrastructure including power, water and building infrastructure, which significantly reduces the required project capital and shortens the implementation time line.

“The Jubilee team's expertise and ability is perfectly suited to the project and strongly complements the existing BMR project team to extract maximum value from the metals contained in the various surface discards and I look forward to working with the BMR team to bring this project into being.

“In entering into this agreement, we are acutely aware of the significant further opportunities presented within Zambia and will be actively exploring these opportunities.”

The Kabwe mine was discovered in 1902 and commenced operations in 1904, reaching full-scale production in 1906. It officially closed on June 3, 1994 due to its operations becoming uneconomic at that time. The site was placed under care and maintenance by the national mining company, The Zambian Consolidated Copper Mines (ZCCM).

For 88 years of continuous operation until final closure in 1994, Kabwe was regarded as one of the famous mines in Africa and held a key position of national economic importance.

The above-ground dumps of mineral-rich tailings, slag and waste left onsite during the mining years are still in place.

A large project conducted by the World Bank and the Nordic Development Fund commenced in 2005 for the environmental rehabilitation of the Kabwe mine area and is ongoing.

On closure of the operations, much of the site area and plant infrastructure was sold in discrete lots to private investors, with the overall responsibility for decommissioning and rehabilitation of the sites retained by ZCCM. In recent years, the ownership of the Kabwe complex has been rationalised and since 2008 has been steadily acquired by BMR which now owns all the surface rights over the 705 hectare site.

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