Modern Mining January 2020

MINING News

Ministry consent secured for Kayelekera acquisition

Malawi’s Minister for Natural Resources, Energy and Mining has given Statutory Consent for Paladin Energy to divest its 85 % interest in the Kayelekera uranium project to ASX-listed Lotus Resources (previously Hylea Metals) and Lotus’s joint venture partner, Kayelekera Resources. Ministry consent follows Lotus’ announcement in June 2019 that it would acquire a 65 % interest in Kayelekera, held by Paladin subsidiary Paladin (Africa) Limited. Kayelekera Resources will acquire 20 %, with the remaining 15 % retained by the Malawi Government. Immediately after completion, Lotus plans to formulate a detailed operating strategy for the project, which produced

more than 10,9 MIb of uranium between 2009 and 2014 before Paladin placed it on care and maintenance. At the core of the strategy will be re-engineering cer- tain production and mining processes to reduce the overall capex and opex of the operation. Lotus has assembled a highly expe- rienced technical team with significant uranium experience. Several of the team were instrumental in restructuring and reducing costs at the Honeymoon uranium mine in South Australia (owned by Boss Resources). “We believe Kayelekera is a world-class uranium asset,” comments Lotus Managing Director Simon Andrew. “The mine is fully

permitted and includes significant plant and infrastructure. Kayelekera hosts a high-grade uranium resource with an existing open-pit mine and demonstrated excellent recoveries (87,5 %) while it was in production.” Kayelekera has a resource (JORC Code 2004 and NI 43-101) of 19 Mt at 700 ppm U 3 O 8 for 28,7 Mlb of contained U 3 O 8 . “Lotus believes the near-mine and regional exploration potential is signifi- cant,” says Andrew. “Numerous radiometric anomalies have been identified over the broader project region. Although sev- eral have been tested previously, targets remain open in the Mwankeja South, Livingstonia and Chilumba prospects based on untested radiometric anom- alies as well as structural targets in the Nthalire areas. “Lotus has confidence that its highly experienced team via the oper- ational review, engineering studies and resource evaluation will be able to make a positive contribution to the mining industry in Malawi for the ben- efit of all stakeholders. Lotus looks forward to building mutually beneficial relationships with the local community and the Government of Malawi.” The remaining consent required is the Contractual Consent from the Minister for Natural Resources, Energy and Mining and the Minister of Finance, Economic Planning and Development. Once this is received, the completion of the sale remains subject to customary terms and con- ditions, including Reserve Bank of Malawi approval, which is expected to follow.  immediately. This is the moment our person- nel and other stakeholders in Eritrea have been waiting for.” Danakali has also announced that CMSC has confirmed Earth Moving Worldwide (EMW) as its preferred contractor for the Colluli project mining services scope. The mining services scope covers the pre-production period (development) plus the first five years of production. It includes the provision, operation and maintenance of excavation, haulage and dewatering equip- ment. Execution of the mining services contract is expected early in 2020 and pro- duction is expected to commence in 2022. 

The processing plant at Kayelekera, which has been on care and maintenance for several years.

DRA given ‘Notice to Proceed’ on Colluli project Danakali, listed on the ASX and LSE, has announced that the Colluli Mining Share Company (CMSC) has issued a ‘Notice to Proceed’ to DRA Global, the preferred provider of Engineering, Procurement and Construction Management (EPCM) services for the Colluli Sulphate of Potash project in Eritrea. The notice is an interim agreement that allows DRA and CMSC to commence the EPCM process. Further, the CMSC board has resolved to commence EPCM phases 1 & 2. The purpose of the phased EPCM

approach is to ensure that CMSC achieves technical, commercial, financial and name- plate requirements that satisfy the economic model, funding criteria and the expectations of all stakeholders. Comments Project Director Tony Har­ rington: “I am very pleased we will be formalising our partnership with DRA after over a year of quality and positive inter- actions with their team. With the majority of project funding committed, the CMSC Owner’s Team is ready and eager to col- laborate with DRA and commence work

8  MODERN MINING  January 2020