X-ray transmission (XRT) sorting technology could be key to unlocking value at Premier African Minerals' (LON:PREM) flagship RHA tungsten project, reckons Shore Capital.
The broker visited the project in Zimbabwe last month and came away with the belief that XRT would facilitate production at attractive margins even in the current price environment.
“We therefore advocate temporarily putting production on hold until an XRT unit can be installed,” Shore's Yuen Low said.
According to Premier, initial XRT test work has “demonstrated excellent capability in recognition of mineralised ore”, and the company has noted potential for “significant grade improvement” of run-of-mine (ROM) ore, which could “substantially increase the available resource and reduce operating costs”, with particular emphasis on the open pit.
The broker's “guesstimate” is that a sorter could be in place within six to nine months of a decision being made to purchase one.
The purchase price would be around US$1mln, but Premier might opt for a toll processing agreement, i.e. a pay-as-you-go leasing arrangement.
“Such an agreement would render the installation cost essentially negligible, we believe. The likely trade-off would be higher unit opex, although we expect that this would still represent a significant improvement over opex-sans-XRT.