Celamin Holdings (ASX: CNL) substantial shareholder Lion Selection Group appears very impressed by the African phosphate play, and has increased its stake in Celamin for the second time this month.
Lion Selection now holds 14.55% of Celamin, after an on-market purchase of 750,000 shares at $0.42 for a consideration of $315,945.
What Celamin offers is the potential for cash flow in the medium term, due to having a phosphate off-take and marketing agreement with a major international fertiliser company, which is being progressed into a full agreement.
Better still, the agreement is for all production to be taken from the project at market price.
Celamin owns 80% of two phosphate exploration permits and base metals projects in Algeria and Tunisia.
The African permits cover phosphate deposits with identified target potential estimated from previous exploration and mining at 230-320 million tonnes at 17-22% phosphate.
The Bir El Afou Phosphate project in Tunisia is the immediate focus, located in north west of the country with easy access to roads leading to Mediterranean ports.
The exploration target at Bir El Afou is 80-120 million tonnes at 17-22% phosphate (P2O5).
The stage 1 production target is; 1.5 million tonnes annually of +32% P2O5 (+70% BPL), with the resource target potential; 23-27 million tonnes of 17-22% P2O5 run-of-mine.
The company is targeting first production by the end of 2013. The Pre-Feasibility Study is estimated to take about 12-15 months at a budget of $1.5 million, with the Feasibility Study forecast to take about 12-18 months at a budget of $4.5 million.
Total development is expected to take 12-15 months at a budget of US$45 million plus working capital. The EBITDA target is for US$50 million per annum.