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Bushveld Minerals says near surface portion of South African project has 'free-dig' potential

Last updated: 11:15 27 Mar 2013 GMT, First published: 12:15 27 Mar 2013 GMT

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The latest results from Bushveld Minerals (LON:BMN) point to a portion of its flagship South African iron ore project as having free dig potential, meaning it will be lower cost to extract.

The near-surface, weathered portion of the P-Q Zone is estimated to contain 38 million tonnes of titanium-magnetite.

The update follows a 1,038 metre drilling programme to assess the potential of this weathered area. Recoveries are put at 86% at a grade of 53% iron.

Chief executive Fortune Mojapelo added: "More than providing better definition of the outcrop zone of the Bushveld Iron Ore project, the potential of the weathered resource lies in its lower free-dig mining cost proposition.

“The size of this resource, at 38 million tonnes in the indicated resource category, vindicates our efforts to proceed with metallurgical test work, whose results demonstrate high recoveries for a good quality concentrate product."

Bushveld also revealed the total tonnage of the P-Q Zone has decreased to 716 mln tonnes from 752 mln.

The slight change is to be expected, it said, owing to the lower density of the weathered zone, and better definition of P-Q Zone at shallow depths.

Broker Ambrian said titanium-rich iron ore concentrate production from magnetite in South Africa "seemed somewhat farfetched to us”.

“However, we are coming round to the idea given: the flow sheet is likely to require minimal power (ie, no grinding); the project is close and has access to rail with spare capacity (and likewise at port) and — the clincher — the high titanium content product can be sold to Chinese steel mills (according to independent marketing commissioned by Bushveld)," it added.

Ambrian also said the test-work has identified “further optionality” to reduce costs and increase the economics of the project.

“[It] effectively complements the proposed crush-screen-magnetic separation flow sheet under consideration for the fresh and massive ore body that sits below this weathered zone,” the broker went on. 

“It is a promising additional option that warrants further investigation.”

At 12.15pm, the shares were off 0.62 pence at 12 pence each.

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on 12/5/23