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UPDATE - Bushveld Minerals soars after expanding footprint

Bushveld believes extending the resource along strike adds cost-effective scalability to the modest, low-capex production plan outlined in its scoping study

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Bushveld Minerals (LON:BMN) shares jumped as it told investors it has agreed amendments to the footprint of the company's eponymous flagship project in South Africa in order to secure its rights to all of the P-Q deposit.

The Bushveld iron ore project now incorporates additional areas including the Schoonoord and Bellvue farms which were adjacent to the project's previous boundaries. It also now includes phosphate ores.

The new arrangements significantly extend the strike of the P-Q deposit, the company said, and it means work on a resource upgrade can progress.

This upgrade will be based on an accelerated drilling programme on strike extensions to the P-Q mineralisation, it explained. Findings of airborne geophysics geochemistry data and historical drilling data on the Bellevue farm will also inform the work.

Bushveld expects there will be a significant increase in JORC-compliant resources as a result, and this, it says, will further prove the scalable potential of the project. The new resource estimate is anticipated in the first quarter of this year.

Chief executive Fortune Mojapelo said: "While the scoping study announced for the P-Q project in 2013 was based on a modest operation, utilising less than 20% of the then-established resource (712Mt), the company believes that extending the resource along strike adds cost-effective scalability to the modest, low-capex production plan outlined in its scoping study.

"This supports our goal to extend and upgrade the Bushveld iron ore project resource at the P-Q deposit.

"Furthermore, the phosphate potential within the licence can now be explored, and has the potential to materially enhance the overall economics of the Bushveld iron ore project."

The upgraded resource, once complete, will in turn be incorporated into an ongoing pre-feasibility study on the Bushveld project.

"We look forward to progressing the PFS, adding to that the project's phosphate potential, and continuing to pursue all such opportunities to unlock value in line with our Bushveld group approach to developing the assets which form our commodity platforms," Mojapelo added.

The Bushveld project already benefits from an agreement with the Chinese - which sees a joint metallurgical test work programme being conducted by Beijing Huamao Lineng Technology, under the company's memorandum of understanding with China Railway and Engineering Company.

Northland Capital called it a positive acquisition, enabling the company to “add cost effective scalability to its low capex production plan outlined in its scoping study for the P-Q iron and titanium ore deposit”.

Shares leapt 21% to 5.3p each.

Quick facts: Bushveld Minerals Ltd

Price: 19.95 GBX

LSE:BMN
Market: LSE
Market Cap: £230.02 m
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