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UPDATE - Bushveld Minerals maiden phosphate resource larger than expected

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Bushveld Minerals (LON:BMN) has established a larger than expected maiden resource for the phosphate that overlies the iron ore at the P-Q deposit on its Bushveld Project in South Africa.

It comes in at a JORC compliant inferred 442mln tonnes at an average grade of 3.6% phosphorus pentoxide, using a cut-off of 3%.

The resource went down to a maximum depth of 400 metres an along a total strike length of 8.5km.

A scoping study, to assess the potential of the phosphate and iron ore, is expected to be completed in the third quarter. 

Chief executive Fortune Mojapelo: "We are delighted to announce the maiden JORC resource for the phosphate project of our P-Q deposit, which is larger and of better grades than we initially anticipated. 

“In the past six months, we have made progress in materially developing the phosphate resource associated with the P-Q deposit, including the discovery of the phosphate zone, the delineation of the maiden JORC-compliant phosphate resource and the completed positive metallurgical test work on this mineralisation - all of which attest to the potential of this project.

“Given the anticipated minimal mining costs of this mineral resource (by virtue of being in the hanging wall and thus constituting the overburden of the P-Q Zone), and the recently reported positive metallurgical test work results, this phosphate project has the potential to significantly enhance the economics of the overall P-Q project, the extent to which will be articulated in the phosphate scoping study underway."

RFC Ambrian in a note to clients pointed out that while the grade is relatively low, metallurgical test-work has achieved a ‘marketable’ concentrate.

And it draws parallels with Phalaborwa, the operating South African phosphate mine, which yields a 35% phosphorus pentoxide concentrate from a 7-8% head-grade using flotation.

The City broker concludes: “The delineation of a this phosphate resource within the P-Q Zone may have significant implications that could enhance the economics — which will be determined in the current scoping study — of the existing iron ore and titanium project.”

The shares were little changed at 3.99p each.

Quick facts: Bushveld Minerals Ltd

Price: 11.031 GBX

LSE:BMN
Market: LSE
Market Cap: £127.18 m
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