admin on 22 May, 2010 04:12:00
 
When the Sabodala Gold Operation, located 650 kilometres east of Dakar in
Senegal, West Africa, achieved its first gold pour back in March 2009, the big
buzz around owners Mineral Deposits Limited (MDL) kicked off. The interesting
part about it all is that this interest has been ongoing ever since.
MDL is an ASX and TSX-listed miner currently focusing on Senegal, West Africa,
and that’s where the reason behind the ongoing flurry of attention around
it is revealed. Yes, Sabodala is an impressive and successful project, but it is
not MDL’s only draw. This company has another project, the Grande
Côte Mineral Sands Project; a project with impressive tier 1 aspects, the
only new project of this type in the world and one which is poised to hit the
market at a point of supply deficit.
IRJ spoke with Nicholas Limb, MDL’s Executive Chairman, to hear more about
how the company began, altered, conquered and now braces itself for development
of its world-class mineral sands project.
Placing MDL
Limb explains that MDL originates under the control of BHP Billiton, the mining
major who owned it for many years. In 1997, a small public company, of which
Limb was Chairman, bought MDL from BHP thus making it a public company again. At
this time, MDL was operating a number of mineral sands mines on the East Coast
of Australia, north of Sydney.
“We continued to run those mines until the end of 2003 when the creep of
national parks made it impossible to continue and we recognised that that was
coming so we set about looking around the world for a place we could transfer
those expertise,” Limb recalls.
“That ultimately took us to Senegal where we recognised the mineral sands
project which had most of the characteristics that we had in the Australian
context; a similar sort of ore body where we could transfer most of the
expertise.”
Once in Senegal, MDL spotted the gold business opportunity there just as the
industry was opening up. With first-mover advantage on its side, MDL was soon
granted the Sabodala Gold project in the new mining area of the Birimian
geological belt.
“Subsequently we turned that into a fairly large ore body. At that stage
we were progressing both projects, then early in 2008, we began our construction
of the gold project,” Limb says. “We then completed construction of
the gold project and brought that into production and we’re about over a
year into production now.”
Prior to constructing Sabodala, MDL had intended to focus on Grande Côte
first. As strategic decisions owing to available human resources and market
opportunity were made, this mineral sands project was deferred. Until now.
“In the last six or eight months we’ve circled back, redone the
feasibility study for the Grande Côte project and we’re moving into
the financing phase with the hope that we can begin construction at the end of
the year,” Limb says.
With Sabodala well and truly reported on by the industry (after all, it did
produce 175,000 ounces within its first year of production), now is the time to
shift attention to the exciting developments at Grande Côte.
Grande Côte: Economical tier 1 potential
Grande Côte, located 100 kilometres to the Mauritanian border, is the
coastline north of Dakar, a beach no less.
“Behind that beach, about three kilometres inland, you have a white sand
dune system, which is beach sand blown up into sand dunes for the entire
length,” Limb says. “Those sand dunes contain about two per cent of
valuable heavy minerals which consist principally of ilmenite, the titanium
mineral, and zircon.”
Limb adds that the initial attraction to Grande Côte sparked from its ore
body’s geological similarity to those that the company had mined
historically back in Australia, allowing for better understanding of how exactly
to make it a viable project.
“Subsequently, we’ve spend in excess of $100 million drilling the
project, many years of pilot studies, bulk samples, extensive hydrology,
extensive environmental and social studies – all of those things that you
need,” he says.
“At the same time we’ve done a complete detailed engineering for the
project, signed a fiscal stabilisation agreement with the government and we have
received all of the environmental and other permits. The project is now in a
position to begin construction and we’re about to release the Definitive
Feasibility Study (DFS).”
All things above considered, it looks like MDL is set to confirm an extremely
robust project, not least with its tier 1 characteristics.
“Those tier 1 characteristics have a very long mine life–in excess
of 25 years and as much as 40 years,” Limb says.
“It will operate towards the bottom of the cost curve because it’s a
large dredging operation in free-running sands with no significant vegetation or
clay in the sand system and on essentially unpopulated dunes.”
Grande Côte will produce approximately seven per cent of the world’s
zircon, which from customer trials will also be the highest quality zircon in
the world, largely due to extremely low levels of uranium and thorium. It also
has no overburden and it has a shallow water table which supports very
large-scale dredging.
“It’ll have a capital cost of US$400 million and as I say
we’re in the financing phase and we’re now publically saying that
rather than being developed within the public company, the project will be the
subject of a spin-out by way of an IPO,” Limb says. “Certainly the
equity component of the project will be raised in that spin-out.”
Certainly, doing so will deliver truly world-class results.
MDL and the year ahead
The company has an awful lot going on with Grande Côte, yet that
doesn’t mean it has forgotten Sabodala by any means.
“We’ve announced separately that the gold project is being expanded
from 2.3 million tonnes to 3.5 million tonnes so we’re in the process of
beginning that expansion work and that’s a 12-month job,” Limb says.
“That will lead to production in excess of 200,000 ounces a year moving
forward.” MDL brought Sabodala into production quickly, and Limb says that
resultantly, there is plenty exploration work left for the company to do.
“We’ve been cranking that up and reinvigorating that
recently,” he explains. “That’s starting to bear substantial
fruit and we want to really bring on a number of encouraging exploration
projects this year, that’s the obvious opportunity.”
Meanwhile at Grande Côte, the aim is crystal clear as the company
continues in the financing phase today.
“The obvious thing is to complete the IPO and financing for the mineral
sands project and get that into construction,” Limb says.
“Construction and financing will be about two years on that
project.”
There is no doubt that any news from Sabodala is big news, likely to garner
plenty of attention from industry newswires and interested individuals. Perhaps
more exciting, is the fact that Grande Côte, with its tier 1
characteristics and position to meet market demand, looks likely to follow suit.
MDL is in for a big year, as both projects continue to offer unbridled potential
for further success.

May 24th, 2010
Categories: Uncategorized . Author: admin