[Cobalt] Nikanor seeks copper consolidation: DRC
Source: MiningMX.com
metalsplace.com
Nikanor, the AIM-listed firm developing a $1.3bn copper/cobalt mine in the Democratic Republic of Congo, wants to consolidate production in the Katanga province by toll-treating concentrate from neighbouring miners.
Nikanor raised $434m before costs in an initial public offering in July in order to start rehabilitation of a copper and cobalt mine known as KOV.
KOV will have copper production of 250,000 tonnes a year and 25,000 tonnes of cobalt a year. Sustainable production will start in 2009.
Simon Tuma-Waku, chairman of DCP, the Congolese company in which Nikanor has a 75% stake, said Nikanor's smelter would be able to extend capacity to 400,000 tonnes a year from 250,000 tonnes.
The additional 150,000 tonnes capacity would be available for other producers to smelt their concentrate on a toll treatment basis.
"That's the plan," said Tuma-Waku. Nikanor will extract a premium for the toll treatment.
KOV comprises four ore bodies and has a 172 million tonnes resource with an estimated contained metal content of nine million tonnes of copper and 800,000 tonnes of cobalt.
Nikanor would consider buying other copper/cobalt producing mines in the Katanga region, the heart of the DRC's mining industry. "You never know what can happen in business – it might happen," Tuma-Waku said.
Nikanor still requires $900m in 2006 money to complete funding of the KOV mine. Tuma-Waku, who was formerly the Congo's mines minister during its transitional government, said talks to close the finance "were progressing well".
He raised the prospect that Nikanor would sell metal in an offtake agreement to secure funding. "We'll have a combination of contracts and spot price sales," he said.
"With inflation we're looking at a bigger number," said Richard Boorman, commenting on Nikanor's $900m funding deficit. "It's not a question of getting the funding but when and how quickly."
In the meantime, Nikanor is treating 3,000 tonnes of concentrate per month through it's Kananga and Tilwezembe mines, generating an estimated $60,000 in revenue per month. There was potential to double output by July, said Larry Treadgold, chief metallurgical officer at Nikanor. |
