IBI Corp -
Evaluation of Ugandan projects received
IBI Corp IBICShares issued 177,552,7311998-07-13 close $0.06Tuesday Jul 14 1998Mr. Edward Lai reports The company has received an evaluation report on its phosphate/vermiculite projects in Uganda. IBI has the right to acquire a 70 per cent interest in the deposit, subject to monthly cash payments totalling $80,000 and a financing commitment of $1.2-million due by Aug. 25, 1998. The original vendor of the property, International Mining Development, would hold the remaining 30 per cent. The report was written by independent geological consultant Dr. Ulrich Kretschmar following a visit to the property early in May. Dr. Kretschmar's report provides an independent overview of the exploration, reserve estimates and feasibility of mining the phosphate/vermiculite project, based on existing government geological reports. Local authorities were interviewed and research on existing data was conducted at the library of the Geological Survey of Uganda. The technical report has given the company strong encouragement. It is particularly gratifying that the 8.5 million tonnes of proven reserve (3 million tonnes of which grade 11 per cent phosphate with the remaining 5.5 million tonnes grading 15 per cent) was calculated in the 1990s by the Uganda Department of Geological Survey and Mines with technical and financial support from the United Nations Development Program. The Busumbu phosphate deposit is amenable to relatively low-cost, open-pit mining methods. Preliminary exploration work on other sections of the company's property indicate that there is potential for between 30 and 60 million tonnes of similar grade. In terms of the $1.2-million financing, the company is continuing to hold discussions. No firm commitments have been made as yet. Dr. Kretschmar reports that phase one of the phosphate/vermiculite development would require combined expenditures of approximately $400,000 (U.S.) for the construction of an access road, site preparation, training centres and workers' quarters, power lines and other infrastructure. Once the common infrastructure is in place, development of the two separate but neighboring Busumbu phosphate and Namekara vermiculite deposits could begin. Namekara is two kilometres northwest of the Busumbu deposit. Common expenditures for capital equipment would require another $1.7-million (U.S.). The Busumbu phosphate mine would incur pre-opening expenses of $190,000 (U.S.) and infrastructure and building costs of $367,000 (U.S.), according to Dr. Kretschmar's estimates. The Namekara vermiculite mine would incur costs of $260,000 (U.S.) for infrastructure and buildings, pre-opening expenses of $170,000 (U.S.) and mine capital of $1,166,000 (U.S.). The total budget for the combined Bukusu project is estimated at approximately $4.5-million (U.S.). At Namekara, pitting and drilling have established a proven reserve of approximately 500,000 tonnes of vermiculite-bearing soil. Current estimates of possible reserves are more than eight million tonnes. Dr. Kretschmar notes that the average grade is 22 per cent, with areas of up to 41 per cent vermiculite. International Mining Development, a private company owned by Dr. Mark Doidge and Professor Peter van Straaten, acquired the property following geological work by a government department. The deposits are in the Bukusu carbonatite complex, which at 13 kilometres in diameter, is probably the largest known carbonatite complex in Africa, according to Dr. Kretschmar. The Busumbu Hills were mined from 1945 to 1963 and processed 1.2 million tonnes of phosphate at an average grade of 19 per cent. The main markets for the mine were large-scale agricultural establishments in Kenya, adjoining Uganda's eastern border. Dr. Kretschmar estimates that today Uganda and neighboring Kenya and Tanzania require 200,000 tonnes annually of rock phosphate. Current imports to Uganda alone are 6,000 tonnes per year. There is a large market in the immediate vicinity of the Busumbu deposit for coffee, tea, bean and seed crops. Under the leadership of democratically elected President Museveni, Uganda's economy has seen positive GDP growth for the past 10 years. Foreign investors may form 100 per cent foreign-owned companies and take majority or minority interests with local investors. Repatriation of profits and dividends is not restricted. (c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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