Baobab Resources PLC Project Update (4177D)
January 29 2015 - 2:01AM
UK Regulatory
TIDMBAO
RNS Number : 4177D
Baobab Resources PLC
29 January 2015
BAOBAB RESOURCES PLC
PROJECT UPDATE
29 JANUARY 2015
Baobab Resources plc (AIM: BAO) ('Baobab' or the 'Company') is
pleased to provide the following update regarding the equipment,
procurement, construction ('EPC') partner selection process and the
participation interest of the International Finance Corporation
('IFC'), the Company's joint venture partner in the Tete
Project.
EPC PARTNER SELECTION PROCESS & TEST WORK
The Company is nearing the conclusion of the selection process
of a Chinese partner to conclude the Feasibility Study, to perform
pilot scale test work and to provide an EPC contract proposal with
industry standard process performance guarantees. Baobab has been
in detailed discussions with leading steel industry specialists
Sinosteel Equipment & Engineering ('Sinosteel') and The China
Metallurgical Group Corporation ('MCC'). The Company expects to
announce the outcome of this process in due course.
Baobab has also been conducting bench scale test work on a 1.5t
iron ore sample with Beijing Shenwu Environment & Energy
Technology Company Limited ('Shenwu'). Shenwu is one of the largest
hi-tech enterprises in China, specialising in research, development
and marketing of energy-saving and emission reduction innovation
technologies. The test work is trialling an alternative reduction
technology to the well-established rotary kiln process. Results are
anticipated during March, after the Chinese New Year holiday
period.
IFC DILUTION & CONTINUING COMMITMENT
The IFC has elected not to contribute its 15% of project
expenses towards the Unincorporated Joint Venture ("UJV") for the
2014 calendar year. In terms of the provisions of the
Unincorporated Joint Venture Agreement between Baobab and the IFC,
the IFC will incur a dilution in their percentage participation
rights in the UJV from the current 15% to 12.88%. The IFC remains a
3% shareholder in the PLC.
The IFC has given the Company the necessary assurances of its
long term commitment to the development of Baobab's Tete project
and that it intends to contribute its 12.88% of project expenses
for the 2015 calendar year.
Commenting today, Ben James, Baobab's Managing Director, said:
"With the technical merits of the project well-established in the
PFS and subsequent DFS test work, Baobab's management team has been
focused on investigating opportunities to reduce the initial
capital expenditure required. By adopting Chinese procurement, a
more technically and commercially favourable path to production may
now be pursued. A process guarantee on the selected flow sheet will
not only deliver enhanced project economics through improved
capital efficiencies, but will also, by way of accessing associated
financial institutions, significantly reduce the timeframe to
financial close and subsequent project execution.
'The Company is also pleased to have the on-going support of
IFC, an ideal development partner for a project of this scale in
Africa."
ENQUIRIES
__________________________________________________________________________________
Baobab Resources plc
Ben James: Managing Director +258 21 486 404
Jeremy Dowler: Chairman +44 1372 450529
Frank Eagar; Finance Director +27 76 753 5377
Canaccord Genuity Limited
Neil Elliot +44 207 523 8000
Chris Fincken
Tavistock
Emily Fenton / Nuala Gallagher +44 20 7920 3150
ABOUT BAOBAB RESOURCES PLC
Baobab Resources is an exploration and development company
focused on the Tete pig iron and ferro-vanadium project in
Mozambique, in which the International Finance Corporation holds a
12.88% participatory interest. The Company has been listed on the
AIM of the London Stock Exchange (ticker BAO) since 2007.
ABOUT SHENWU
The Beijing Shenwu Environmental & Energy Technology
Corporation ('Shenwu') is one of the largest hi-tech enterprises in
China specialising in the research, development and marketing of
energy-saving and emission-reduction technology for global fossil
fuel, ore resources and renewable energy consumption market.
ABOUT SINOSTEEL & MCC
Sinosteel Equipment & Engineering ('Sinosteel') is the
engineering and construction subsidiary of Sinosteel Corporation, a
Chinese state owned enterprise, primarily involved in mining,
trading, equipment manufacturing and engineering. Sinosteel
Corporation has extensive international experience and is directly
involved in mining, with operations in Australia and South Africa.
The company also provides equipment covering all aspects from
mining to iron and steel making (including rotary kilns, sintering
plants, submerged-arch furnaces, continuous casters and rolling
equipment and power co-generation plants). In addition, the company
offers refractories for the steel making, petrochemical,
non-ferrous, cement, and glass industries.
The China Metallurgical Group Corporation ('MCC') is a publicly
listed, state owned enterprise based in Beijing, China, and is one
of the country's largest equipment manufacturers, engaging in EPC,
natural resources exploitation, papermaking, equipment fabrication
and real estate development. MCC is active internationally with
mining/processing related EPC contracts and investments in Africa,
Australia, Pakistan, Afghanistan and Papua New Guinea (the latter
being the Ramu nickel / cobalt operation under construction where
rotary kilns will be used for direct reduction).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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