May 28, 2010 - Chromex Mining will use $5 million in financing from China's Suzhou Kaiyuan Chemical Co. to double its output of run of mine chrome ore at Stellite, its open-cast mine in South Africa.
A second dense media separation (DMS) circuit and ancillary plant improvements will be installed, doubling output to 40,000 tpm of ore, the company said. The work is also expected to improve recovery margins and boost efficiency at the Stellite processing plant.
As part of the deal the chrome producer also struck an off-take deal to sell all lumpy chrome output to the company for the next 24 months. Over the next two years, a percentage of each lumpy chrome consignment will be used to offset the pre-payment, Chromex said. Pricing will be market-driven and negotiated on a monthly basis, it added.
Other projects, which include building a tailings thickener and spirals upgrade, are expected to be commissioned early June. The thickener will significantly reduce the Stellite processing plant's make-up water requirements, while the spirals upgrade includes two additional scavenger spiral banks to optimize chrome recovery.
"This is a fantastic deal as it provides a guaranteed off-take to China, our largest market, and allows for expansion without a dilutive effect on shareholders," Chromex CEO Russell Lamming said in a statement. "With chrome production set to double at our South African operation, our recent acquisition in Zimbabwe, strong cash flow and a strengthening of the team following the recent appointment of two chrome specialists, we are well placed to take advantage of the increasing demand for chrome," he added.
Chromex is now in a position to raise its production profile and its profit levels which will result in a step change in cash flows in the coming six months, an analyst at Ocean Equities said. "Chromex will shortly be in a position to market sized lumpy chrome production in addition to the chemical and metallurgical grade concentrates that it currently produces, and take advantage of the increasing demand for chrome," the analyst said.
Earlier this month, Chromex bought Zimbabwean chrome mining company Waylox Mining for $1.115 million as it seeks to expand its footprint in mineral-rich Southern Africa.
A second dense media separation (DMS) circuit and ancillary plant improvements will be installed, doubling output to 40,000 tpm of ore, the company said. The work is also expected to improve recovery margins and boost efficiency at the Stellite processing plant.
As part of the deal the chrome producer also struck an off-take deal to sell all lumpy chrome output to the company for the next 24 months. Over the next two years, a percentage of each lumpy chrome consignment will be used to offset the pre-payment, Chromex said. Pricing will be market-driven and negotiated on a monthly basis, it added.
Other projects, which include building a tailings thickener and spirals upgrade, are expected to be commissioned early June. The thickener will significantly reduce the Stellite processing plant's make-up water requirements, while the spirals upgrade includes two additional scavenger spiral banks to optimize chrome recovery.
"This is a fantastic deal as it provides a guaranteed off-take to China, our largest market, and allows for expansion without a dilutive effect on shareholders," Chromex CEO Russell Lamming said in a statement. "With chrome production set to double at our South African operation, our recent acquisition in Zimbabwe, strong cash flow and a strengthening of the team following the recent appointment of two chrome specialists, we are well placed to take advantage of the increasing demand for chrome," he added.
Chromex is now in a position to raise its production profile and its profit levels which will result in a step change in cash flows in the coming six months, an analyst at Ocean Equities said. "Chromex will shortly be in a position to market sized lumpy chrome production in addition to the chemical and metallurgical grade concentrates that it currently produces, and take advantage of the increasing demand for chrome," the analyst said.
Earlier this month, Chromex bought Zimbabwean chrome mining company Waylox Mining for $1.115 million as it seeks to expand its footprint in mineral-rich Southern Africa.
