Catapu Limestone Project
The limestone deposit is located 20 km southwest of Caia within the forestry concession area and the exploration licence is part of a forestry concession. The Tete / Beira rail link, complete with a 3-line siding, runs on the northern boundary of the concession. Early test work on surface material of the limestone indicates that there are potentially acceptable grades of calcium carbonate (CaCO3) for limestone for use in cement production. In addition, initial work suggests that solubility should be suitable for Agri-lime and the material is also expected to be suitable for aggregate production. The Board believes that there is local demand for lime for cement production, agricultural applications and aggregates.
The Forestry concession is valid for another 10 years and subject to renewal for another 50 year term and is permitted to cut up to 3,000 m3 per annum, over and above historically cut and dead timber. TCT is the operator of the limestone exploration license and this is valid for two years from the date of formal grant in March 2016, and is renewable for another two years. The work commitments under the exploration license are set out in an approved exploration programme that is budgeted at US$200,000. There has been limited exploration work to date on the limestone deposit and there is no current resource, although there is evidence of historic small scale mining activity.
TCT / Dalmann Forestry Investment
Premier African Minerals provides shareholders and investors with access to the positive market, demand and pricing fundamentals of the limestone sector and inter alia, construction demand aggregates market in Africa, through our Catapu, Limestone project in Mozambique and our 52% investment interest in Mozambique-based TCT Industrias Florestais Limitada ("TCT") Further this investment also provides Premier shareholders and investors with cash flow earnings potential through TCT’s forestry and finished timber goods brand Dalmann.
Next Steps, Exploration & Scoping Study
The Company plans to commence an initial exploration and assessment work programme on the limestone deposit that is expected to provide a maiden resource and preliminary over the course of 2017.
Added Benefits, Finished Timber Products
In addition to its limestone project, TCT also has existing forestry operations that are expected to contribute significantly to cash flows from an early stage. Limited rehabilitation in the milling operations of the forestry division will see volumes increase to achieve this. At present TCT produces a range of Mozambique hardwoods and either exports top grade kiln dried timber in unfinished or semi-finished form. Bespoke furniture and a number of allied timber items are produced from timbers that are highly rated in both Germany and the UK. Located within the forest area, TCT operates a 28 bed lodge and a 9,963-hectare game farm and hunting concession. This concession is valid until 2065.
TCT is expected to be fully self-sustaining and will contribute positively to cash flow for Premier as a whole.
The forest concession includes rights to harvest up to 3,000 m3 of logs annually. This represents potential gross revenue of up to US$1.5m against projected concession operating costs of less than $750k. Optimisation of the timber operations to achieve this return is a short term priority. Further details on TCT IF's activities are available from its website, www.dalmann.com