Bushveld Minerals’ brave play

[miningmx.com] — BUSHVELD Minerals is a little-known iron ore and tin
exploration play that raised £5.4m on the UK’s Alternative Investment Market (AIM)
last week.

The company’s CEO, Fortune Mojapelo, concedes that scepticism was expressed in a
roadshow, but says there are enough funds now for 12 to 18 months in what he hopes
will be prove to be a billion-tonne resource. That’s pretty enormous, and all this time
sitting among the platinum fields of the North West province.

The resource is, in fact, a magnetite deposit, which has to be concentrated into iron
ore. So far, some 600m tonnes (mt) of magnetite have been detected, but with a bit
of money in the bank, there’s now ammunition for more drilling and for providing the
kind of confidence investors want.

That’s how the exploration game works. For their part, UK investors said they’d look
to buy Bushveld Mineral shares on its return to the market, hopefully armed with
higher levels of resource confidence.

For the meantime, investors are probably right to be a little bit sceptical. Iron ore’s
one of the du jour minerals; everyone wants a piece of it. Even Tito Mboweni
has an iron ore resource he wants to develop, while ArcelorMittal SA is also on the
lookout for the mineral. However, the best resources in SA are already tied up by
Kumba Iron Ore, African Rainbow Minerals and Assmang.

Instructively, when Exxaro Resources was seeking high and low for the mineral, it
eventually ended up in the Republic of Congo rather than SA.

Yet, fortune favours the brave.

Bushveld Minerals is partly the work of the Viljoen brothers (twins, Morris and
Richard); both of them geologists at University of the Witwatersrand.

It was they who brought us Central Rand Gold, a disastrous attempt to breathe new
life into the old Johannesburg gold workings – although perhaps it’s a little unfair to
place the blame at the door of the Viljoens, since they conducted the geological
mapping and scoped the project.

Rather, it was Australian investors in Central Rand Gold who implemented it badly,
according to Mojapelo, who was previously a consultant at McKinsey & Co.

The Viljoens also recently listed Lemur Resources in Australia, a company that’s
digging for coal in Madagascar and partly created out of assets once controlled by
Coal of Africa, another Australian group, but now managed in Johannesburg by CEO,
John Wallington, a former Anglo American executive.

Commenting on the iron ore project, Mojapelo says that scale’s a big priority for the
venture, although he won’t be drawn on specifics. Yet the iron ore project would have
to be in the region of 10mt/year. “Anything less than 5mt/year would not do justice to
a billion ton resource,’ he says.

Gaining access to infrastructure is the other major requirement for bulk mineral
projects of this ilk. Mojapelo thinks the iron ore can be sent north via rail through
Mozambique’s Matola terminal. Transnet Freight Rail has expanded the line capacity
to the port while Grindrod is expanding the terminal to 20mt/year over which CoAL of
Africa has exclusive rights, but is unlikely to use it all.

Bushveld Minerals does have at least one important feature, and that’s the fact the
magnetite resource must be beneficiated in order for iron ore to be created. In the
process, there’s also the option of producing titanium dioxide as well as pig iron and
vanadium. This ticks the box Government wants to see, value-add to minerals rather
than the exportation of “raw’ ore.

Exxaro Resources is, however, thought to be planning a titanium dioxide beneficiation
plant of its own; a development that might see Bushveld Minerals second in the SA

– Finweek