Project & Corporate Update

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

13 October 2020

Keras Resources plc ('Keras' or the 'Company')

Project & Corporate Update

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce an update on progress at the Diamond Creek high-grade direct shipping ore ('DSO'), organic phosphate mine in Utah, USA ('Diamond Creek') and the Nayéga Manganese mine in Togo, West Africa ('Nayéga'). 

OVERVIEW

Diamond Creek

·    Completed 2020 mining campaign - 7,620 run-of-mine ('ROM') tons extracted including the bulk sample; this is over 50% more than initially planned for the first year of production

·    Sold 1,012 tons of product at an average price of US$260 per ton

·    Focused on bringing new owner-operated plant into production with the capacity to process the five-year 48,000-ton production target

o  Fabrication of the plant is on time and expected to be shipped from Shanghai, China in November 2020

o  Agreed new plant location to increase logistics flexibility and provide better access to the US west-coast - plant commissioning expected Q1 2021

Nayéga

·    Successful management trip to Togo in September 2020 with another planned in early November 2020 - positive meetings with high level government officials and various service providers 

·    Underpinned Nayéga's production-ready status following site visit to dry-test 6,500 tonne per month bulk sample processing plant and associated water reticulation system

·    Completed 25 of the planned 50 pits of the Ogaro pitting programme; on track to complete pitting phase by the end of October 2020 with channel samples to be submitted thereafter to determine grade and particle size distribution per geological horizon

Corporate

·    Increased interest in Falcon Isle Holdings LLC ('Falcon Isle'), the 100% owner of the Diamond Creek, to 40% having loaned Tranches 2a and 2b totalling USD1,200,000 to Falcon Isle

Keras Resources CEO, Russell Lamming said: "We are very encouraged to have completed the 2020 mining campaign at Diamond Creek, extracting a total of 7,620 tons, which is over 50% more than initially planned for the first year of production.  Furthermore, we have also achieved 20% of our Year 1 sales forecast in only two months, having sold a total of 1,012 tons at an average price of US$260/t in August and September, highlighting the significant demand for our high quality product. 

"Our attention now turns to bringing our owner operated plant into production so that we can increase both our processing flexibility and our product range and subsequently widen our marketing universe. 

Excitingly, we secured a new site 150kms south-west of Spanish Fork, which facilitates increased flexibility and better access to the US west coast without increasing our logistics cost from the mine to the new processing facility.  Although this has pushed the commissioning into early 2021, the long-term benefits far outweigh this slight delay.

"With regards to Nayéga, Graham Stacey and I spent three weeks in September meeting key government officials, government advisors and various contractors and service providers to ensure that as we progress towards the conclusion of the project permitting process we are production ready.  The Nayéga site visit undertaken during the trip, where both the processing plant and ancillary services were successfully dry-tested, is testament to the quality and drive of our in-country team, which has achieved this despite the severe restrictions necessitated by the COVID-19 pandemic. 

"Our recent trip to Togo was extremely valuable from both an operational and corporate perspective and we look forward to advancing the appropriate discussions with the new Togolese Government following the recent appointment of Victoire Tomegah Dogbé as the new Prime Minister and Mila Aziable as the new Minister of Energy and Mines.  We look forward to updating shareholders on both our Diamond Creek Mine and Nayéga Manganese Project in due course."

FURTHER INFORMATION

Diamond Creek Phosphate Project

Diamond Creek is a fully permitted, high grade DSO, low capex organic phosphate mine. The mine achieved first commercial production in late July 2020 and the first beneficiated -10 mesh organic product, part of a 770-ton order, was dispatched in early September. 

The 2020 mining campaign has now been completed with a total of 7,620 ROM tons now extracted from the Diamond Creek mine.  As of 09 October, 2,487 tons of ROM have been toll-processed with total sales to date of 1,012 tons averaging $260/t.  This represents 20% of the forecast sales for Year 1, which the Board believe to be highly encouraging based on the first two months of production.

As previously reported, the Company decided to increase Year 1 of the phased ROM production by 50% from 5,000 tons to 7,500 tons to ensure sufficient material over the winter while maintaining the Year 5 target of 48,000 tons of commercial production. The increase in planned production does not change the terms of the agreement announced on 30 July 2020.

Current beneficiation is being undertaken through a toll-treating agreement at a plant located in Fillmore, Utah, approximately 150kms south west of Spanish Fork.  A new plant, to be owned and operated by Falcon Isle, which has the capacity to process the five-year 48,000-ton production target, is anticipated to be shipped from Shanghai in November 2020.  This is expected to be commissioned in Q1 2021 and will increase both the available capacity and flexibility to produce different sized beneficiated material.

Nayéga Manganese Project

The Company continues to make progress at the Nayéga manganese project in northern Togo, West Africa.  During September 2020, management had a successful trip to Togo where they met high level government officials and various service providers; another trip is planned in early November 2020.  Additionally, they visited the Nayéga site to dry-test the 6,500 tonne per month bulk sample processing plant and associated water reticulation system, which underpinned the project's production-ready status. 

Additionally, the Company recommenced activities on 7 September 2020 at Nayéga, focussing on exploration at the Ogaro prospect, which is located 5km east-southeast of the main Nayéga deposit and 4km south of the previously explored T27 deposit.   25 of the planned 50 pits are complete with the remaining 25 pits on track to be completed by the end of October 2020; channel samples will be submitted thereafter to Intertek Laboratory in Accra, Ghana, to determine grade and particle size distribution per geological horizon.  Previous test-pitting in the area to test the core area of mineralisation have returned positive results, with best intercepts including 1.76m @ 18.6% Mn from 0m, 2.05m @ 15.8% Mn from 0m and 2.00m @ 16.2% Mn from 0m.

Corporate

Further to the announcement dated 30 July 2020, the Company has loaned Tranches 2a and 2b totalling USD1,200,000 to Falcon Isle Holdings LLC ('Falcon Isle'), the 100% owner of Diamond Creek, increasing the Company's current interest in Falcon Isle to 40%.  

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following: