Diamond Creek Phosphate Mine Update

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

11 January 2021

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

Diamond Creek Phosphate Mine 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'). 

OVERVIEW

·    Completion of US$2.5m loan to Falcon Isle Holdings LLC ('Falcon Isle') thereby enabling the Company to increase its interest in Falcon Isle to a controlling 51%

·    Positive results from third party granulation tests with commercial production and associated sales planned for mid-January 2021

·    First 50lb -10 and -100 mesh high grade, organic phosphate has been bagged and is ready for dispatch

·    Processing plant is currently in transit to the United States and expected to arrive in Utah by the end of January 2021 with commissioning on track for Q1 2021

Keras Resources CEO, Russell Lamming said: "Keras has now provided the full US$2.5m loan to Falcon Isle and as such now holds a controlling 51% interest in Falcon Isle.  It is less than six months since the transaction was concluded and commercial production commenced, so progress from a standing start to a fully integrated mine-to-market project has been very encouraging.  The commissioning of the Utah processing plant will increase both our production capacity and flexibility to produce a variety of high grade, organic phosphate products, which will underpin the drive to grow market share whilst driving down costs.

FURTHER INFORMATION

Diamond Creek Phosphate Project

Diamond Creek is a fully permitted, high grade DSO, low capex organic phosphate mine owned by Falcon Isle; the Company now holds a 51% interest in Falcon Isle having paid the final tranche of a US$2.5m loan to Falcon Isle (see announcement dated 30 July 2020).  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 was completed in October 2020 with a total of 7,620 ore tons now extracted from the Diamond Creek phosphate mine.  As previously reported, the Company decided to increase Year 1 production by 50% from 5,000 tons to 7,500 tons to ensure sufficient material over the winter while maintaining the phased increase to 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 toll-treating agreements.  Notably, the Company has received positive results from third party granulation tests with commercial production and associated sales planned for mid-January 2021.  In addition, the first offering of 50lb bagged -10 and -100 mesh high grade, organic phosphate is now ready for sales.

A new plant, to be owned and operated by Falcon Isle, which has the capacity to process the 5-year 48,000-ton production target, is now being shipped from Shanghai and is expected to be commissioned in Q1 2021.  The plant will include a crushing and milling circuit to produce a range of products comprising -10 mesh, -100 mesh and -350 mesh powders and a granulation plant to produce high margin granulated organic phosphate.  The processing facility also includes a bagging plant to ensure that all products are available in both one ton tote bags and 50lb bags.  Once commissioned, the plant will increase both the available capacity and flexibility to produce different sized beneficiated material whilst lowering operating costs.

**ENDS**

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