Baobab rises on 'excellent' report

Mozambique-focused metals explorer Baobab Resources saw a rise in its share price after reporting "excellent" results from a scoping study conducted by independent consultants, Coffey Mining.

The study looked at two scenarios to access the economic viability of the firm's Tete iron/vanadium/titanium Project in Mozambique.

Scenario A is a base-case production of 3m tonnes per annum (mtpa) of titano-magnetite concentrate and 0.5Mtpa ilmenite concentrate products for export. Initial capital expenditure is estimated to be $448M.

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Scenario B capitalises on the project's access to low tariff hydro-electric power and strategic proximity to thermal coal reserves to add further value on site through the mine-mouth smelting of 1Mtpa pig iron. Initial capital expenditure is estimated to be $690M.

Ben James, Baobab's managing director, said: "The excellent scoping study results show very clearly the 'value add' from the plans for on-site smelting of pig iron and underlines the strategic advantages of the project's unique geography with respect to infrastructure and complementary resources. Producing a higher value, high demand product will not only broaden the market base, but also mitigate the requirement to compete for rail and port access.

"The vanadium potential remains to be modelled and could add further to the value of this project. It's clear to us that we have the opportunity to add substantial value to the already impressive bottom line of this project."

The share price rose 3.45% to 15p by 13:21.

NR