CGH has a significant interest in an exploration permit in the Mount Nimba area of south-east Guinea. The project stretches over three plateaux with a total combined aerial extent delineated of approximately 35km2 and is adjacent to the 600 million tonne Mount Nimba iron ore project. It is located approximately 50km from a multi-user standard gauge railway with spare capacity, which extends 270km from Nimba to the deep water port on the Liberian coast at Port Buchanan. Importantly the Company has been issued a Mining Licence and Export Decree from the Government of Guinea, authorising the Company to export iron ore through Liberia to the Port of Buchanan. The Company also has an Infrastructure Development Agreement with the Government of Liberia which enables the Company to use the established rail corridor from Yekepa, near the Liberian/Guinea border, to the Port of Buchanan providing the Company with a commercial export solution for its iron ore product from Nimba.
With an initial JORC Reserve of 53.96Mt at a grade of 61.6% iron (‘Fe’) and a Mineral Resource of 205.2Mt at an in-situ grade of 57.8% Fe estimated at a Fe cut-off of 40% from prospects Plateau 2 and Plateau 3, Nimba is distinguishing itself as one of the most commercially attractive undeveloped iron ore assets in West Africa. Importantly, the JORC Reserve was calculated using the August 2013 JORC Resource of 135.5Mt at 59.4% Fe, and so represents only a fraction of the increased 205.2Mt Fe February 2015 resource.
This resource will produce a high grade (60-63% Fe) Direct Shipping Ore product ('DSO'). Metallurgical tests, limited to the Planetaya area of Plateau 2, have indicated a 40% lump: 60% fines ratio in the consolidated zone of the lithology, and 15% lump: 85% fines ratio in the unconsolidated zone. With the announced resource, this equates to an overall ratio of 24% lump: 76% fines. This has potential to improve with on-going test work of canga resources closer to the mountain and the source of the canga accumulation.
Metallurgical test results at the Nimba Project indicate that a simple dry plant process involving crushing and screening will produce a high grade lump product in the early stages of production followed by the introduction of a wet process, which would be fully able to produce both a high grade lump and fines product. Furthermore, initial Decrepitation Index tests indicate very low decrepitation, suggesting that the ore is suitable for metallurgical processes and direct Blast Furnace feed.
In March 2014 CGH completed a positive Preliminary Feasibility Study ('PFS'), which highlighted the comparatively low capex of US$299.3 million needed to bring Nimba into production, which includes a US$39.7 million contingency. This is based on a production rate of 3Mtpa, which based on the current JORC resource would create a life of mine in excess of 25 years.