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Tantalite Mine Up For Sale Or JV

Investor Wanted Ad Posted By Owner / Shareholder
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Interested in
Investor, Business Partner

Location
Bulawayo, Zimbabwe

Sector
Mining

Size
US$ 3,250,000

Description
Crowburg Resources

Mbeta Tantalite Mine Investment Proposal


Summary
Crowburg Resources owns 100% of the Mbeta Tantalite mine complex. The mining and processing complex is built around the geological work done by Richard Dollar, one of Zimbabwe’s pre-eminent geologists. The asset comes with 15 pegged claims, 3 of the claims have a proved geological resource of 100 000t of tantalite ore and the remaining 12 are virgin claims with an estimated resource potential as high as 1 million tonnes.

The mine produced and sold commercially for 10 years but is now under care and maintenance as the new owners look for a capital injection to re-start work. Approximately $1.5-2mn has already been spent on the complex ($500 000 on geological research and development and the balance on plant installation, power, water and civil works) so the bulk of what a potential investor would be injecting today is largely working capital. As there is no significant plant build-out required the time lag to cash flow is short and an investor would start seeing cash return in a relatively short period of time.

Geology
The geological and mining work done at Mbeta confirms a 100 000t ore resource in place and the potential for a further 1mn t across all the claims. Geological drilling work has been carried out and a proven resource of 100 000 t of Ta2o5 has been identified across 3 adjacent ore bodies - namely Ekem, North Reef & Water Hole 1. The average tantalite grade ranges from 250g/t to 400g/t. Using an approx. average of 300g/t translates to 32 000kg of payable tantalite metal that is ready to mine.


Table 1: Tantalite ore body and financials summary

Name Ta2o5 ore resource (t) Contained tantalite (g/t) Contained tantalite metal (t) Revenue value ($) Net profit
Ekem 63 000 350 22050 4 630 500
North Reef 27 000 230 6210 1 304 100
Water Hole 1 10 000 400 4000 840 000
TOTAL 100 000 32260 6 774 600 3 237 000

Off-take agreement has been offered
Dollar Tantalum Company (DTC) has offered us an off-take contract for 100% of what Mbeta produces. We have been offered an off-take price of $210/kg so our revenue assuming we mined the 32 000t of metal from the drilled resource over 2 years would be $6.8m over the 2 years. Estimated mining costs are $12/t so the 100 000t of ore would cost $1.2mn to mine over 2 years, with processing and plant running costs at $50 000 per month so a further $1.2mn would be needed over the 24 months needed to process the 100 000t of Ta2o5 ore. Net profit over the 2 year period would thus be $3.2mn after tax.

Infrastructure
Approximately $1.5-2mn has already been spent on the Mbeta complex. There is a full and complete processing plant with crushers, mills, conveyor systems, ore storage bins, a large Nimr & Chapman ball mill (20-30t/hour), spirals and separation tables amongst other significant pieces of equipment integrated into the plant. In addition to this there are well demarcated and maintained access roads, an airstrip, staff accommodation buildings, with water and power already in place.

Capital Required
We are looking for an immediate investment of approx. $350 000 to recapitalize the asset. This would cover 4 months of working capital ($250 000) as well as the cost of refurbishing and sprucing up some of the plant equipment (less than $100 000). We successfully started the plant as recently as May 29th 2013 but there are several items of equipment that we have earmarked for refurbishment or replacement.

Investor potential upside could be at least 4.5 times
Crowburg Resources would give an investor 30% ownership of Mbeta Tantalite Mine in return for a $350 000 capital injection. This gives 100% of Mbeta an implied valuation of $1.2mn. We believe this offers an investor significant upside potential on their investment. Firstly at the off-take price we have been offered, net earnings of $3.2mn are possible over a period of 2 years as discussed above. Some of this cash flow generated could then be put back into more geological drilling on the virgin claims thus boosting the overall value of the asset. It would then be very feasible to sell the asset as a producing entity with a larger geological resource at a multiple of today’s proposed $1.2mn implied valuation. For example, $3.2m of net earnings over 2 years implies $2mn EBITDA per annum; in our view a producing asset with a drilled resource would probably sell for at least 3x EV/EBITDA so an implied enterprise value for Mbeta once in production would be in the region of $6mn - a potential 5x uplift on the proposed $1.2mn valuation today.


OUTRIGHT SALE

US$3 250 000.00(Three Million Two hundred and fifty thousand United States dollars only)
Contact
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(Independent Broker)
Bulawayo, Bulawayo
Zimbabwe
+ + + Zimbabwe Top 10 Opportunities (Week 29 / 2017) + + +
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