New drilling intersecting multiple thick potash seams has led to the development of two key milestones at Elemental Minerals’ Sintoukola Project in the Republic of Congo.
Both a Bankable Feasibility Study and a Pre-Feasibility Study are currently underway to set up deliveries at the project’s Kola sylvinite deposit and the Dougou carnallite deposit.
Drilling at Kola will provide data for the design of a shaft which will provide access to shallow high-grade sylvinite ore reserves totalling 152 million tonnes grading 31.7 per cent KCI.
Last month, Elemental initiated a strategic partnership with India’s Shapoorji Pallonji Group, which aims to provide construction guidance andA$19.3 million in equity funding for Sintoukola.
The partnership also has the potential to provide an entry point into the Indian market, with the Shapoorji transaction providing for a $19.3 million investment into Elemental via the placement of 101.6 million new Elemental shares at $0.19 per share. The total investment will equate to a 19.99% shareholding in Elemental by Shapoorji.
Elemental is also in advanced discussions with potential partners to bring in equity funding that incorporates a phased production ramp-up with Build, Operate, Own and Maintain methodologies, that have been successfully applied on a number of other large projects.
Earlier this year, a capital raising effort reflected internal support by generating $5 million from existing shareholders.
The latest drilling at Sintoukola has confirmed the thick, simple, high-grade and consistent nature of the project geology, further supporting positive expectations for the upcoming BFS (Kola) and PFS (Dougou) results.
These studies represent potential price catalysts for Elemental and are part of an accelerating near-term future for the company, which also includes the Dougou ESIA, additional investment into Elemental and offtake negotiations of MoP.
Elemental’s ability to attract Shapoorji as a major investor is significant considering the Indian company’s 150-year track record in construction and infrastructure, including the development of conveying solutions, minerals projects, roads, ports and power plants.
Proactive Investors has calculated a 12 month valuation of $0.52 for Elemental based on peer analysis and taking into account upside from improved project economics. Securing off take and investment into Elemental would boost this target.