ASX listed and Nigeria focussed base metals producer, Symbol Mining, has loaded its first direct shipping ore or “DSO” concentrate, grading around 45% zinc for road transport into Lagos Port for export to China later this month.
The initial 250 tonne parcel of zinc concentrate from the Macy project, is expected to fetch just over USD$150,000, providing a pretty healthy margin at current LME zinc prices of around USD$2,600 per tonne for a 99% zinc concentrate.
With total net direct costs sitting in the lowest quartile of production at just USD$0.55 per pound at present and the exceptionally high grade of the in-situ ore body and ease of upgrade, the Macy project is well-positioned for strong cash flows moving forward.
In addition, the company has also commenced construction a jig plant on site, which will use simple gravity separation techniques to upgrade ore streams to concentrate grades closer to 75% and in turn, it will recover up to 85% of the contained metal from Macy.
The low CAPEX beneficiation plant will also allow the company to improve “low grade” zinc ores below 10% to better grades, turbo charging the economic returns in the process.
Typically, the run-of-mine ore grades for zinc globally come in at around 5%, so the Macy deposit, which also includes lead mineralisation, is outstanding.
Symbol is part of small, but growing wave of ASX listed resource companies that have abandoned illusions of grandeur involving massive CAPEX projects in favour of staged small-scale mining up front, to get the company a cashflow before moving to the larger scale play.
The company’s Macy project currently has an initial mine life of 1 year, spitting out about $10m of free cash, which the company will use to self-fund its own regional exploration and development drilling around the deposit and potentially extend the project life considerably further.
This will include more definition drilling around the nearby Aisha project, where high-grade mineralisation within a similar vein-hosted zinc-lead ore system has been delineated from historical and artisanal workings.
With a 25-year mining lease approved in June over the project, there is plenty of incentive for Symbol to go out and find Macy No. 2.
The maiden shipment comes just 5 months after the company commenced mining at the Macy project, part of its larger 60%-owned Imperial JV project, located about 370km east of Nigeria’s capital city of Abuja.
Symbol has an obligation to spend $15m under the JV ground agreement with partner, Goidel Resources Limited, after which point Goidel are required to contribute its 40% share of the ongoing costs.
The company holds a small, but very high grade JORC-compliant mineral resource of 132,700 tonnes grading 18.3% zinc and 2.1% lead at Macy, with 85% of the current estimated classified in the indicated category, from which ore reserves can be defined.
The processing plant has been commissioned on site and is expected to reach a throughput capacity of 10,000 tonnes a month when fully operational.
According to the company, open pit mining is progressing ahead of schedule, with processing head grades in line with expectations, as the pit develops deeper towards the higher-grade mineralisation.
In the coming period, the operation with continue to ramp up in line with the mining activity, with processing expected to reach a monthly production of 4,500 tonnes of high-grade DSO zinc and separate lead saleable products.
Symbol is presently finalising a sales contract with its offtake partner Noble Resources, with an 85% pre-payment for the ore due within 5 days of loading onto the vessel at Lagos Port.
The company will receipt its first revenue later this month, with the final payment to be determined during a 3-month quotational period and independent analysis of the delivered ore product’s quantity and grade.
Symbol Mining CEO Tim Wither said: “Although a modest maiden shipment, ramp up to a steady state should come with relative ease as the mine deepens into more consistent high-grade material and the processing and logistic channels stabilise.”
“The team should be very proud of the effort to date and demonstrates our capability to build a successful, viable mining operation in emerging Nigeria.”
In addition to the existing Macy and Aisha projects, there are around 30 other regional targets within the larger Imperial JV tenement holdings that appear prospective for defining additional deposits of economic base metal mineralisation for Symbol.
The main vein-hosted mineralisation at Macy is contained within a sandstone rock sequence and is known to strike over 5km of artisanal and historical shallow open pit and underground mine workings.
The current open pit covers only 250m of this strike zone, where the wide tabular, high zinc-rich mineralisation sits in a hanging wall position above the thinner and lower grade lead mineralisation.
The Macy pit has a high strip ratio of 12:1, but this is more than offset by the extraordinary grades of zinc being mined.
The ore system is clearly defined within extensive weathered and oxidised massive sulphide deposits of zinc, lead, iron and copper sulphides throughout multiple vein sets located in the district.
Further to the southwest, the company also holds a 60% JV share in the Tawny project, which covers a small exploration lease considered a prospective brownfields opportunity, based on historical open pit and underground mining a decade ago.
The ground is well-located 4km from a major highway and only 150km east southeast of Abuja.
Portable XRF assays taken from ore samples in this area reveal eye popping zinc values up to 45%, lead values up to 25% and silver assays up to 19 ounces to the tonne.
Both JV areas lie within the regionally significant and poorly explored Benue Trough in Nigeria, which is a geological basin rich in sedimentary-formed deposits of zinc, lead and barite mineralisation.
Symbol has big plans in Nigeria and intends to take full advantage of its first mover status in the country and is on the hunt for more ground holdings prospective for base metal mineralisation.
According to company management, Nigeria is a well-kept secret with the country open for foreign investment into its mineral resources sector, as the Government tries to diversify the economy away from the petroleum industry, which has largely underwritten its development over the last 60 years.
Nigeria has seen very little modern mineral exploration, despite the World Bank having funded the acquisition of high-quality airborne geophysics over the entire country.
In fact, Symbol’s JORC compliant mineral resource for the Macy project is only the second such reliable estimate to have been completed in Nigeria, after Canadian listed Thor Explorations’ high-grade Segilola gold project in the southwest of the country.
As the old adage goes “Grade is King” and although it’s early days for the company in Nigeria, hopefully the world-class zinc grades exhibited at Symbol’s Macy project are a sign of things to come.