Firering Strategic Minerals plc (LON:FRG), a development company focusing on critical minerals, is pleased to announce its Final Results for the year ended 31 December 2023.
OVERVIEW
· Successful alignment of near-term revenue objectives with evolving commodity markets through the acquisition of an initial 20.5% of Limeco Resources Limited (“Limeco”) post period end:
o Limeco owns an ex-Glencore limestone project with historical spend of over US$100m in Zambia which demonstrates immediate growth potential and significant cash flow prospects
o Quicklime is an essential component in various industries including copper production, steel manufacturing, construction, and environmental management
o c£2 million raised post period end to commence funding the acquisition of an initial 20.5% of Limeco, as well as finance the recommissioning of the lime plant and ramp up of its operations
o The project is debt free with an estimated resource of 73.7Mt @ 95.3% CaCO3 and an estimated limestone stockpile of 190,000 tonnes, which will be used to start production
o Fully permitted with the first kiln due to be operational by the end of 2024
o Potential for multiple revenue streams from the sale of quicklime, aggregate, and ancillary products such as ash to the concrete industry
o Aggregate sales began in October 2023 contributing to early cash flow, with ongoing discussions with offtake partners
· Further progress in the advancement of the Atex Project in north-west Côte d’Ivoire during and post year-end:
o Successful expansion of the known lithium mineralisation by 122% following Firering’s first reverse circulation campaign in March 2024
Commenting on the results Yuval Cohen, CEO of Firering Strategic Minerals said: “As an emerging multi-project company we can adapt to shifting market conditions. Accordingly, we are currently prioritising our resources on our quicklime asset, which has the potential to generate significant cash flow due to its alignment with the robust copper market. With this background, post period end, we were delighted to acquire a 20.5% stake in Limeco, which we can increase to 45%.
“Limeco has benefited from over $100 million in historical investment, creating a near-complete operation comprising a limestone quarry, a two-stage crushing circuit, and a lime plant. We are currently renovating the lime plant by changing the fuel system from Heavy Fuel Oil to coal gasification and are on track to recommission the first kiln in Q4 2024. The remaining seven kilns will be commissioned in stages thereafter. When fully commissioned, Limeco will be the largest quicklime operation in Zambia, able to support the Copperbelt’s rapidly expanding copper production needs.
“We look forward to updating shareholders as we achieve important milestones during the second half of the year.”
CHAIRMAN’S STATEMENT
Over the past year, we made a pivotal decision to shift to prioritise Limeco Resources Limited (“Limeco”), a quicklime opportunity in Zambia that offered an immediate growth potential with significant cash flow prospects.
Accordingly, post period end, we raised gross proceeds of £2.089 million via a Placing, Subscription and WRAP Retail Offer to principally fund the acquisition of an initial 20.5% of Limeco as well as finance the recommissioning of the lime plant and ramp up of its operations. We also have an option to acquire an additional 24.5% of Limeco to be exercisable in five tranches between July 2025 and July 2026.
With a historical investment of more than US$100 million, Limeco’s assets comprise a limestone quarry; a two-stage crushing circuit with an installed capacity of 300 tonnes per hour (tph); and a lime plant capable of producing 600-800 tonnes of quicklime per day. To put the latter into perspective, during the past two years quicklime has been trading between US$160-US$218 per tonne.
While the Project was in an advanced stage when we invested, our investigations revealed that more work to optimise production would be needed before recommissioning, including updating the crushing circuit to ensure production of the optimal limestone size fraction to be fed to the kilns and to generate aggregate from the waste stream, and transitioning the fuel source from heavy fuel oil (‘HFO’) to coal gasification to provide more cost-effective heating energy for the kilns.
These workstreams have been progressing well with phased recommissioning of the eight kilns scheduled to commence in Q4 2024 with planned completion in Q3 2025. Key to this is a 150,000-tonne limestone stockpile that we can initially use to ensure a structured and efficient start to operations. This is in addition to a ~250,000 tonnes waste stockpile ready for the immediate production of aggregate.
The quarry has a current Mineral Resource (“MR”) of 73.7 million tonnes (“Mt”) at 95.3% CaCO3 (Golder Associates, 2017). Independent consultants Earthlab Exploration and Mining Consulting (Pty) Ltd, recently reconfirmed tonnages and grades used to produce the initial MR in 2017 as well as a potential exploration target of 95Mt. Limeco has applied for this exploration licence, which is pending approval.
The Company has day to day operational control of the Project under the leadership of our CEO, Yuval Cohen, who is supported by a tier 1 team engaged to refurbish the lime plant, including consultants with firsthand knowledge of Limeco’s plant. Additionally, Firering’s significant shareholder Rina Group, via Rompartner Ltd, which is a major shareholder in one of the largest quicklime plants in Israel, is providing additional operational support.
Our strategy is focused on creating multiple revenue streams at Limeco from the sale of quicklime, aggregate, and ancillary products such as ash to the concrete industry. In line with this, aggregate sales began in October 2023 contributing to early cash flow, with future offtake agreements anticipated once renovations to the crushing plant are completed in Q3 2024. Meanwhile, quicklime offtake discussions are ongoing including negotiations with a major copper producer. We are also finalising an agreement with a third party to lease our HFO tanks for diesel storage, which will provide further cash flow to support our operations.
In particular, we aim to capitalise on our unique position as the largest known quicklime operation in Zambia capable of supporting the increased copper production activities in the Zambia Copperbelt. Currently, copper producers are importing quicklime from South Africa, which incurs additional costs, time delays, and results in increased CO2 emissions.
As background, quicklime is an essential component in various industries including copper production, steel manufacturing, construction, and environmental management. In the extraction and refining of copper, quicklime is used primarily for pH control, aiding in the flotation process that separates valuable copper minerals from waste rock. It is also vital in the neutralisation of acidic waste streams and tailings, ensuring that these by-products meet environmental regulations before being safely discharged or repurposed.
While Limeco is now the Company’s key focus, we continue to develop the Atex Project in north-west Côte d’Ivoire, in which we hold a 90% interest. Covering both lithium and tantalum-niobium potential, our licence is situated within the Baoulé-Moss domain of the West African Craton, which features extensive arcuate belts stretching hundreds of kilometres, known for hosting multiple deposits of gold, base metals, and pegmatite-hosted columbo-tantalite and lithium.
Following a scout drilling campaign in 2022, we completed our first reverse circulation (‘RC’) drilling campaign at Atex in March 2024, with 3,753 metres drilled over 23 holes, significantly expanding known lithium mineralisation by 122%, extending the strike length to 800 metres.
Our next stage is to focus on expanding drilling exploration efforts in an easterly and northerly direction and delineating a maiden resource.
We remain committed to sustainable practices and minimising our environmental impact. Accordingly, the Company has implemented a comprehensive strategy to foster positive community relations and support local development. These efforts are complemented by a commitment to minimising our environmental impact, with all our operations adhering to stringent environmental standards.
With our strategic shift towards quicklime production well underway, significant milestones achieved and more on the horizon, we are excited about Firering’s future and ability to deliver sustained value to shareholders through diversified revenue streams, robust resource management, and strategic market engagement.
I would like to thank shareholders for their support and look forward to updating the market regularly as our path to production gains momentum.
Youval Rasin
Non-Executive Chairman, Firering Strategic Minerals
