The Australian company that has agreed to buy the Cons Murch antimony mine, in South Africa’s Limpopo province, intends to recaptalise it once it takes over as operation manager from the end of August.

The unlisted Australian company, Stibium Mining, is buying the 76.6% of Cons Murch held by South Africa’s JSE-listed Village Main Reef for R150-million as part of an aspiration to be a major world producer of antimony, which is used in flame retardation and to increase metal hardness in items ranging from bullets to batteries.

Outgoing owner Village Main posted a R31.6-milllion loss for the three months to March 31, which saw a quarter-on-quarter antimony output fall of 5% to 671 t and a gold output fall of 25% to 1 575 oz, citing technical problems.

Incoming Stibiums’ business plan envisages a capital injection that will result in a return of the lossmaking mine to profitability.

“We’re entering into an operational agreement and will become operation manager at the mine from the end of August,” said Stibium CEO Kirk Adams, who responded to Mining Weekly from the mine, where he was working with current management on a plan to chart the way forward for the troubled Cons Murch operation, which is situated near Gravelotte, 50 km from Phalaborwa.

Once operationally in charge, Stibium will begin improving plant infrastructure, upgrading the trackless underground fleet and putting capital into underground development to make more stope faces available.

“This acquisition is the cornerstone of our ambition to become one of the largest antimony production companies,” said Adams.

Stibium believes that the supply fundamentals for antimony are such that, even in the face of increasing demand, there is a constriction on supply that will continue to lead to upward pressure on its price.

Gold, which is mined with the antimony at Cons Murch, represents about 36% of total revenue.

The other 23.4% of the shares in Cons Murch, which Village bought three years ago, are in the hands of a Cons Murch employee trust.

Stibium also owns the rights to the Neardie antimony/gold mine in Queensland, Australia, and 90% of the mining licence in the Dardana area of Kosovo.

Regulatory and shareholder approval will trigger an initial payment of $8.4-million to Village, with the remaining $6.6-million paid once written Ministerial consent is obtained for the transfer of ownership to Stibium, under Section 11 of South Africa’s Mineral and Petroleum Resources Development Act.

Stibium will also fund the first $2-million rehabilitation shortfall and Village the rest.

Under Village’s management, Cons Murch suffered drill-rig, load-haul-dumper and crushing unit breakdown and saw revenue fall 19% to R44-million and cash cost per ton rise 9% to R1 574/t in the three months to March 31.

Cons Murch was for many years previously run by JCI and later bought by Metorex.