Name and Location
Sandpiper phosphate project.

Location
The project tenements lie in waters about 60 km off the coast of Namibia and cover a combined area of about 7 000 km2 in the regional phosphate-enriched province to the south of Walvis Bay in water depths of 180 m to 300 m.

Project Owner/s
Namibian Marine Phosphate (NMP) is a Namibian registered joint venture company, the shareholders of which are Mawarid Mining LLC from Oman and Namibian company Havana Investments.

 Project Description
The project has total Joint Ore Reserves Committee-compliant measured and indicated resources of 226.8-million tons at 19.7% phosphorus pentoxide.

A feasibility study has confirmed Sandpiper as technically and economically feasible, and envisages steady-state production of three-million tons a year of phosphorus pentoxide concentrate product (rock phosphate) grading 27.5% to 28% phosphorus pentoxide over an initial mine life of 20 years, including a two-year ramp-up period.

It is intended that dredging of the seafloor sediments will be achieved with a large-capacity trailing suction hopper dredge using existing technology.

Potential Job Creation
The operations could potentially employ about 450 Namibians directly and indirectly in the Erongo region.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 10% discount rate, of $297-million and an internal rate of return of 23.6%.

Capital Expenditure
Capital costs to first production for a three-million-tonne-a-year operation are currently estimated at $326.3-million according to  March 2012.

Planned Start/End Date
Following a final investment decision and securing financing for the project, the estimated construction and commissioning period is 24 months.

Latest Developments
Environmental objections to the Sandpiper project have impeded its progress since 2012.

In the interim, however, NMP has adjusted its proposed mining method to cater for more modern technology.

“There have been several adjustments to the project from its original proposal,” NMP COO Mike Woodburn has said.

In terms of dredging equipment, autonomous and remote controlled underwater vehicles can be used to assist in positioning ships and in seabed trawling to obtain monitoring information over long periods without the need for expensive support vessels, he has noted?.

Woodburn has added that, on shore, there have been major developments during the past five years, with the expansion of the Walvis Bay port and the construction of the Southern African Development Community bulk gateway terminal, which also serves as the primary oil terminal. This will assist NMP in docking its ships, offloading concentrate and establishing its land-based processing plant.

In addition, NMP has secured, in principle, an allocation of port land from State-owned port authority Namibian Ports Authority, thereby enabling it to develop its processing plant once a contractual land allocation has been granted.

Once the NMP has resolved the environmental objections and received approval to progress with its plans, Woodburn has said that the project may be fully operational within 24 months.

“We will need to conduct some additional industrial environmental-impact assessments in relation to processing on shore,” NMP CEO Chris Jordinson has added, noting that this will probably take about 12 months to complete.

Woodburn has also said that NMP will need to update its financing model for the project, as the initial financing was conducted through several South African banks in 2013.

“The project . . . has an 18-month development timeline, but during this we can also complete the construction . . . We aim to commence the project at least six months before construction is complete to ensure there is feed for the plant to start processing once it is completed.”

Key Contracts and Suppliers
J Midgley & Associates and Enviro Dynamics (environmental consultants).

Contact Details for Project Information
Minemakers, tel +61 8 9264 7000, fax +61 8 9264 7099 or email frontdesk@minemakers.com.au; or Magnus Investor Relations & Corporate Communication, John Gardner, tel +61 413 355 997.
Union Resources, tel +61 2 9233 4750, fax +61 2 9233 4749 or email info@unionresources.com.au.
Tungeni Investments, tel +264 61 400 205, fax +264 61 221 333 or email info@tungeniafrica.com.