Quarterly Report September 2016 and Appendix 5B
- Current group available cash is in the order of $2.4 million. ABx also has lines of credit available for working capital as bauxite shipments increase strongly in 2017. No capital raisings are planned in the foreseeable future.
Operations: Sales & new opportunities continue to grow
- Sales of cement and fertiliser grade bauxite continue at profitable prices. Sales in 2016 to date exceed 42,000 tonnes of cementgrade bauxite and 2,085 tonnes of fertiliser grade bauxite
- Final product stockpile at the Bald Hill Mine now exceeds 33,000 tonnes of cement grade bauxite for the next two sales
- ABx's cement grade bauxite customers have now operated their cement kilns at maximum throughput rates for more than 6 months with zero lost time using ABx bauxite
- 3 new customers identified by ABx staff in Europe and North America are now testing ABx cement grade bauxite samples.
90 tonne production tests of cement grade bauxite by a new customer are proceeding satisfactorily.
- All sales to date have been instigated by ABx marketing staff.
ABx and its marketing partner, Rawmin Mining Industries are making joint-offers to ship large tonnages into the Middle East and Europe for up to 5 years. The alliance with Rawmin carries no fees or obligations and the tonnage guarantees from Rawmin's large mines add value by allowing ABx to compete for larger contracts whilst ABx is expanding its own production capacity in Eastern Australia.
Significant resource upgrade
- ABx's Fingal Bay bauxite project in northern Tasmania has announced a 5 fold increase to 6.3 million tonnes of cement grade bauxite bringing ABx's total Tasmanian resource base to 14.7 million tonnes and its total for all regions in Eastern Australia to 124 million tonnes.
2nd large shipment locked and loaded in record time
- ABx's second shipment comprising approximately 36,000 tonnes of cement grade bauxite was loaded in record time and shipped from Bell Bay port in northern Tasmania from ABx's Bald Hill mine - the first new bauxite project in Australia for more than 35 years!
Bald Hill mine completes assembly of next sale tonnages and completes stage 1 rehabilitation
ABx and contractor Stornoway have blended more than 33,000 tonnes of final product at the Bald Hill bauxite project in northern Tasmania to meet the exact specification of its next two customers. One sale is booked for December and the second sale booked for around year-end is awaiting completion of a 90-tonne bulk test to ensure that ABx bauxite produces cement that meets the highest standards. All test results to date have been exemplary. The mine's Stage 1 rehabilitation milestone has been achieved on schedule and to a high standard.
Global markets for cement & fertiliser bauxite remain buoyant whilst metallurgical bauxite markets remain oversupplied.
All tenements are in good standing, 100% owned and free of 3rd-party royalties.
35,900 tonnes cement-grade bauxite shipped in August
On 7 August, ABx successfully shipped 35,913 tonnes of cement grade bauxite from Bell Bay Port. This brought the total tonnes shipped in 2016 year to date to 42,005 tonnes of cement-grade bauxite shipped and 2,085 tonnes of fertiliser grade bauxite for a total of 44,090 tonnes sold.
33,000 tonnes of cement-grade bauxite assembled for next shipment
In addition to the 42,005 tonnes of cement-grade bauxite shipped to date, a further 33,000 tonnes of cement-grade bauxite has been blended to specification from mine stockpiles onto the final product stockpiles at the Bald Hill Bauxite Project. The shipment date is likely around year-end, once the customer has concluded an exhaustive 90-tonne bulk production test to ensure that ABx bauxite produces cement that meets the highest standards.
Validation feedback: All test results to date have been exemplary. ABx's cement grade customers have advised ABx that they have, for the first time, operated their cement kilns at maximum throughput rates for 6 months with zero lost time and lower fuel costs using ABx bauxite. All cement product has met the highest standards for cement. ABx works with its customers to find ways to improve efficiencies.
Sales & new opportunities continue to grow
In addition to the 42,000 tonnes of cement-grade bauxite shipped in the quarter, a further 3,000 tonnes of fertiliser grade bauxite has subsequently been sold, with the first 1,500 tonnes being already dispatched in October and a second dispatch scheduled for December. ABx will work with fertiliser customers to grow this niche business significantly. The demand for fertiliser is growing strongly as world population and living standards increase.
Market development progressing well
3 new customers identified by ABx staff in Europe and North America are testing ABx cement grade bauxite samples. One 90 tonne production test of cement-grade bauxite by a new customer is proceeding satisfactorily. These tests involve the manufacture of a trial batch of cement using ABx bauxite as one of the main feedstocks into the high temperature cement kiln. A standard concrete slab is poured and tested for strength and other qualities at 3 days, 7days, 28 days and 62 days. Because these final bulk tests are expensive and disruptive, they are only done by ABx's customers after several phases of industry-standard lab-scale tests have yielded satisfactory results.
ABx's rigorous marketing samples: ABx assembles samples in accordance with ISO standards so that the tests by customers will be done on samples with the same quality bauxite as will be shipped.
Alliance with Rawmin Mining Industries: Not withstanding this strategic alliance with Rawmin, all sales to date have been instigated by ABx marketing staff. ABx commenced negotiations and testwork with cement customers in late 2013 and have kept abreast of the significant changes in the cement industry, especially the transition from coal-fired cement kilns to gas-fired which requires additional bauxite feedstock to supply Al2O3, Fe2O3 and other key ingredients in modern late-strength, corrosion-free cement. The strategic alliance with Rawmin has helped target major new markets including cement markets that ABx could not have otherwise expect to deal with at this early stage in the company's development.
ABx and Rawmin are now negotiating to jointly sell large tonnages to a number of customers in the Middle East and Europe under contracts of up to 5 years. The tonnage guarantees from Rawmin's large mines in India allow ABx to compete for these larger contracts whilst ABx is expanding its own production capacity. The alliance with Rawmin carries no fees or obligations but is providing ABx with many benefits from Rawmin's decades of producing bauxite of similar quality to that of ABx's bauxite.
Rehabilitation: Stage 1 Completed
ABx and contractor Stornoway have completed Stage 1 of the rehabilitation at the Bald Hill Bauxite Project on schedule and to a high standard. The rehabilitated areas will be closely monitored so as to increase the company's expertise in effective rehabilitation.
The landholder has been able to return a significant proportion of the land to sheep grazing.
Significant Resource Increase at Fingal Rail Bauxite Project to 6 million tonnes ABx has announced a significant increase in the cement-grade bauxite resources at the Fingal Rail project located 14kms north of Bald Hill Bauxite Mine (see ASX release dated 25 August 2016).
- Cement-grade bauxite resources for the Fingal Rail Bauxite Project totalled 6.3 million tonnes 1 which is a 5-fold increase compared with its maiden resource estimate of 1.18 million tonnes ? Fingal Rail is considered the most likely second mine for ABx and would be operated by the same operating team that is working on the Bald Hill Mine
- When long-term sale contracts are finalised, ABx will expedite development of Fingal Rail which holds substantial tonnages of cement-grade bauxite and is located immediately adjacent to the rail line (see Figures 10 & 11 below)
- 90% of Fingal Rail resources meet saleable grade in its raw state but it is anticipated that most of the bauxite production from Fingal Rail Bauxite Project will be dry-screened into a range of quality-assured product types to suit the specific requirements of each customer
- Total Tasmanian bauxite resources now exceed 14.7 million tonnes (an increase of 33%)
- The upgrade to Fingal Rail bauxite resources increase ABx's total resource base for all regions in Eastern Australia to 124 million tonnes, of which 14.7 million tonnes are in Tasmania
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About Australian Bauxite Ltd
Australian Bauxite Limited (ABx) (ASX:ABX) has started its first bauxite mine in Tasmania and holds the core of the Eastern Australian Bauxite Province. ABx's 37 bauxite tenements in Queensland, New South Wales and Tasmania exceed 5,000 km2 and were rigorously selected for (1) good quality bauxite; (2) near infrastructure connected to export ports; and (3) free of socio-environmental constraints. All tenements are 100% owned, unencumbered & free of third-party royalties.
ABx's discovery rate is increasing as knowledge, technology and expertise grows.
The Company's bauxite is high quality gibbsite trihydrate (THA) bauxite and can be processed into alumina at low temperature.
ABx has declared large Mineral Resources at Inverell and Guyra in northern NSW, Taralga in southern NSW, Binjour in central QLD and in Tasmania confirming that ABx has discovered significant bauxite deposits including some of outstandingly high quality.
In Tasmania, at Bald Hill, the Company's first bauxite mine commenced operations on schedule on 9 December 2014 – the first new Australian bauxite mine for more than 35 years.
ABx aspires to identify large bauxite resources in the Eastern Australian Bauxite Province, which is emerging as a globally significant bauxite province. ABx has created significant bauxite developments in 3 states - Queensland, New South Wales and Tasmania. Its bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.
ABx endorses best practices on agricultural land, strives to leave land and environment better than we find it. We only operate where welcomed.
Australian Bauxite Ltd