London-listed miner reports nickel deposit in southern Malawi

Exploration undertaken by UK-listed company Lisungwe plc in southern Malawi has established the existence of large nickel deposits at Chimimbe and Chimwadzulu.

Chairperson John Watkins says that the exploration work undertaken by the company, which includes a pitting programme, has confirmed that the two deposits contain several million tons of nickel ore – grading at better than 0,5% nickel – which is amenable to sulphuric acid leach extraction for the production of a nickel hydroxide product.

“It is possible that some of the nickel grades are high enough to justify direct shipping of the primary ore,” says Watkins.

Watkins also says that both deposits contain substantial amounts of ferrochrome/magnetite, with possible nickel and cobalt credits, which could be recovered easily by magnetic separation for sale as a separ-ate product in a process which would precede the acid leaching of nickel from nonmagnetic material.

He says both deposits remain open laterally.

Watkins says that, at Chimimbe, progress has been rapid since the granting of an exploration licence in May.

“The average depth of the pits is about 2 m, with some as deep as 7 m still in mineralisation,” he says.

Watkins adds that a routine programme of detailed deep pitting is currently in progress to a target depth of 6 m, with the expectation of establishing over six-million tons of resources.

He says that the pitting programme will be followed by a drilling programme, which will start within the next three months, with the objective of establishing the depth of mineralisation.

“Lisungwe is confident that a sufficiently large resource has been established to warrant a scoping study, which will indicate the actual value of the deposit and guide future exploration and development. This study will be a very significant step towards the establishment of a producing mine,” says Watkins. He states that Lisungwe intends to advance the Chimimbe project as quickly as possible, and is currently in the process of identifying two engineering groups with experience in nickel processing to carry out the study.

“One of the engineering groups, which will be appointed in the near future, will work with Lisungwe’s minerals processing consultant,” says Watkins.

He says the company has also identified an experienced mining engineer to advise on the most suitable mining method for the Chimimbe deposit.

“Lisungwe has already carried out preliminary work for a scoping study at Chimimbe and, at this stage, envisages a 1,2-million-ton-a-year operation, with production of ferrochrome by magnetic separa- tion, followed by acid leaching, to produce nickel hydroxide,” explains Watkins.

He says the firm has also produced estimates for the plant’s cost and staffing requirements, which will be refined by the scoping study.

“Transport is planned to be mainly by rail. A branch line, to the already established main line, located 12 km away, is to be constructed, and will terminate at the modern deep-sea port of Nacala, on the Mozambique coast.

“The electricity grid is 6 km away and has the capacity to supply the estimated 2-MW requirement.

“Abundant water will be obtained from boreholes to be drilled nearby,” says Watkins.

At Chimwadzulu, Watkins says his firm is negotiating with a local junior mining firm, called Nyala Mines, which has mineral rights over the area, in order to acquire a sublicence and continue with field programmes.

“Subject to the successful conclusion of negotiations with Nyala Mines, Lisungwe expects to follow a similar programme to produce a world class resource for Chimwadzulu,” says Watkins.

Spot prices for nickel, which is an essential ingredient in the pro-duction of stainless steel, are at about $30 000/t, whereas the Lisungwe profitability projections are premised on a conservative nickel price of $15 000/t.

“The forthcoming drilling programme and scoping study for Chimimbe are considered to be further stepping stones towards the development of Lisungwe’s first mine, which will be the first modern base-metal mine in Malawi,” comments Lisungwe MD Stuart Brand.

Lisungwe plc in listed on London’s Ofex market and, apart from nickel, the company is exploring for gold, platinum-group metals and uranium in Malawi.