The Company has a JV agreement with Baobab for the development of the Monte Muande licences in Mozambique, which are prospective for magnetite, phosphate, uranium and gold.

Following completion of a data compilation and analysis exercise, Baobab announced two drill targets, the Rio Mufa coal prospect and the more significant Monte Muande magnetite/phosphate target. Drilling was completed at both targets in 2011 with c.2,000 metres completed at the Monte Muande target.

The Monte Muande magnetite/phosphate deposit is located 25km to the northwest of the provincial capital of Tete. The international highway to Zambia passes within 3km of the project. The deposit is hosted in a carbonatite and was explored during the 1980s by the Geological Institute of Belgrade (‘GIB’). GIB completed two phases of vertical diamond drilling between 1983 and 1985 totalling 5,570m, 2,960m of which falls within the Joint Venture area. The institute also completed more than 10km of trenching and bench-scale metallurgical test work.

Using the GIB data sets in conjunction with more recent soil geochemistry and aeromagnetic surveys completed by Omegacorp, consultants Coffey Mining calculated an Exploration Target of 200Mt to 250Mt to an average depth of c.40m below surface. Coffey also carried out a high level review of the GIB metallurgical data which indicated that a magnetite concentrate containing 67% iron (‘Fe’) could be generated via a process of coarse grinding and magnetic separation, followed by regrinding and a flotation circuit to recover a phosphate rock concentrate containing 36% phosphorus (‘P2O5’). Total magnetite and apatite recoveries of 92% and 70% respectively were recorded.

During the latter half of 2011, Baobab completed a c.2,000m diamond drilling campaign at Monte Muande. The programme comprised 10 angled drill holes sited along a staggered traverse transecting the central portion of the deposit. Drilling has intersected broad zones of shallow dipping magnetite and apatite mineralisation. Following analysis by the ALS Chemex laboratory in Western Australia the Company announced significant drill results from magnetite rich intersections, with premium quality concentrate grades of 69% Fe at a mass recovery of 26% (weighted average). The magnetite concentrates are generally very low in deleterious elements with additional test work underway to further improve characteristics. Phosphate mineralisation is ubiquitous with bench-scale test work required to determine quality and yield of a potential concentrate product. The head grades are in line with Coffey Mining’s shallow depth 200Mt to 250Mt exploration target announced in March 2011. The sizing and analysis of trench samples is on-going.

The Rio Mufa prospect includes 12 square kilometres of Lower Karoo lithologies underlying the southwestern corner of licence 1119L. Baobab conducted a scout drilling programme at the Rio Mufa coal target during late 2011, aimed at investigating the coal prospectivity of this section of the Monte Muande licence area. Whilst the scout drilling intersected minor seams of carbonaceous material, these are not deemed to be economically viable. In light of this, Baobab will continue to focus on the development of the area's magnetite/phosphorus mineralisation, which has already demonstrated potential for Direct Shipping Ore and amenity to bulk open pit mining.

Click here to open Baobab Resources website