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Sunday, 17 March 2019 16:08

PROJECT BERYLLIUM NIGERIA

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PROJECT BERYLLIUM NIGERIA

 

Synterra have acquired beryllium exploration licenses in Gwantu, Kaduna State which give us exclusive exploration rights for beryllium, acquamarine and emaralds.

 

It is the intention of Synterra  to  Identify a suitable off-taker in the PRC for its beryllium production in Nigeria. Synterra also seek to explore the feasibility  of entering into  a contractual relationship with a suitable smelter (and/or) Refiner. This would take the form  of  a term contract for the off-take or smelting of produced beryllium. We are also prepared to contemplate   joint venture  or special purpose vehicle structures where such relationships might be efficient in adding value to mining projects.

 

 OVERVIEW

 

 Synterra have entered  into formal partnership ventures with established indigenous local Mining concerns in Nigeria. As a consequence Synterra Energy Assets own a number of beryllium prospects with the capacity to currently  produce over 100 metric tons per month. Synterra have further leases pending which will increase our capacity to over 200 metric tons per month. In addition to the production directly under Synterra’s control we are in advanced negotiations with artisanal miners to purchase and aggregate local production of beryllium.

 

 Through Synterra’s controlling  interest in Phitex Petra Trading (Nig) Ltd  we have acquired a number of  mineral concessions  from the government of the Federal Republic of Nigeria in accordance with the 2007 Mining and Minerals Act

 

 The leases are for the exploration and mining of the following minerals

 

 Beryllium

 

Emeralds

 

Aquamarine

 

Rutile.

 

 Geophysical and geological interrogation  undertaken by Synterra’s geologists has ascertained the existence of Beryllium  ore in commercial quantities of circa 10% grade. Further samples have been independently assayed and  provide material with an average of 8-10% contained purity of beryllium oxide. It is this material Synterra seek to process.

 

 Initially Synterra are able to deliver the material on a DAP basis to any port in the PRC. Under a simple Sales and Purchase Agreement (SPA) It is our intention to enter into the sort of arrangement that will allow us to obtain full value for the material. Our preference will always be to interact directly with refiners and smelters as this obviates the need for us to surrender margin to superfluous links in the supply chain.

 

Synterra are committed to carrying out a fully code compliant resource estimate on the various beryllium deposits in our portfolio. It is our intention to obtain an enterprise value for the beryllium deposits we own. This would further enable us to access funds either as debt or equity. Such equity would be originally private with a listing as an option for exit. We would also consider the option of allowing our off-takers to acquire stock in the company.

 

 The significance of our strategy is that it provides for the possibility of a smelter or refiner obtaining an ownership or economic interest in our leases. In the event were that to happen Synterra would achieve its objective of selling its production at full market price.

 

 The process of identifying  a suitable counterparty is ostensibly a financial tender. That  is to say the ideal counterparty is the company that is prepared to pay the highest price for the material. Such a counterparty should have a payment formula which incorporates both the grade and the refining cost (and any refining loss). This means we should be able to  obtain a purchase price from the off taker basis the beryllium content of the material. In effect we should be able to obtain a provisional price. For example using 10% beryllium oxide as the benchmark, what price would such material attract?. What would be the refining costs per metric ton and the likely terms and conditions of such a transaction.

 

 CONCLUSION

 

 The broad objective is to obtain commercial terms for the supply of beryllium to off-takers in the PRC. To obtain a clear understanding of the market for beryllium in the PRC  and resolve what appears to be a market disconnect between the price paid for raw 10% material and the refined >99% material. It has been our understanding that pure beryllium has a market value in excess of $600,000 per metric ton. In such an undertaking it is prudent for us to work on the basis  that the material  we produce  is between 8-12% contained

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