Mabwe Minerals Inc. (MBMI) Well-Positioned Barite Supplier in Growing Southeast Africa Oil Extraction, Broader Footprint Extremely Stable

Mabwe Minerals is developing premium quality API-grade (American Petroleum Institute) barite in Zimbabwe at their Dodge Mine site, which is riddled with multiple deposits of barite, as well as limestone and talc, in addition to featuring widespread gossan deposit occurrences that have been surface tested to contain copper, gold, lead, nickel, and zinc. MBMI’s local affiliate, Mabwe Minerals Zimbabwe, owns 100% of the mineral rights for the Dodge Mine and with no other major sources for barite in the region, the company stands poised to execute a brilliant, geographically-enhanced production and distribution strategy for this increasingly sought after mineral.

An essential material for drilling mud weighing agents used in the oil extraction space (roughly 80% of overall consumption), barite finds immediate markets in the Middle East and Europe, as well as Central and South Africa. Mabwe’s strategic partnership with the biggest grain importer in Harare, PHI Commodities, gives the company direct access to the Port of Beira to the east in Mozambique, with exclusive outbound load rights from the Shamva Rail Depot (up to 160k tons annually) using PHI’s fleet of National Railways of Zimbabwe-managed, non-stop express train-supported rail wagons. This is an incredibly fortunate situation for MBMI as Mozambique ramps into oil production this year with Statoil ASA tapping a small oil pocket found near the sprawling Temane gas field in Inhambane province. A still largely unexplored sedimentary basin with an active petroleum system, where the biggest gas finds of the century have been made (over 100 trillion cubic feet discovered offshore by Anadarko), Mozambique is an emerging oil development frontier and as those oil discoveries are made, MBMI will be right nearby, sitting on a huge supply of barite. Targets like the deepwater Rovuma basin and offshore Zambezi basin hold tremendous promise for future oil production, with the Beira High and Mozambique basin also prominent targets.

Dodge Mine also hosts some exceptional grade barite, which easily demands top sale prices due to how necessary and virtually irreplaceable the material is for certain high-end applications in paint additives, as well as in select heavy-duty concretes. More standard barite applications in automotive fillers, dielectrics, electro-ceramics, and medical barium represent a smaller portion of the overall end market, but this segment is growing fast. Mounting overall demand for barite from the globally burgeoning oil extraction market, plus the top dollar-fetching exceptional grade barite market dynamics, collectively spell big success for MBMI moving forward and with the historical 15-year supply figure for barite at the Dodge Mine substantiated by ASCON Africa’s more recent validation study, showing around 411k tons of barite and another 531k tons of limestone reserves in less than 7% of the property, the company has a bright future as a key supplier to regional markets. Limestone from the Dodge Mine will feed southern Harare’s ongoing construction boom and this supply chain dovetails nicely with other recent moves made by MBMI’s parent company, Raptor Resources Holdings Inc. (OTCQB: RRHI).

RRHI recently announced wrapping of their 100% acquisition of the nearby Derbyshire Stone Quarry (in Waterfalls, Harare) via the Zimbabwean affiliate (TAG Minerals Zimbabwe) of RRHI’s wholly-owned operating subsidiary, TAG Minerals Inc. The Derbyshire Stone Quarry is a well established volume producer and the biggest indigenous sand and stone quarry in the Harare region. Currently being operated by the company’s (25% equity owned) strategic partner, local 59-year construction and mining veterans WGB Kinsey & Company, the quarry has been doing quite well in recent years and returned a 32% jump in revenues for 2013 when compared with the prior year, bringing in just under $3M according to the unaudited financials. Producing a range of high-quality, low-cost granite 10mm and 20mm (3/4) stone, as well as crusher run, decomposed granite, quarry dust, river (washed) sand, and pit sand, the Derbyshire Stone Quarry is a solid asset for RRHI that reinforces the company’s overall operational objectives for the region. Harare is a thriving residential growth zone and there is an abundance of local end markets hungry for the Derbyshire’s output, including major road projects in close proximity, like the $1B Harare-Beitbridge highway expansion just northwest of the quarry.

The Derbyshire acquisition gives RRHI a nice foundation for executing their regional strategy, with a steady stream of predictable revenues that will help fund development of the primary barite and limestone targets at MBMI’s Dodge Mine site, as well as funding TAG’s development of the adjoining nickel-rich Raptor Mine (100% of mineral rights owned by TAG Minerals Zimbabwe), acquired back in February 6 of this year. This final key acquisition in the company’s acreage expansion puts RRHI in control of 1,188 acres across the entire three-mountain Dodge Mine range, spanning from the Raptor Mine in the west to the Dodge Mine in the east. MBMI has been set up for success quite well by RRHI and as energy recovery dominates the horizon more and more for both the region and the globe, the ready supply of barite coming out of the Dodge Mine will likely drive MBMI shareholder value to new highs.

For more info on Mabwe Minerals, please visit www.mabweminerals.com

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