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
About QualityStocks
QualityStocks
is committed to connecting subscribers with companies that have huge potential
to succeed in the short and long-term future. We offer several ways for
investors to find, evaluate, and learn more about investing in these companies.
