First Bauxite Corporation announced that its subsidiary, Guyana Industrial Minerals Inc. (GINMIN), has received additional orders from customers in China and Europe for bauxite ore. The Company expects the first bulk shipment to Europe of 5-10,000 metric tonnes to occur in June/July 2018 and the second bulk shipment to China of 10,000 metric tonnes to occur in September 2018. The orders are a result of the Company’s product and market development initiatives to sell its high-quality bauxite ore in an improving market to produce sintered refractory grade bauxite. The Company's recently completed trial production tests indicate the final sintered product will have an Al2O3 content > 92.0%, a Fe2O3 content < 0.5% and a BSG > 3.25/g/cm³.
As disclosed previously, the Company was granted approval by the Government of Guyana to ship up to 40,000 metric tonnes of bauxite ore in 2018 for product and market development. Small scale production trials at Bonasika began recently using contract mining and further beneficiation of the ore in the Company’s pilot trommel wash plant.
The Company has conducted an internal strategic review of its feasibility study issued in August 2015 (the “Feasibility Study”). The strategic review supports a strategy of focusing on a DSO project initially by accessing the significant idle kiln capacity that is available in the major market regions of Europe, China and USA to produce ultra high strength proppants (UHSP) products for the oil and gas market and also sintered bauxite products for the refractory market. A decision to construct a downstream processing plant in the USA has been deferred for the time being. The mineral resource estimates and probable reserve estimates remain largely as reported in the Feasibility Study.
The Company is continuing to seek financing for the full development of its Bonasika project in Guyana, which is expected to initially operate as a DSO project. The Company has received a US$5 million bridge loan from Resource Capital Fund VI L.P. (“RCF VI”), all of which has been drawn from RCF VI. The Company has had ongoing discussions with potential lenders related to obtaining additional financing and has had discussions with its current lenders about refinancing or extending the maturity of its current debt, all of which matures on June 30, 2018. The Company’s ability to execute its work plan, meet its administrative overhead obligations, discharge its liabilities and fulfill its commitments as they come due is dependent upon its ability to obtain additional debt or equity financing and, ultimately, on achieving future profitable operations. While the Company has been successful in the past, there can be no assurance it will be able to do so in the future. Pending receipt of such financing, the Company’s objective would be to commence full scale mining operations in 2H 2019.
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