Kabanga Definitive Feasibility Study Nearing
Completion; Expected in September
Webcast Today at 10.30 AM ET
Lifezone Metals Limited’s (NYSE: LZM) Chief Executive
Officer, Chris Showalter, and Chief Financial Officer, Ingo
Hofmaier, are pleased to provide an update on recent activities at
Lifezone’s projects and its H1 2024 unaudited financial
results.
Lifezone continues to progress its Kabanga Nickel Project,
located in north-west Tanzania, through a strategic partnership
with the Government of Tanzania and BHP. Kabanga is believed to be
one of the world's largest and highest-grade undeveloped nickel
sulfide deposits. In addition, Lifezone continues to advance its
partnership with Glencore to recycle platinum, palladium and
rhodium in the United States.
Highlights:
- +2 million hours worked at the Kabanga Nickel Project without a
lost time injury.
- Design and engineering completed for the Kabanga Nickel Project
Definitive Feasibility Study, which remains on track for completion
by the end of September.
- The Project’s capital and operating expenditures estimates are
currently being finalized, based on an initial 1.7 million tonne
per year Phase 1, plus additional 1.7 million tonne per year Phase
2 expansion, for a combined 3.4 million tonne per year underground
mining operation, concentrator and Hydromet refinery.
- The Kabanga Nickel Project is expected to be a fully integrated
mine-to-metal operation that will enable a fully auditable supply
chain with production of refined, LME-grade nickel, copper and
cobalt metals in Tanzania.
- Production of first nickel, copper and cobalt metal cathode
samples from Kabanga source material via the semi-continuous
Hydromet pilot program at Lifezone’s Simulus Labs in Perth,
Australia.
- Infrastructure build-out in Tanzania continues with notable
recent developments, including:
- Inaugural Standard Gauge Railway service between the port city
of Dar es Salaam and the city of Morogoro began in June, and the
upgraded rail connecting Morogoro to Tanzania’s capital city of
Dodoma was completed in late-July. 1
- The Tanzania Electric Supply Company Limited (“TANESCO”) has
started generating surplus electricity at the Julius Nyerere Hydro
Power Project after switching on Turbine #7 at the facility,
located in eastern Tanzania. Once all nine turbines are
operational, it is expected to generate ~2.4 gigawatts of green
electricity into the national grid.2
- To date, Lifezone has achieved 95% completion of compensation
payments to those persons physically and economically displaced by
the Kabanga Nickel Project.
- Pilot work and Feasibility Study for the Phase 1 partnership
with Glencore to recycle platinum, palladium and rhodium from spent
automotive catalytic converters in the United States is progressing
well with planned completion in Q4 2024.
- Healthy cash position of $63.5 million as at June 30,
2024.
- Basic and diluted loss per share of $0.14 for H1 2024, compared
to basic and diluted loss per share of $0.18 in H1 2023.
Mr. Showalter stated: “Completing the design and engineering
phase of the Definitive Feasibility Study for the Kabanga Nickel
Project marks a pivotal milestone, bringing us another step closer
to our goal of establishing a fully integrated mine-to-metal
operation in Tanzania. We are dedicated to continuing our
collaboration with BHP and the Government of Tanzania to drive
sustainable development and prosperity.”
More than 2 million hours worked without lost time injury at
the Kabanga Nickel Project
Lifezone operates with safety as an ongoing, front-of-mind
initiative at every level. Achieving 2 million hours worked without
LTI reflects Lifezone’s commitment to create a safe working
culture, promoting and implementing comprehensive workplace health
and safety measures, which include rigorous monitoring and
reporting systems.
Kabanga’s Definitive Feasibility Study progresses towards
completion in September
In June, Lifezone completed the design and engineering phase of
the Definitive Feasibility Study for the Kabanga Nickel Project,
meaning that the Project’s flowsheet parameters and specifications
are now final for the Study and not open for additional revisions.
This includes the sizing of critical pieces of equipment, such as
underground mining fleet, crushers and mills, flotation tanks and
autoclaves. With these technical requirements locked in, Lifezone
is now focused on reviewing equipment and services suppliers,
finalizing the operating cost model and optimizing capital
expenditures.
The two-phased development plan for the Kabanga Nickel Project
was finalized in Q1 2024 and forms the basis of the mine plan and
ultimately the Definitive Feasibility Study. The plan calls for a
1.7 million tonne per year Phase 1 underground mining rate, with an
additional 1.7 million tonne per year Phase 2 expansion, for an
expected 3.4 million tonne per year operation in the aggregate.
Operating cash flows from Phase 1 operations are expected to help
cover the capital requirements for Phase 2.
Finished nickel, copper and cobalt metal cathode samples
produced at Lifezone’s laboratory
As announced in July, Lifezone has produced nickel, copper and
cobalt cathode samples via the semi-continuous pilot scale refinery
test work underway at the Company’s Simulus Laboratory in Perth,
Australia. The metals were produced from flotation concentrate
derived from borehole core samples at the Kabanga. This milestone
marks the first metal ever produced from Kabanga mineralization
since the deposit’s initial discovery in 1975 by the United Nations
Development Program.
Tanzanian infrastructure build-out – progress in rail
connectivity and clean hydropower generation
Kabanga stands to benefit from significant investments being
made into Tanzanian infrastructure. Recently, notable progress was
demonstrated in both rail and power.
Rail
Inaugural Standard Gauge Railway service began in June between
the port city of Dar es Salaam on the Indian Ocean and the city of
Morogoro, covering approximately 300 kilometers. This marked the
completion of Phase 1 of the Standard Gauge Rail construction
project. The Phase 2 project was completed in late-July, connecting
Morogoro to Makutupora, located just outside Tanzania’s capital
city of Dodoma, adding another approximately 420 kilometers. The
Standard Gauge Rail project is a nation-wide upgrade of the
existing metre gauge rail system connecting Dar es Salaam to the
city of Mwanza, located on the shore of Lake Victoria in northern
Tanzania.
Construction of Tanzania’s Standard Gauge Rail is comprised of
six total construction phases, with a scheduled end-date in 2026.
The Standard Gauge Railway system uses electric locomotives to move
trains carrying cargo and passengers that can travel at a speed of
160 kilometers per hour (~100 miles per hour). The Kabanga
Nickel Project stands to significantly benefit from this important
national project, which will connect the Hydromet refinery at
Kahama to the port of Dar es Salaam. The Definitive Feasibility
Study will contemplate truck transport of concentrate from the
Kabanga site to the Hydromet refinery in Kahama, a distance of
approximately 350 kilometers, with the produced refined nickel,
cobalt and copper being sent via rail to the port of Dar es
Salaam.
Future expansions of the Standard Gauge Rail system could
include a branch to the neighboring country of Burundi, which would
likely pass near to the Kabanga site and potentially eliminate the
need for road haulage between Kabanga and the Hydromet refinery at
Kahama.
Power
The Tanzania Electric Supply Company Limited (“TANESCO”) is now
generating surplus electricity at the Julius Nyerere Hydro Power
Project after switching on Turbine #7. Under construction since
2019, the Julius Nyerere Hydro Power Project began generating clean
hydroelectric power in Q1 2024. It is now nearing completion with a
total of nine turbines set to generate approximately 2.4 gigawatts
of green electricity into the national power grid.
Regular access to clean, green and reliable power is important
for the Kabanga Nickel Project, with the Julius Nyerere Hydro Power
Project being one of three hydroelectric plants that form part of
Tanzania’s Power System Master Plan. In addition, there is the
80-megawatt Rusumo Hydroelectric Power Station (commissioned in Q4
2023) and the 88-megawatt Kakono Hydroelectric Power Station
(scheduled for late-2028).
As announced in Q1 2024, TANESCO completed construction and
installation of a 33-kilovolt power line connecting the Kabanga
Nickel Project operations camp to the national power grid. With
reliable grid electricity, Kabanga has been able to end its
reliance on more emissions-intensive diesel generators.
Close collaboration with all Kabanga Nickel Project partners
and stakeholders continues
Key to moving the Kabanga Nickel Project forward is close
collaboration amongst all project partners and stakeholders. To
this end, regular meetings have been held between Lifezone, BHP and
the Government of Tanzania from May to finalize the Joint Financial
Model. This is based on the technical parameters determined through
the Definitive Feasibility Study, and forms the basis of the
sharing of the economic benefits between Lifezone and BHP, as the
funding shareholders, and the Government of Tanzania – as outlined
in the Framework Agreement signed in January 2021. It is also the
basis for the valuation of BHP’s potential T2 option earn-in post
Definitive Feasibility Study completion.
The Government of Tanzania has a 16% free-carried interest,
while BHP currently has a 14.3% indirect interest in the Kabanga
Nickel Project with an option to increase its indirect ownership to
51% following completion of the Definitive Feasibility Study and
the Joint Financial Model.
Compensation payments largely completed to those persons
affected by the Kabanga Nickel Project
With the future construction of the Kabanga Nickel Project,
within the Special Mining Licence 349 local households will be
physically impacted (i.e., houses and land title impacted) and 990
will likely be economically impacted (i.e., land title impacted).
In 2023, Lifezone worked proficiently to update and improve a
previous 2013 Relocation-Resettlement Action plan, and the Lifezone
Resettlement Action Plan was submitted to the Tanzanian Ministry of
Minerals in August 2023.
By the end of 2023, Lifezone achieved key resettlement
milestones, including obtaining the Tanzanian Chief Government
Valuer sign-off on the compensation schedule and valuation for land
acquisition and relocation.
The initiation of compensation payments to affected households
commenced on November 6th, 2023, and payments are 95% complete to
date, with the aim to complete the remaining affected households as
soon as possible. To date, a total of TZS 26.7 billion (US$10.5
million) was paid to 1,260 affected households. Our community team
is actively engaged in identifying and supporting community members
who have not received their payments, often related to missing
documentation. The completion of compensation payments will give
Lifezone legal surface title to the entire ~4,300 hectares of the
Kabanga Special Mining Licence area.
In June, the resettlement model houses showcase began, and five
model houses have been built following discussions with affected
persons. Households that will be physically displaced by the
Kabanga Nickel Project are entitled to select from one of two
different styles of replacement house. Those who will be affected
have participated in a process of balloting for preferred
resettlement sites, as well as selecting and influencing the
housing materials, structures and design. Feedback following the
initial showcase is being addressed ahead of final construction and
relocation. Lifezone will build approximately 410 new houses for
resettlement at land selected in cooperation with government and
local working groups.
Sustainability is a foundational consideration in all
decisions taken by Lifezone
Lifezone’s sustainability strategy encompasses all global
operations, including Tembo Nickel (Lifezone’s Tanzanian
subsidiary), Lifezone Asia-Pacific and its subsidiary operations
(in Perth, Australia), Lifezone Recycling (USA) and Lifezone’s
corporate office in London. The primary focus has been on the
environmental, social and development plans at the Kabanga Nickel
Project.
In Tanzania, our shared goal is for in-country beneficiation,
enabling Tanzania to achieve value creation and realize benefits
from the full supply chain: from mining through to finished metal.
With the application of Lifezone’s Hydromet Technology, the Kabanga
Nickel Project is expected to produce a greener, cleaner metal
product in Tanzania, by Tanzanians. Recent sustainability-related
highlights include:
- Early implementation of Sustainability Accounting Standards
Board reporting, focusing on data gathering for the most relevant
and material sustainability impacts.
- Continued monitoring of sustainability-linked risks and
identification of opportunities.
- Lifezone has engaged Minviro Ltd. – a leading Life Cycle
Assessment consulting firm, based in London, UK – to conduct a Life
Cycle Assessment of the Kabanga Nickel Project utilising the data
derived from the Feasibility Study. This will involve an analysis
of the various project impacts, from planned extraction through to
the production of finished metals. Additionally, Minviro will
conduct a second Life Cycle Assessment of our planned platinum,
palladium and rhodium recycling project in the US. The goal is to
complete both Life Cycle Assessments in early 2025.
- The 2024 Social Investment and Corporate Social Responsibility
plan for Kabanga was completed in Q2 2024 and has been submitted to
the District Council in July 2024, with the signing ceremony
planned for Q3 2024. This year’s Plan continues to specifically
focus on health and education in project affected communities.
- The Tanzanian National Environment Management Council visited
the Kabanga Nickel Project in June as part of their review of the
Environmental Impact Assessment for proposed developments within
the designated resettlement sites. Receipt of the approved
Environmental Impact Assessment for resettlement is expected in Q3
2024.
- Eight water boreholes were drilled and completed at the
resettlement sites, which have confirmed sufficient clean water is
available for community use. Initial testing has indicated high
water quality, and sampling and monitoring remains ongoing.
- The Local Skills and Supplier Mapping Roadshows completed in
2023 have provided Lifezone with a database of local skills and
service providers within neighboring communities. Through the
active use of this database, Lifezone has engaged and employed +420
local short-term workers in H1 2024. As a specific example,
Lifezone facilitated a contract between two local farming
cooperatives and the principal food vendor for the Kabanga
camp.
Healthy Financial Position
As of June 30, 2024, Lifezone Metals had unaudited interim
consolidated cash and cash equivalents of $63.5 million, a decrease
of $16.1 million from $79.6 million as of March 31, 2024. The
decrease reflects cash usage of $21.0 million, partially offset by
$4.9 million of proceeds from the 2024 convertible debenture
placement that were received in April.
As of June 30, 2024, a total of $10.4 million was spent on
compensation payments for those households that will be physically
or economically displaced by the Kabanga Nickel Project. This
activity started in November 2023, with $2.2 million spent to
December 31, 2023 and $8.2 million spent from January 1, 2024 to
June 30, 2024, resulting in 94% of the compensation payments
completed by the end of Q2 2024. Since H1, an additional
compensation payment has been made and as of August 19, 2024, total
compensation since initiation amounted to $10.5 million, taking
compensation payments to 95% complete.
TODAY: webcast with Lifezone’s senior management at 10.30 AM
ET
The Company invites shareholders, investors, and members of the
media to join the executive team for a virtual presentation and
discussion of Lifezone’s recent activities, H1 financial statements
and outlook. The presentation will be followed by a Q&A session
where participants can engage directly with senior management.
Event details:
- Date: Monday, August 19, 2024
- Time: 10:30 AM Eastern Time
- Location: Virtual (please click the webcast registration
link).
The presentation slides will be available on Lifezone’s website.
The webcast will be archived and accessible for replay for a
limited time after the event.
If you would like to sign up for Lifezone Metals news alerts,
please register here.
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About Lifezone Metals
At Lifezone Metals (NYSE: LZM), our mission is to provide
cleaner and more responsible metals production and recycling. Using
a scalable platform underpinned by our Hydromet Technology, we
offer the potential for lower energy, lower emission and lower cost
metals production compared to traditional smelting.
Our Kabanga Nickel Project in Tanzania is believed to be one of
the world's largest and highest-grade undeveloped nickel sulfide
deposits. By pairing with our Hydromet Technology, we are working
to unlock a new source of LME-grade nickel, copper and cobalt for
the global battery metals markets, to empower Tanzania to achieve
full in-country value creation and become the next premier source
of Class 1 nickel. A Definitive Feasibility Study for the project
is due for completion in Q3 2024.
Through our US-based, platinum, palladium and rhodium recycling
partnership, we are working to demonstrate that our Hydromet
Technology can process and recover platinum group metals from
responsibly sourced spent automotive catalytic converters in a
cleaner and more efficient way than conventional smelting and
refining methods.
www.lifezonemetals.com
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1
https://www.tanzaniainvest.com/transport/inaugural-sgr-train-service-dar-es-salaam-morogoro
2
https://www.ippmedia.com/the-guardian/news/local-news/read/tanesco-fields-700mw-surplus-as-jnhpp-switches-on-turbine-7-2024-06-22-040656
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version on businesswire.com: https://www.businesswire.com/news/home/20240819646238/en/
Investor Relations – North America Evan Young SVP:
Investor Relations & Capital Markets
evan.young@lifezonemetals.com Investor Relations – Europe
Ingo Hofmaier Chief Financial Officer
ingo.hofmaier@lifezonemetals.com Media Enquiries David
Petrie Manager: Corporate Communications
david.petrie@lifezonemetals.com
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