Lindian clinches Guinea approval for bauxite asset deal

ASX-listed West Africa bauxite player, Lindian Resources, has been given the all-clear from the Guinean Ministry of Mines to finalise the acquisition of a 75 per cent interest in the massive, undeveloped Lelouma bauxite project in Guinea.

The Perth-based junior is set to assume the 75 per cent stake in Lelouma’s overarching ownership vehicle, Sarmin Bauxite, and take over operational control of the project, pending one final condition.

Lindian shareholder approval, to be sought at its annual general meeting this month, is the last hurdle to be cleared before the company secures the asset.

Last month it reported a significant increase in the mineral resource estimate for Lelouma to an imposing 900 million tonnes grading 45 per cent aluminium oxide.

The updated measured, indicated and inferred resource numbers, which contains a higher-grade component of 398 million tonnes going 48.1 per cent aluminium oxide, were arrived at after consultants went through a pile of historical exploration and drilling data and the results of Sarmin’s 2020 drilling program totalling 4,000m.

According to Lindian, more than US$10 million of previous exploration expenditure has been sunk into Lelouma by previous owner Mitsubishi Corporation as well as Sarmin.

Lindian Resources Chairman, Asimwe Kabunga said: “Lelouma is a Tier 1 bauxite asset and it complements our Woula and Gaoual projects and also our strategy to identify low CAPEX solutions to commence DSO (direct shipping ore) bauxite production.”

Lelouma sits just 40km from Lindian’s high-grade Gaoual conglomerate bauxite project, with both projects located within trucking distance of established haul road and rail infrastructure and related bulk shipping ports.

The company suggests the mature bauxite industry and infrastructure in Guinea present the potential to fast-track development of a bauxite mining, first-stage processing and export operation that comes with modest CAPEX and operating costs.

Helping the financial case is the Guinea Government’s strict policy of allowing third-party sharing of the infrastructure.

Lindian is contemplating an incremental growth and development strategy that may even factor in possible joint ventures as it weighs up the multiple avenues of extracting maximum value from its three key bauxite projects in Guinea. In some ways, it is spoilt for choice.

The smaller, 19-million-tonne Woula bauxite project near the coast may open the door to a doable economic development in the near term.

Guinea, which according to the US Geological Society hosts the largest bauxite reserves in the world, accounts for approximately 95 per cent of bauxite exports out of Africa. It exported 66 million tonnes to China last year.

Is your ASX listed company doing something interesting? Contact: matt.birney@businessnews.com.au