Path Proposed Transaction to acquire 100% of Fine Gems Extraction Corporation (FGE)
Path Investments has a corporate objective to acquire natural resources production or near production assets.
The recent opportunity to acquire FGE meets this objective and brings with it:
- 75% ownership of a Manganese Ore and Tourmaline Mining license in Zambia
- Material resources of both Manganese Ore and Tourmaline
- Rapid deployment of capital with attractive risk-adjusted returns and short payback periods
- Additional upsides beyond established resources.
Following the acquisition - the proposed project has been split into 2 stages:
- Phase I - Manganese ore production to commence by month 4, with first sales revenue by month 6.
- Phase II - Tourmaline production targetted to commence by month 8, and first sale projected by month 17.
Manganese ore rock samples tested have a relatively high degree of purity (52% vs. market standard high grade ore of 44%). Initial estimates of the resource indicate that there are at least 4 mm metric tonnes of manganese ore in place (equivalent to 147 years of production), but could be as much 15.4 million tonnes (equivalent to 580+ years of production).
A marketing and sales agreement will be completed imminently with an established metals trading firm to monetise the manganese ore at market prices less transport, storage costs and marketing commission.
The revenues and cashflow initially generated from the manganese ore sales will be re-invested in the tourmaline development.
Manganese Opportunity Overview
- Initial technical resource estimate indicates anywhere from 4 mm metric tonnes (“mt”) to 15.4 mm mt of resource in place in the 3 manganese bearing areas of the license. A complete CPR will be prepared in due course to certify the resource
- Nearly 4.5 years of licence term remaining (licence expires Nov. 2023, but will be extended subject to meeting certain criteria)
- A very simple, shallow open-pit mining process with limited scale and low costs
- Expected annual production of c.14,000 mt per year in the first year rising to 27,000 mt in the second year
- Manganese ore production is required for the first 2 years to bridge the revenue gap to the first sale of tourmaline, but the licence area will produce for at least 147 years at its plateau annual output of 27,000 mt
- With additional investment, production could be ramped-up to at least 160,000 mt per year and potentially - if the resource in place is at the higher end of the inferred range- an annual production of up to 600,000 mt might be possible. At that level of output, Jagoda would join the top tier of high grade manganese ore producers with a material share of the global high grade (over 48% purity) manganese ore market.
Tourmaline Opportunity Overview
*The two mining activities will be physically separate, but can share facilities, infrastructure, equipment, staff and management as well as corporate overhead.
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Path Investments plc (“Path”) is a LSE Standard Listed company, focused on the natural resources sector. Its corporate objective is to acquire natural resources production or near production assets:
- Invest and manage a portfolio of income-generating assets with development upside
- Long-life assets with corresponding cash-flows and limited execution risk
- Offer a premium dividend yield
Ordinary Shares currently suspended pending a Reverse Takeover and Fundraising.