Baobab has, this week, released the details of historic exploration results relating to its Monte Muande magnetite/phosphate joint venture. The results of the 28 drill holes and 38 trenches completed on the project by the Geological Institute of Belgrade (GIB) in the early 1980s demonstrated grades as high as 67.7% Fe and aggregate widths as high as 214m. The absence of systematic sampling and wide drill hole and trench spacing suggests that relatively little of GIB's data would yet support a JORC code-compliant resource. Consultants have been commissioned to estimate an Exploration Target and to conduct preliminary investigations into potential mineral processing flow sheets to generate discrete magnetite and phosphate concentrate products. Nevertheless, given the data presented, we estimate that Baobab could potentially declare an immediate resource of c 13.7Mt at 40.9% Fe and a c 220Mt exploration target. At an industry average valuation, such a deposit would be worth an immediate c US$19.8m to Baobab, or 7.1c (4.5p) per share for its 60% interest in the project.

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