Baobab has released its independent consultant Coffey’s assessment of the Exploration Target at its Monte Muande magnetite/phosphorus joint venture project, which is 203-250Mt at a grade of up to 15% (cf our estimate of c 220Mt [±55%] at a grade of c 20% Fe). However, Coffey’s assessment only considered mineralisation to a depth of 40m (the limit of previous drilling) and it notes that “it is reasonable to assume that deeper drilling will encounter further mineralisation”. It also indicates an upper 7% grade limit for phosphate rock (where 1% phosphate is approximately the equivalent to 1% Fe in value), suggesting that a combined magnetite/phosphate operation may be viable. Finally, it highlights the existence of 3-5Mt of eluvial material (grade 45-55% Fe), which could potentially be upgraded to a direct shipping ore (DSO) product to provide early positive cash flows in any subsequent development.

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