African Lithium goes for hybrid funding model

Top six countries with the largest lithium reserves in the world

Zim Now Writer

Red Rock Resources PLC, parent company of African Lithium Resources Pvt Ltd, says the latter has been able to self-fund development from its own resources and by raising $240,000 of external funding.

While it has so far raised a further $80,000 of external finance for the development into small-scale production of one of its lithium assets, the forecast is that at the conclusion of this funding round, RRR’s ownership of ALR will be about 50% .

An Environmental Impact Assessment is now being prepared for ALR's Tin Hill property, 29 kilometres North-West of Bikita in South-East Zimbabwe. This is expected to be completed by early February, 2023, and the process of preparation of the site for mineral extraction and sale is expected to be completed some two weeks later.

A further EIA may then be prepared for a second operation on its Beatrice site where there are lithium ore stockpiles and test results have been positive.

The initial plan is to produce and sell Lithium ore with a target grade of 2% (1.5%-3%) into the local market, on a pick-up basis and with a seven-day sales-to-payment cycle. When the operation has been stabilised, ALR plans to introduce a flotation unit in order to beneficiate the ore to 4.5%-5%, so that it may be sold into the export market. There are no immediate plans to delineate a mineral resource estimate, the company said.

Red Rock chairman Andrew Bell said in a statement: "Our local partners and staff at ALR have in the past brought small mineral deposits into test production in Zimbabwe, and this local knowledge complements our existing expertise as we accelerate progress on this project. We plan initially to exploit the top 10 metres of the pegmatite, selectively mining for saleable grade as we build experience.

"ALR will be moving into small-scale trial production without having carried out extensive drilling or produced a full feasibility study. The purpose of such programmes is usually to protect the investment of considerable sums of capital, including that by third parties, by increasing as far as possible certainty in regard to the grade and extent of mineralisation.

"In this case the mineralised structure is simple, the mineralisation is from surface, the capital commitment is small, and our investors have assessed the risks. Grade control will be key to getting the full benefit of the investment, but we will be working on the ground with our team.

"Our aim is to have once again a cash flow generative project in Red Rock, which will provide an internal source of funds as we move through what has become a difficult market for explorers, and so help to reduce our dependence on capital markets."

Red Rock Resource is an AIM-listed metals exploration company which currently has gold exploration projects in Kenya, West Africa and Australia, copper/cobalt exploration in Congo, and lithium exploration in Zimbabwe.