Millennial Potash has recently initiated exploration and development at its Banio potash project in Gabon. Why did Millennial choose Gabon for its potash project?
Millennial has a track record of efficiently advancing projects by identifying and acquiring previously explored sites in favourable jurisdictions. The Millennial Potash team always conducts thorough due diligence not only on a potential project, but also on the country where the project is located.
Gabon is one of the wealthiest nations in Africa, with a strong resource-driven economy. It has also recently revised its mining laws to attract significant investment to its mining industry.
That’s why Millennial felt Gabon was the right jurisdiction to focus on, in addition to the Banio potash project being previously explored, with a huge resource potential within a proven potash-bearing basin.
The resource itself exhibits characteristics conducive to a low-cost solution mining method, further enhancing the project’s economic viability. The location on the coast should also contribute to the lower shipping costs.
Finally, Gabon’s proximity to major global importers enhances Millennial’s market position, showcasing a strategic choice that reflects Millennial’s dedication to innovation, sustainability, and potential market growth.
What stage is Millennial Banio potash project at? Have exploration results to date been encouraging?
The project is currently at an exciting stage of exploration and development, marked by significant progress and promising early exploration results. In the third quarter of 2023, extension to ‘drillhole Ba-002’ proved to be particularly fruitful, intersecting two new high-grade seams, each exceeding 4m in thickness.
This drill hole has significantly increased total thickness of the potash deposit in this part of the project, reaching 80m in thickness. Recent exploration results were incorporated into a maiden indicated resource of over 657Mt grading 15.9 % KCl and an inferred resource of 1.16Bt grading 16% KCl that was announced recently in January 2024. Contained potash within the maiden resource also amounts to over 270Mt, surpassing expectations.
With nearly 80m thick of cumulative potash horizons within the mineral resource area, the project demonstrates substantial potential for long-life solution mining caverns.
Importantly, the resources are in only a small part of the North Target. There is a significant upside potential at the North Target with further drilling. There is also strong potential to expand resources at the South Target with thick potash horizons interpreted from down hole geophysics in historic drillholes.
What type of mining scenario is envisioned for the project? Why is solution mining the preferred extraction method?
Millennial envisions the Banio potash project adopting solution mining as the preferred extraction method. This method is favoured for its efficiency and versatility in exploiting several potash-bearing layers through a single well for injection and extraction.
Unlike conventional underground mining, solution mining offers the advantage of lower capital expenditures (capex) resulting in an attractive option for resource extraction. Additionally, the modular nature of solution mining permits the project to be developed in stages, providing production flexibility.
Solution mining is also one of the most environmentally friendly production methods. This adaptability aligns well with Millennial Potash’s strategic vision for the project, emphasizing a cost-effective and environmentally conscious mining solution.
While Africa is not a significant potash consumer, will Millennial Potash target the African market? Would the addition of this potash to the agricultural sector improve food security across the continent?
In fact, the company strategically targets the African market with its Banio project, recognizing that there is no potash production in Africa. The project, uniquely positioned on the Atlantic coast, boasts low transportation costs and easy access to a port, overcoming challenges faced by other African projects.
Introducing Banio’s potash to the agricultural sector could transform food security in Africa, streamlining distribution and enhancing agricultural productivity. By providing local farmers with affordable essential nutrients, the initiative has the potential to significantly contribute to increased yields and improved crop quality, addressing food security challenges, and fostering sustainable agricultural practices throughout the continent.
What additional markets will be served by Millennial Potash’s product? What advantages does Millennial’s Banio project have over suppliers from other jurisdictions?
Banio presents a unique advantage in the potash industry. Gabon’s proximity to major importers such as Brazil, North America, India, and China favourably positions MLP in the sector. This geographical advantage allows for more efficient transportation and shorter shipping times compared to traditional potash sources like Canada, Russia, and the Middle East.
The reduced transportation costs and quicker delivery times give the company a competitive edge over suppliers from other jurisdictions. Additionally, our production cost structure promises to be one of the most competitive in the world. By tapping into these key markets with logistical and production cost advantages, the Banio project is well-positioned to meet the growing demand for potash.
Has the new government in Gabon been supportive of mining and foreign investment? Has the government committed to infrastructure support to foster resource industries?
Gabon’s new government, led by president Brice Clotaire Oligui Nguema, has demonstrated strong support for mining and foreign investment, signalling a commitment to the development of the country’s natural resource sector as well as the prioritization of job creation.
A pivotal moment in this commitment was a meeting between Millennial’s chairman, myself, and president Oligui Nguema during the COP28 United Nations Climate Change Conference in the UAE on 30 November 2023. I detailed the progress achieved by Millennial in Gabon since initiating its exploration programme and outlined ambitious development plans.
During the meeting, Oligui Nguema expressed his wholehearted support for Millennial’s Banio potash project, recognizing its importance for the country’s economic development. The president acknowledged the significance of foreign direct investment and assured that the Gabonese government would collaborate closely with Millennial to facilitate the necessary infrastructure for the Banio project.
This commitment includes the development of a nearby port, reflecting the government’s proactive approach to creating a conducive environment for resource industries. This supportive stance signifies a positive outlook for mining and foreign investment in Gabon under the new administration’s dedication to sustainable economic development.
For a junior mining company, leadership and experience are critical for success. What is the leadership team’s track record for project development in potash, across Africa, or in other developing nations?
The leadership team brings a formidable track record in project development, particularly in potash, lithium, and the uranium sectors in regions like Africa and other developing nations.
Their expertise is underscored by several highly successful project development and M&A exits, demonstrating unique adeptness in navigating the complexities of the mining industry.
Notably, the team has recently developed and sold Millennial Lithium, a TSXV-listed company developing a large lithium brine project in Argentina to Lithium Americas for C$490M.
Our team also led the development and sale of Allana Potash Corp. with a potash project in Ethiopia, which was acquired by Israel Chemicals Ltd. for C$170M. Another example would be Potash One with a potash project in Saskatchewan, Canada, which achieved an impressive exit through its acquisition by large German potash producer, K + S, for C$430M. Such achievements not only highlight the team’s expertise in project development, but also showcase their ability to deliver significant value to stakeholders.
Moreover, the team brings expertise that extends beyond financial success, encompassing a nuanced understanding of operating in Africa and other developing nations. With an experienced track record, the leadership has refined its ability to navigate unique challenges associated with mining projects in the region, equipping Millennial with invaluable insights into regulatory landscapes, community engagement, and logistical intricacies specific to developing regions.
This seasoned approach positions Millennial Potash to not only effectively mitigate risks, but to also capitalize on opportunities for sustainable growth in diverse and evolving markets.
What can we look forward to in 2024? Given your fast-track record on similar projects, do you have any big announcements planned for next year?
In 2024, we are poised for significant developments with key catalysts that will shape the trajectory of our project. Our maiden resource report, announced in January, represents a crucial milestone for us, and demonstrates the project’s significant resource potential. We are committed to maintaining an accelerated pace of progress, and our team is diligently working on a preliminary economic assessment (PEA), which we are targeting to release in the first quarter of 2024.
Looking ahead, we have additional drilling plans scheduled at the North Target, including the extension of ‘drillhole Ba-001′, and the initiation of drilling for a new hole, ‘Ba-004’. Success at these locations should provide MLP with more than enough potash resources to enable the project to advance to a feasibility study.
We will focus on developing a low capex medium-sized operation with the potential to scale up production depending on the needs of the market. As we venture into 2024, these key catalysts form the cornerstone of our commitment to advancement and innovation within the potash industry.
