Baobab Resources to exceed 300 million tonne iron ore target at Tete project in Mozambique

Wednesday, 16 Nov 2011

Baobab Resources has released its full year results statement at midday, as the group's shares were trading up nearly 14%.

The group told investors that the pending Ruoni South resource statement will ensure that Baobab will meet or exceed its 300 million tonne iron ore resource target at the Tete project in Mozambique.

Baobab Resources said that a further resource statement based on current work programs at Tenge is scheduled for early 2012. This is likely to add substantially to the Tete project's existing global resource inventory, pushing it well beyond perceived base requirements.

Mr Ben James MD of Baobab Resources told investors that Baobab is rapidly approaching a watershed in the development of the Tete project.

He explained that following an aggressive 38,000 meter drill program, the group's the 300 million tonne resource base milestone is likely to be met and surpassed in the coming weeks. He said that "A Scoping Study, also due in November, will form the foundation upon which the Pre Feasibility Study will continue to build during 2012."

He added that "Investors may look forward to a regular flow of substantial news over the coming months as the company consolidates its position as a successful Mozambique focused explorer unlocking the country's mineral wealth."

Meanwhile, Mr James said that work is progressing well at the Monte Muande magnetite phosphate deposit, where there is an estimated 200 to 250 million tonne exploration target. This potential resource is estimated to an average depth of 40 meters.

Baobab said it expects to have results from a 2,000 meter drill program in November 2011. This work cements the group's position in the joint venture with North River Resources. By completing the program, Baobab will earn an initial 60% stake in Monte Muande. Additionally the group is also carrying out preliminary coal exploration.

This is taking place on the Rio Mufa area, part of the Muande joint venture, and also to the south of the Tenge Ruoni area of the Tete project.

Mr James said that "These areas represent a very real and exciting opportunity for Baobab to establish a firm footing in the flourishing Mozambique coal sector. The company believes that the development of coal assets will add substantially to its evolving iron and steel aspirations."