With our new focus on manganese for short-term cash flow, AIS Resources has negotiated a letter of intent for two manganese projects located in the Cajamarca Region of northern Peru. Manganese Dioxide is an important element for industrial alloy uses, stainless steels, and in car battery elements.
One of our two projects is located approximately 300 km north of Trujillo in the north, where the Salaverry Port will be used for shipping. Both high-grade manganese properties have excellent mine road access, good power and water supply, with one having paved roads just 3km from the project. The very pro-mining community is only 5 km from the mine and will be an excellent resource for local workers.
The El Zorro mine currently has a mining permit for 350 tonnes per day. In the near future AIS Resources will apply for permits to increase this tonnage. Five grab samples were taken from the three main bodies and the ICP analysis from Alex Stewart Labs in Lima, Peru indicated over 40% MnO.
AIS Resources’ First Manganese Mine Operations
Manganese Trading – Providing Immediate Cash Flow To provide immediate cash flow, AIS expects to trade up to 23,000 tonnes MnO a month starting June 2019 with expanding volume in 2020. Currently we have 20,000 tonnes available to buy and ship from Ilo Port. The trading ore tested 45.6% MnO and comprises of purchasing mined and crushed ore at the mine site, with AIS supervising quality assurance and control, logistics to port and shipping for export. Our estimated cost is less than US$160 per tonne basis 42% MnO, with our estimated proceeds being in excess of US$250 per tonne basis 42% MnO. The company will receive 95% of the payment upon departure of ship from DLC.
Near Term Objectives – Peruvian Manganese Projects To generate significant profits in 2019, our near term objectives are to sell up to 40,000 tonnes of manganese ore per month. And currently, AIS has a Letter of Intent from a buyer to purchase up to the full amount of 40,000 tonnes of MnO per month that will be mined from our two strategically located Peruvian manganese mines.
El Zorro Manganese Mine
El Zorro – Royalty Agreement At our El Zorro Mine, we have mining permits in place to produce 350 tonnes a day with an agreement to pay a $20 per tonne royalty. The mine currently has an estimated 40,000 tonnes of ore available at surface for immediate removal and sale. AIS will supply quality control lab, engineering, excavator, trucks, explosives (there is no overburden), and a primary crusher. Currently we have 6 x 5kg rock chip samples from 100m x 5m x 4m trench being tested by Centamin Laboratories, Peru.
Our total estimated costs for mining the MnO include: production cost of $50 to $60 per tonne; trucking and loading in containers of $40 per tonne; and shipping from Salaverry/Chimbote to Southern China Ports of $25 per tonne. Our estimated proceeds form the sale price is US $250 to $280 per tonne for grades greater than 40% MnO (current price). CFR Chinafor 45% MnO is currently $280 per tonne shipped in containers.
There is an acquisition opportunity after the first 40,000 tonnes is removed from surface. At that time, AIS will complete a full geological analysis including drilling to determine if the company will acquire the El Zorro property.
El Zorro – Production Plan and Sales
Royalty Agreement– $20 per tonne royalty subject to sampling.
Mine extraction/transport – $100–$120 per tonne.
Shipping to Southern Ports China – $25–$35 per tonne in 40 container lots (1,000 tonnes).
Sales Agreement– a 5–10% discount to spot price currently $7 per 1% Mn based on 40% Mn with initial analysis providing 45.6% on one 5 kg. ore rock sample.
This provides gross revenue after discount of $252 CFR based on 10% discount, 40% MnO. Transport on a paved highway after 3 km on a road that needs to be upgraded.
Other important factors include:
316 km road travel – 6 hours in truck to Salaverry Port.
Port has just completed $229 million dredging upgrade for container ships with a 12.4m draft.
Chimbote port is 432 km from the mine site.
All AIS equipment will be rented until cash flow permits leasing. Laboratory will be set up at the town nearest to the mine site, includes wet chemistry and ICP machine.
AIS has engaged a Peruvian management team as general manager, geologist, mine engineer, social/indigenous liaison, mine lawyer and logistics manager. We are currently preparing legal documents and lease agreements.