Jade Road Investments Ltd (LON:JADE) welcomed an update from Future Metal Holdings Ltd, one of the investment vehicle’s main holdings, on its large open-pit dolomite magnesium limestone quarry in China’s Shanxi province.
The update confirmed a JORC-compliant measured resource for the Zhuangpeng mine of 35.95 million tonnes (Mt) with an average grade of 20.74% dolomite oxide (MgO); an indicated resource of 81.40Mt at an average grade of 20.48% MgO; and an inferred resource of 31.81Mt at an average grade of 20.61% MgO.
The Competent Persons Report (CPR) from SRK Consulting incorporated an expanded 3Mt production rate and estimated a net present value of the asset at about US$75.5mln.
Jade Road, which has an 85% stake in Future Metal, applied a further 17% discount to the independent valuation conducted by SRK and as of end December 2020 the asset was valued at US$50.4m in its portfolio.
“The notable improvement in the asset between 2019 and 2020 is mainly attributed to the effort made to substantially improve the quarry from the completion of its external structure in 2019 to the different licences secured to comply with the latest environmental regulations in 2020, said John Croft, executive chairman of Jade Road.
“Furthermore, the production schedule shows a strong commitment to develop the different resources on site and the local management team is in constant interaction with external parties for potential business collaborations.
“Our objective remains to maximise the value of the asset whilst also positioning it for a possible monetisation event, which would ultimately benefit the shareholders of Jade Road,” he concluded.