Nkamouna Cobalt-nickel-Manganese project - Geovic Mobilises Finances

Interview of Timothy D. Arnold, P.E., Acting General Manager, Geovic Cameroon PLC.

How far have you gone with the Nkamouna Cobalt-nickel-Manganese Project ever since you got the mining permit in 2003?

Right now, we're working on the financing for the project. After receiving the mining permit, we did a full-scale bankable feasibility. In order to be able to get financing for any project, like this, the banks, partners and whoever you want in it would want to know about the project and that is what the feasibility is all about. What most people don't know is that the feasibility takes months and months, if not years to come up with a detailed planning and engineering to be able to say confidently what the project would cost, what it would create as revenue etc. In April 2011, we finished with the feasibility which was done by a well-respected engineering firm and since that time, we have been looking whatever financing necessary to put the project in production. That probably is something that is not well understood, how long it would take to put the financing together. It's a long process and certainly the market has been something to do with that. In 2011, the price of cobalt was higher than it is today and when you look at the quantity you're going to generate, you look at the different prices. In 2008, the price of cobalt was 50 dollars, now it's about 11 dollars. Everything comes back to the economics and it's a long-term project to cost a lot.

How much is the entire project going to cost and who are your partners? How far have you gone with mobilising the finances?

Feasibility shows that the project is going to cost about 615 million dollars (about FCFA 306.8 billion). But that doesn't include things like the financing cost as well as any type of funds. But its a billion dollar project when you add the financing and other related costs. We've been negotiating with several groups over a long period of time. We are now focusing mostly on one and we believe that we will hold last stage negotiations with this group. Again, it's disappointing that they're taking so long to get these things done but I think we're at a point now where we're hoping that we can finish the negotiations so that everything can work. Here, you need to be very careful who you choose as partner. Hopefully in the next months, we will be able to take some decisions how we would proceed with the project.

While waiting for the financing, what is happening on the field now?

There is certainly just an upkeep of the site. We have a very good group of people out there that are taking care of the site and keeping it in good shape. What I can tell the population who have been waiting impatiently for the start of this project is that we have good people who are working on it. We have a very good plan and we believe that this is a great project, unfortunately all these take time. But that is mining. Financing takes a lot of time because it has to be profitable. We are planning to put something that is going to be significant.

What are the estimated reserves of cobalt, nickel and manganese that need mining?

The reserves measured indicate about 121 million tonnes meaning 0.23 per cent for cobalt, o.65 per cent for nickel and 1.35 per cent for manganese.

Looking at the social and environmental impact studies carried out, what would be the socio-economic impact of the project on the population and country at large in the short, medium and long terms?

It's a large mine and will employ hundreds of people for a long term. Just the employment itself would greatly boost economic development. The project is more than just a mine. It's going to create a city out there and it will have a huge impact on the people of the East Region. On the country, it's a good mine given that it would go for 23 years of production based on our feasibility study. We also did the feasibility based on only 22 per cent of our reserves. This could go on for decades and the taxes paid, the employment generated the infrastructure to be put in place. Any time a mine enters a remote area, it improves the health of the community. We will certainly be opened to the idea of power generation locally; we are partnering with SNI and we are going to be looking at the long term. The purpose of this is to mine cobalt and bring good infrastructure and services to the country.