African phosphate developer and producer Kropz Group recorded revenue of $14.1-million for the six months ended June 30.
The interim period also saw it record the first sales from the trial production phase.
“During the first six months of the year, Kropz faced significant challenges owing to unprecedented rainfall in the Western Cape region. The heavy and persistent rains resulted in severely wet mining conditions, posing obstacles to our operations.
“To address this issue, the company has undertaken various measures, with a primary focus on increasing in-pit drainage to alleviate the waterlogged conditions in our mining areas and implementing ore stockpiling and blending strategies,” the company explains.
The extent of the ultra-fines (natural slimes) in the ore encountered also limited production throughput.
“In response, Elandsfontein is making strategic investments in new equipment that will enable the plant to more effectively handle and process the challenging slimes material. Elandsfontein aims to increase its production throughput by more than 40% and enable the achievement of steady-state production”.
In addition to addressing the wet mining conditions, Kropz states that Elandsfontein continues separating and stockpiling the hard bank material encountered in the ore.
As the hard bank material is phosphate-rich and stockpiled, the company has begun a process to analyse the hard bank material to identify the appropriate method of mining and processing to extract phosphate.
The Elandsfontein mine is still in its trial production phase and further challenges can be expected as it progresses towards full production.
While Kropz is still ramping up to steady-state production, a gross loss has been recognised in the period owing to discounted sales prices as a new market entrant and operating below full production level, which resulted in a cost per tonne higher than will be expected once in full production.
Property, plant, equipment and exploration assets carrying value is recorded as $64.2-million as at June 30.
Cash at June 30 this year was reported as $2.1-million.
Kropz also reported shareholder loans and derivative at June 30 this year of $66.2-million, and trade and other payables at June 30 of $5.4-million.
The company also confirms that in March this year, Kropz Elandsfontein secured a further R285-million bridge loan facility with the ARC Fund to meet immediate cash requirements at Kropz Elandsfontein.
“R225-million has been drawn by June 30. The loan is unsecured, repayable on demand with no fixed repayment terms, and is repayable by Kropz Elandsfonteion on no less than two business days’ notice.
"Interest is payable at the South African prime overdraft interest rate plus 6%, nominal per year and compounded monthly,” the company adds.