Anglo Aluminum looks to sell Guinea bauxite projects

Although Anglo Aluminum (ALU-V) is looking for a buyer for its sizeable Guinean bauxite project, the company is still moving ahead to increase resources and do a preliminary economic assessment on the project.

Known as Navasota Resources until recently, the company has spent the last four years developing two near-surface projects in Guinea’s Boke bauxite district. In that time the company has taken the Koba project from the grassroots stage to having an indicated resource of 348 million tonnes grading 42.78% aluminum oxide, 27.83% iron oxide and 2.85% silicon dioxide.

Now the focus is on the Koumbia deposit located about 30 km north of Koba and Anglo Aluminum president Jim Gillis says that recent drill results there have been encouraging.

“We are pretty pumped about that north deposit,” Gillis says of Koumbia. “We’ll pick the three best areas and build a robust resource in the order of 25-50 million tonnes that could be exploited by direct export and work up numbers on that.”

The company recently drilled 57 holes about 300 metres apart. The average thickness of mineralization was 11.46 metres grading 50.01% aluminum oxide, 2.18% silicon dioxide and 17.01% iron oxide.

The PEA will look at the economics of both Koba and Koumbia which are about 406 sq. km and 103 sq. km, respectively. Gillis says the goal is to have the study finished before rainy season starts in July.

“Meanwhile we have an arrangement with government whereby if we sell (the project) they will help us facilitate the sale, get it through the bureaucracy etc. and in return we would give them 50% of proceeds,” Gillis explains.

The company is also open to a joint venture partner.

“We have a lot of interest right now but yes we are going to keep her going,” Gillis says. “The more info we get, the more valuable the commodity is.”

Aluminum has recently begun to emerge from a rough period but analysts are forecasting that consumption of the metal could improve over the next five years with the growth in China, India and Latin America. Some say tight copper supply could also cause manufacturers to use aluminum as a cheaper alternative.

Aluminum fell from a peak around US$1.40 per lb. to about US60¢ per lb. in late 2008-early 2009 but recently has been fluctuating between US90¢ and US$1 per lb.

It’s estimated that Guinea hosts about 30% of the world’s bauxite reserves. Bauxite is the mineral form of aluminum; it typically contains about 50% alumina and is usually found in a layer averaging three to five metres deep, about half a metre beneath the topsoil. Alumina is composed of aluminum and oxygen, and is separated during the smelting process to produce aluminum metal.

There are three major bauxite mines operating in the Boke bauxite belt where Anglo Aluminum’s projects are.

In other news, the International Criminal Court ruled on Friday, Feb. 19, that a massacre of pro-democracy protestors in the country’s largest stadium by Guinea’s military junta in September 2009 was a crime against humanity. At least 156 peopled died or disappeared.

Guinea had been under military rule since December 2008. The military seized power in a bloodless coup after long-serving president Lasana Conte died.
Junta leader Captain Moussa Dadis Camara was shot and wounded in December, prompting crisis talks during which the military agreed to organize an election within six months.
An interim government was unveiled in mid-February with an election planned for next June.

Gillis was particularly happy that Mahmoud Thiam, a former New York investment banker who has served for the past year as Guinea’s minister of mining and hydraulics, has been reappointed to his post. Gillis spent three days with Thiam at the Prospectors and Developers Association of Canada conference in 2009.

“He’s very intelligent, very laid back and has the best interest of Guinea at heart,” Gillis says. “It’s really refreshing to get a guy like him in there.”

There were media reports that Russia’s state-financed aluminum monopoly, United Company Rusal, had been campaigning to have Thiam ousted.

Thiam ordered a government review on all Rusal contracts and last year a Guinean court found that Rusal bought the country’s biggest industrial project illegally in 2006.