Mabwe Minerals, the majority-owned subsidiary of Raptor Resources Holdings Inc. (OTCQB: RRHI), has assembled a land package in northeastern Zimbabwe at their recently expanded Dodge Mine site (just northeast of Harare) which will satisfy rapidly mounting regional demand for barite, the critical weighting agent for drilling mud used throughout the oil and gas industry. With upwards of 80% of API-grade barite going directly into the oil and gas sector, accelerating regional (as well as global) drilling activity provides a strong future for MBMI’s Dodge Mine and the company has stitched up the logistics to boot.
Over 160k tons of annual capacity have been secured via strategic partner and the biggest grain importer in all of Harare, PHI Commodities, whose fleet of National Railways of Zimbabwe non-stop express train-supported rail wagons are provided to MBMI with exclusive rights on outbound loads from the Shamva Rail Depot. Adding engagements with local Zimbabwean trucking companies, Mabwe has lined everything up for maximum offtake from mine to market, with a dual land transport equation for getting product directly to the Port of Beira, southeast across the border in Mozambique.
Angola, Tanzania and neighboring Mozambique are huge oil development markets with a variety of factors that make them highly appealing to foreign investment from some of the sector’s biggest players. The Pande and Temane gas field areas in Mozambique are of particular interest, with a spate of onshore targets now being developed that add significantly to the already impressive offshore gas discoveries, with Anadarko and its partners surpassing 100 trillion cubic feet of gas discoveries since 2010. The underlying Rovuma basin, that stretches out into the water (where Anadarko-operated Offshore Area 1 is located) from the borderlands between Tanzania and Mozambique, holds a great deal of potential for future oil discoveries. With limited oil exploration thus far, the upside for MBMI and barite market dynamics in general from this one area alone should be apparent to most investors.
Wentworth Resources, Ltd. (LON:WRL), part of a larger consortium focused on Mozambique and in which Anadarko Petroleum Corp. (NYSE:APC) is a major player (as well as the operator), announced last month that they have begun drilling an onshore concession (initial estimates in the neighborhood of 1.2B bbls of oil and 2.4 Tcf of gas) in the northern Cabo Delgado province (Rovuma basin). This drilling is just the latest signal flare to markets regarding the extensive onshore and offshore potential in the still largely unexplored sedimentary basins of Mozambique.
Mozambique becoming a fast-growing oil producer with plenty of upside potential still to be tapped is big news for MBMI and the now over 1.1k-acre Dodge Mine complex, which stretches across four mountains, also hosts high-grade barites. These premium barites are much sought after and fetch top dollar for various automotive, medical, and paint additive applications, as well as being used in specialty robust concretes, giving MBMI access to lucrative niche markets in addition to the larger oil and gas demand for their regular grade barite.
Secondary limestone production at Dodge Mine can feed local agricultural/construction markets as well and with widespread gossan deposits (a solid pathfinder for gold and silver) alongside surface sampling that indicates the presence of gold, as well as copper, nickel, lead and zinc, Mabwe Minerals is sitting on some really nice dirt. With the JCI core drilling/ADIT tunnel program data from the late 60’s having indicated a 15-year supply of barite at the Dodge Mine roundly backed-up by the ASCON Africa validation study data, which shows approximately 441k tons of barite and 531k tons of limestone reserves on just 7% of the now expanded property, there are a lot of reasons to like MBMI and its parent company.
In the U.S., where fracking has led to the country becoming top dog in terms of global oil production as of this year, we import upwards of 75% of what need and only 15% of that imported barite doesn’t come straight from China. The broader market for barite remains healthy for the foreseeable future and whether we are talking regional or global, Mabwe Minerals has the digs and the throughput to help satisfy drilling demand.
For more info on Mabwe Minerals, please visit www.mabweminerals.com
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