The dramatic increase in chrome prices has thrown a vital lifeline to small-cap chrome producer, Bauba.
The Bauba directors have said this week that “chrome mining at the Moeijelijk Mine will resume as a result of a dramatic increase in the chrome price. The chrome-ore price has subsequently rebounded from last year’s low of $80 per tonne, and is currently at approximately $380 per tonne.”
This is unexpectedly great news for Bauba shareholders, who have had to face tough times in the recent past.
“The build up to the planned production of 20 000 tonnes of chrome-ore per month is expected to be achieved within the following three months, with the expected chrome grade to be between 39% and 41%,” says CEO Nick van der Hoven.
The Moeijelijk Mine was placed under care and maintenance a year ago as a result of the adverse changes in the chrome-ore market.
More specifically, the drop in the chrome-ore price from $175 per tonne to approximately $120 per tonne rendered the company’s chrome project financially unviable, according to a SENS announcement.
The Board’s focus for 2016 was mainly on generating revenue from its chrome operation and to reduce platinum exploration activities and corresponding expenditure.
A full-scale 30-year Mining Right for Chrome Ore has also been granted by the Department of Mineral Resources, and the Board is optimistic about the continued positive growth performance in earnings for the 2017 financial year.
Unfortunately, Bauba has given shareholders high expectations in the past but has been a little short on delivery. But “from a difficult position in 2016, Bauba has wisely preserved its chrome-ore reserves for more favourable prices, come into a stronger position and is well placed to capitalise on these improved prices,” says Nick van der Hoven.
If this latest chrome bonanza is the real thing, let’s open up the Dom Perignon, clink our glasses, and wish the company and its management the very best with their new chrome project. Cheers, Bauba!
Jeremy Woods trained for three years as a journalist on the Herts Advertiser, St Albans, in the U.K. Once qualified, he left England to work as a crime reporter on the Vancouver Sun in Canada. After three years, he worked for the Los Angeles Times as a trainee financial journalist, spending most of his time reading company accounts and finding publishable stories in them. He moved to South Africa and for the last five years in journalism worked for the Sunday Times, Business Times, as Investment Editor. He has also published a financial thriller called “Special Payments”, which was a best-seller on publication, and optioned three times for a film.