An 85 per cent hike in exploration expenses meant that Baobab Resources (BAO) reported a full-year pre-tax loss of £7.21m. The figure was marginally higher than analysts' estimates, but the main focus of investor attention is on the pre-feasibility study for the Tete pig iron project in Mozambique, which the group confirmed is on schedule for completion in February.
The study is assessing a range of production scenarios at rates of 1m, 2m and 4m tonnes a year. The study has already identified a low-cost, coarse crushing and dry magnetic separation process for the ore that produces a total iron yield of 84 per cent - unusually high by industry standards. Baobab will also be able to commercialise the vanadium slag by-product at Tete, which is used primarily to strengthen steel.
Baobab also confirmed that good progress is being made at its 60 per cent-owned Monte Muande magnetite/phosphate deposit, where Coffey Mining has estimated a 200m-250m tonne exploration target.
