Great Quest Metals

The Tilemsi Phosphate Project

By Ania Swiatoniowski

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The West African country of Mali is Africa’s third largest gold producer, but the country has the potential to become a significant producer of phosphate as well. Great Quest(TSX-V:GQ), a Canadian mineral exploration company with standing assets in Mali, has been granted permits by the Malian government to carry out exploration activities on an extensive phosphate deposit in the Tilemsi region of north eastern Mali. Great Quest’s Tilemsi Phosphate Project, has a 50Mt (million tonnes) inferred resource of phosphate, which the company plans to process into fertilizer for the West African agriculture market.

Mali is Africa’s seventh largest country (1.2 million km2, landlocked) with a population of 16 million. The Malian economy is highly dependent on export revenues from gold mining and agriculture – primarily cotton and livestock. An estimated 80% of the labour force is engaged in agriculture or fishing, with the remaining 20% in industry and services. Mali is the third largest producer of gold in Africa, after South Africa and Ghana, and ranked 16th in the world in 2011. Malian officials have reported a gold yield of 50.272 tonnes in 2012, a 15% increase from 2011.

The Malian government has been attempting to diversify its economy and minimise its dependence on gold mining. The country has additional untapped mineral wealth in bauxite, uranium, diamond, and base metals.

Great Quest, founded in 1989, works in exploration and development of resources in Mali. The Canadian company began operations in Mali with a focus on gold in 1996. The company currently holds a gold permit for the Sanoukou project (Sanoukou and Dabia Ouest concessions) in the Birimian Gold Belt of western Mali and continues to work with other companies in the area.

“GQ’s management and board come with a wealth of experience in mineral exploration and project development… particularly in Africa,” explains Candice Font, Investor Relations and Communications Manager at Great Quest. The management and directors bring significant experience from work in potash, phosphate and gold globally but particularly in Eritrea, Ghana, Brazil and Morocco.

Today Great Quest’s flagship project is the Tilemsi Phosphate Project and unlocking West Africa’s fertilizer market. After beginning to review phosphate mining opportunities in Mali in 2008, Great Quest now holds 3 concessions in the Tilemsi region (Tilemsi, Tarkint Est, and Aderfoul) for a total project area of 1,206 km2.The Tilemsi region lies outside of Gao, the closest city to the project site. Great Quest has completed the first two phases of the exploration programme and reports 50 Mt (million tonnes) inferred resources of high grade phosphate with an average grade of 24.3% P2O5 (at a 10% cut off) and low level of contaminants such as Cadmium.

The deposit at Tilemsi has various features that make the phosphate favourable. “[It] is naturally high grade and can easily be beneficiated to 25% to 38% P2O5. The phosphate is reactive and performs as well as a chemical fertilizer… [and] it contains low level of heavy metals and other contaminants,” explained Font. The mine’s geographic location is also an asset. “[The] deposit is located close to a highly agricultural region in West Africa,” continues Font. Explaining that the farmers of the West African regions are target market for the phosphate and fertilizer.

Currently West African farmers pay high prices for fertilizers because of a lack of adequate supply. Fertilizers must be imported over large distances resulting in prices as great as six times that in the global market price, according to the World Bank. High costs translate to low usage of fertilizer and lower crop yields. The extraction of phosphate and mixing of fertilizer would provide landlocked West African farming market with a source of affordable fertilizer and increase crop yields.

Great Quest has completed the first two phases of the exploration program for the Tilemsi concessions, conducted characterisation tests, and has received positive PEA results. Feasibility studies and project financing are scheduled to take place over 2013 and 2014. Construction of the mine site and beneficiation plant are projected to begin in Q3 of 2014 with hyper phosphate production to launch in Q2 of 2016.

Political situation in Mali

In March 2012, Mali’s 20-year period of democracy was disrupted when a military coup deposed Malian President Amadou Toumani Touré. Shortly afterwards, Tuareg rebels and Islamic extremists from northern Mali launched a military assault, seizing desert regions and cities in northern and central Mali. Over the past several months, Mali’s military has held a consistent campaign against the rebels in urban and desert areas. French military forces, joined by troops from other West African countries, have joined with the Malian military to fight the rebels. French and UN troops are committed to remain in Mali until at least the end of 2013. Mali’s interim government has called for presidential elections in July 2013.

Due to the political situation in Mali, Great Quest has put the Tilemsi Project on hold until the security situation improves. However, the company maintains its office in the capital, Bamako.  “It appears that Malian authority and administrative services are progressively returning to northern Mali’s main cities, including Gao, the major city close to our project,” said CEO Jed Richardson.

In the meantime, Great Quest remains active. The company is collaborating with the Institut d’Economie Rurale, Mali’s main agricultural research institution, and the Malian Ministry of Agriculture in developing a fertilizer to be used on a test plantation in preparation for Mali’s planting season in September-October. “To accelerate the development of our Tilemsi phosphate project, [Great Quest] is pursuing the development of a pilot plant in Segou… The objectives are to produce enough granulated fertilizers to supply local blenders, large scale farmers and agricultural development organizations, and to develop the market ahead of planned full-scale operations,” indicated Richardson.

Great Quest remains positive in light of recent military developments in Mali and confident in the success of the Tilemsi project. Richardson indicated that the company “plans to resume work on the ground as soon as the situation permits. Mali has a twenty-year history of democratic rule and expectations are that this tradition will continue.”

Great Quest projects that the Tilemsi Phosphate Project will be in initial production in 2016 with an estimated 20-year mine life.

Resources Quarterly - Summer 2013

This feature originally appears in the Summer 2013 edition of Resources Quarterly.

Click here or on the cover to view the entire issue.