Dec 9 2015
First Bauxite Corporation is pleased to announce that the Government of Guyana has granted a two year extension to the construction commencement date under the Bonasika Mining Licence from January 31, 2016 to January 31, 2018.
In addition, the GoG may grant a further one year extension to January 31, 2019 if it is satisfied after a review of the performance and financial standing of the Company that such an extension has merit. The Company will now discuss with the GoG specific modifications that are required to the Mineral Agreement, BML and Environmental Permit to reflect the new Bonasika Ceramic Proppant Project ("Bonasika Project") scope.
First Bauxite is also pleased to provide a general business update and detail on the expected use of proceeds from the US$15 million private placement of secured convertible notes to Resource Capital Funds announced October 30, 2015 to close in two tranches, the first of which has closed in the amount of US$4 million, the second of which is expected to close in January 2016.
Initial Mine Infrastructure Investment
As part of the discussions with the GoG on the BML extension, the Company has agreed to allocate some of the proceeds from the private placement to initial design, permitting and infrastructure construction activities in Guyana during 2016. It is expected activities will focus on preliminary detailed design and engineering, the construction of wharves on either side of the Demerara River and on initial mine development.
Production Trial
The Company is also using a portion of the proceeds from the private placement to undertake a bulk sample pit programme to confirm mining and processing assumptions in the Bonasika Project Feasibility Study ("FS") and to produce commercial volumes of ceramic proppants in a full scale ceramic proppant production facility. The Company also intends to conduct field trials in select deep oil wells. Mining the bulk sample has commenced and planning work for trial ceramic proppant production is well underway.
Ceramic Proppant Testwork
Following announcement of the FS results on June 18, 2015 and filing of the NI 43-101 Technical Report on August 4, 2015, further independent testwork has been conducted by recognised oil and gas industry proppant testing laboratories on upscale samples of First Bauxite's ceramic proppants. This testwork has confirmed the favourable results reported in the FS that, compared to the market leading high strength proppant (HSP) and ultra high strength proppant (UHSP) products, First Bauxite's products have:
- superior strength
- superior conductivity and specific gravity
- comparable sphericity and roundness
The Company will provide additional business updates as further progress is achieved on the various activities discussed above.
Source: http://www.firstbauxite.com/