Myanmar, a country with a tainted past due to political uncertainty has started opening up of late and began attracting significant international investment. Democratic elections held in 2015 complimented by the lifting of the US sanctions in 2016 opened investment streams that were once perceived unlikely to find their way into the country.
The government has made strong private sector growth a key principle and goal for economic policy, though challenges still remain in abundance. Access to major financing has been a major challenge for investors as only about 1% of fixed-asset investment costs are financed by bank borrowing, while 92% of firms rely on their own funds. The country has been plagued by malpractices with non-transparent, uncertain and, complicated rules and procedures for obtaining, keeping and transferring land-use rights. Most firms face power outages, the worst level in the region. As a result, firms are forced to rely on their own power generators for electricity.
Towering above these challenges is one mining company that is revamping and re-digging the old wells of Myanmar’s rich silver and lead heritage. The Bawdwin Joint Venture (BJV) intends to redevelop the world class Bawdwin Mineral Field, held under a Production Sharing Agreement (PSA) between WMM and Mining Enterprise No. 1, a Myanmar Government business entity within the Ministry of Natural Resources and Environmental Conservation.
With an orebody that is distinguished by the size and grade of its resources and remaining open at depth and along-strike, the John Lamb led Tier 1 Myanmar Metals-Bawdwin project is one investment stream that is set to be an iconic project in modern Myanmar times, well on course to being the 3rd largest producing lead mine and 10th largest silver mine in the world. The company holds a majority 51% participating interest in the Bawdwin Project in joint venture with its two local project partners, Win Myint Mo Industries Co. Ltd. (WMM) and EAP Global Co. Ltd. (EAP
Everything about the Myanmar Metals project from the grades, size in strike and depth, rich cultural heritage, long life, low operating costs, ability to mine both open pit and underground, to ready markets across the border in China, is what its competitors can only dream about. The company seeks to develop the operation on an accelerated schedule. Located in the Shan State of Myanmar, Bawdwin project is strategically positioned to access to some of the world’s largest markets in form of smelters in China.
Mining of the Bawdwin resource dates to the 15th century, with Chinese artisanal miners extracting silver from surface and near surface deposits. British underground mining of the deposit commenced in the early 1900’s under the management of Herbert Hoover, the 31st President of the United States.
The mine has been on care and maintenance since 2008. Myanmar Metals aims to create a Tier 1 project in a strategically advantageous location leveraging on outstanding exploration potential and a well-managed sovereign risk in Myanmar.
Myanmar Metals Limited completed an initial Scoping Study in November 2017 and a China Pit Scoping Study in August 2018. These were later upgraded in June 2019 to a JORC Probable Ore Reserve of 18.4 Mt at 6.4% lead, 169 g/t silver and 3.4% zinc. The high grade Shan Lode has been extended with recent exploration confirming mineralization of 4.2% and 6.5% of Pb and 57g/t of Ag.
The mine is set to be mined in phases to optimise mining productivity and expenditure kicking off with a 13-year stage 1 pit earmarked for 2021 production at 2Mtpa with the subsequent stages and underground operations scoping stages on the tail.
Development of the mine and processing facilities will be enhanced by the substantial existing infrastructure in place which where possible, will be utilized or re-purposed with modern mining and processing technologies. The pit will be mined to a depth of 270m below the existing floor. John Lamb, Chairman and CEO, commented: “The Starter Pit fulfils its purpose with distinction; establishing a low-cost long-life mining operation which achieves an early payback on life of mine infrastructure expenditure and provides access to underground ore sources for future mining operations.”
Processing will be trough the convectional milling, sulphide floatation and filtration techniques with dry stack tailings to generates a target of 80Ktpa zinc and 180Ktpa lead, silver concentrates. This John Lamb led lead/silver/zinc gem will definitely put Myanmar’s mining industry back on track and potentially unlock some further key mining investment.
Some of the striking financial outcomes of the Starter Pit project are as indicated below;
•JORC Probable Ore Reserve of 18.4 Mt at 6.4% lead, 169 g/t silver and 3.4% zinc.
•NPV US$580 Million (8% Real Discount Rate -100%Basis)
•Internal Rate of Return (IRR)- 30%
•Payback Period – 4years
•Capital Expenditure- US$ 267 Million (with US$33 Million contingency)
•Operating Costs: US$108/t processed