Firering Strategic Minerals plc (LON:FRG) Independent Non-Executive Director Vassilios Carellas caught up with DirectorsTalk to discuss first sales from its high-purity quicklime operation in Zambia.
Q1: Vassilios, you’ve secured initial sales, which is great news, but with customer details off the table, how can investors gauge traction? Should we expect volume disclosures or contract terms soon or are you actually playing your commercial cards close for now?
A1: Obviously, there’s commercial sensitivities around pricing, which we obviously don’t disclose that information. Once we reach full capacity, we’ll obviously look to report on a quality basis and then there’ll obviously be a read-through for the investors at that point in time.
Q2: Now, Firering Strategic Minerals is hitting 85-90% purity, and that exceeds the industry benchmark. Does that look good geology or a testament to your team?
A2: It’s a combination. The feed at the moment comes from the limestone deposit, which is a very high-grade limestone deposit with very few impurities, which makes it perfect for the production of high-quality quicklime. In addition to that, we’ve done these modifications to the plant, and we’ve got a pretty good team on site.
So, it’s a combination of the two.
Q3: How long will it take to get the second kiln up and running and then kilns three and four?
A3: At this stage, we anticipate to have the second kiln up and running in Q3, with the other two coming on stream in Q4.
Q4: Now, with aggregates and ancillary products quietly bringing in revenue, could these sidelines evolve into something more material for Firering Strategic Minerals’ bottom line?
A4: At the moment, I’d say these cover costs, but we do expect to build out other revenue streams, such as the cement plant, once we’ve got all eight kilns up and running, and that will certainly strengthen our bottom line.
Q5: You mentioned in the RNS that discussions with the Zambian bank are progressing well. Will these initial sales assist with the discussions with the bank, and can you explain what the funds will be used for?
A5: One of the parameters or conditions for the bank was the sale or the first sales, which we’ve done now, and that’ll obviously provide significant comfort to the bank. The team is confident that discussions can progress on to the next stage and be finalised with the funds.
These funds will obviously be used to increase Firering’s interest to 45% and also repay the bridge loan, ensuring that we are in a strong position as Limeco ramps up production over the course of 2025 and into next year.
