Firering Strategic Minerals plc (LON:FRG) Independent Non-Executive Director Vassilios Carellas caught up with DirectorsTalk to discuss operational progress at the company’s Limeco asset in Zambia, focusing on kiln optimisation, production growth, and market expansion.
Q1: Now, in a previous interview we talked about the optimisation work being undertaken on Kiln 2. What level of production is now being achieved, and can you just provide some background to the improvement of performance of the second kiln compared to the first?
A1: As announced, the second kiln now is doing over 60 tonnes per day. In actual fact, the last few days probably did closer to 65 and steadily improving, which compares to Kiln 1 where we had discharge rates around about 50/55 tonnes per day and that’s more or less the capacity for that kiln.
The key performance or the key differences to the performance of the kilns is down to the modifications that have been carried out which I think we’ve touched on before, but just to remind everyone is that we have basically converted the way the kilns work.
The first kiln had the so-called arches and bridges in the kilns, which were designed to actually help facilitate getting heat to the middle of the kiln. What we found when operating them was that it resulted in a preferential flow and heat in the kiln, and therefore it was causing us a few issues.
So, we’ve removed the arches and bridges that are in the kiln, so the kiln is a complete hollow shape. We had to adapt the burner to get the heat to the middle of the kiln. So, there was an adaptation to the burners and then we also made changes to the way the air is being sucked out of the kiln to even the way the air gets drawn out from the kiln.
Those are the big changes we’ve done, and it looks like so far so good. The changes have worked but as we said, we were in just over one month and in a three month optimisation process. So, we’re looking to get further improvements from these kilns.
Q2: What kind of timeline are we looking at for expanding production capacity?
A2: As announced, kilns three and four, work on getting those kilns have started and we’ve got a sheet bending machine on site now. So, we’re able to fabricate the pipes for the gasifier out of sheets of metal on site. So, that work has started.
We’ve also started working on the hopper for the feed system as well as the feed system itself for kilns three and four and we’re now about to start commencing work on the kilns themselves. So, we’re expecting kilns three and four to be commissioned in Q3 and Q4, respectively.
From a quicklime perspective and a hydrated lime perspective, we should see further improvements and further production coming out of kiln two. As soon as we get kilns three and four online, there’ll be a lot more production coming out of those kilns.
In addition to the quick lime part of the business, we are in the process of installing a limestone milling circuit and this is expected to be commissioning in Q3.
We do have just to refresh everyone’s memory; we do have a cement circuit sitting in containers on site and we’re basically taking the front end of that circuit and erecting it. So, we’ve gone through the process now of opening up the containers, taking out the bits and pieces of equipment that needs to be serviced and service them, checking the integrity of everything to make sure it’s all good.
There is a minor amount of civil works that need to be done, but a large chunk of the civil works is already on site has already been done. It’s just a matter now of putting up that circuit.
Q3: What markets are Limeco products being sold into? Who are typical customers?
A3: I guess the main, primary markets are the mining, agricultural, industrial sectors in the region. At the moment, we are dealing in Zimbabwe and Zambia, but we are looking further afield as well.
Sales are largely through traders. Again, direct customer engagement is increasing and so we are getting our product directly to the end user.
At the moment, the main products being sold are varieties of both quicklime and hydrated lime and we’ve got our own branded packaging now, which we’ve recently introduced, and that will support product visibility as well.
Q4: Just to finish, what kind of revenue is Limeco currently generating?
A4: Current revenues reflect the initial production rather than the full plant capacity. February appears to have been the strongest month to date in terms of invoicing and cash received with the company not having to remit any finances to Limeco to cover operational expenditures. March looks to be the same.
We do expect that revenues will vary during this ramp up phase but at the moment, the trajectory is in the right direction, and the plan is to provide quarterly operational updates once the four kilns are operational that will cover the revenue side as well.
That will give a true reflection of the business, because at the moment, trying to do that, putting out numbers on two kilns does not give you a true reflection of what it can do. Most importantly, we obviously need to put out numbers there that have been, to some extent, audited.
Firering Strategic Minerals plc (LON:FRG) is an emerging quicklime producer and critical minerals explorer, with operations in Zambia and West Africa.
