Sign up USA
Proactive Investors - Run By Investors For Investors

Tango Mining takes control at Oena, and is now planning further expansion in Africa

Tango Mining is taking control of the Oena mine in Northern Cape, ahead of planned further expansion in diamonds
Tango Mining takes control at Oena, and is now planning further expansion in Africa
Oena has a history of producing high quality stones

A C$250,000 fundraising, to close later in August, will set Tango Mining Limited (CVE:TGV) up nicely for the next stage of its development, as it seeks to secure control over the Oena diamond mine in the Northern Cape Province of South Africa.

Tango also mines and processes coal on behalf of Exxaro (JSE:EXX) in Mpumulanga in the northwest of South Africa. Tango’s new chief executive Samer Khalaf describes that operation as largely “self-sufficient.”

He’d like to be able to say the same about Oena too, which is why the company has recently been making some changes at the operational level, and why the recent funding has been put in place.

Out goes the old contractor at Oena, and in comes Consulmet, one of the top names in diamond mine design and operations. Tango and its partners will own the processing equipment, for which it has secured financing through a newly established equipment company and will be operator.

But while those changes are taking place there will be a short production hiatus.

“There is enough equity in the last raise to get us through the period when Oena is not producing,” says Khalaf. “It’s going to take us eight weeks to get up and running.”

Tie that into the 10 days or so that still remain for the current contractor to clear out and that means production in Oena is likely to re-start in about ten weeks.

But when it does the improvements ought to be palpable.

“We’ll be looking to target a double in production,” says Khalaf. “Certainly to increase it by between 50% and 100%.” And margins are likely to increase fourfold since the equipment on site is wholly owned by Tango and its partners.

This increase will be affected quite simply. There will be more shifts, more tonnage will be mined, and the company will also be processing old tailings as well as fresh gravel.

Even with those production increases in place, Khalaf says that internal company estimates still put the mine life at Oena at over ten years, which isn’t bad considering it’s already been in production for more than a decade.

But there’s more to it than that. Creating what Khalaf calls a new “mine equipment company” to do the work at Oena allows Tango to have a vehicle in place that will also be able to take on other work in South Africa as and when it arises.

“We have formed our own equipment company in order to lease  to other assets that we might acquire,” says Khalaf. “We’re looking to acquire diamond assets in South Africa and beyond and we’ve been very active in our search  over the past few months.”

Longer-term followers of Tango might remember the company’s efforts to acquire the BK11 kimblerlite pipe in Botswana, and how that deal eventually stalled.

But Khalaf is quite candid about this.

“BK11 was a really challenging project,” he says. “It would have required US$25mln to US$30 mln in new money in what would have been a new country for us. We dropped the opportunity earlier this year. We’re now looking more at alluvial diamond mines and trying to replicate the Oena model.”

So, smaller mines of a more manageable disposition, for a company that’s now stabilised financially and supported by a South African mining team with long-standing in-country experience.

“We can leverage from the experience of our coal team,” says Khalaf. “We’re really assisted by them in a lot of the decisions we take at Oena. The team is very involved in our analysis of the operation at Oena and at new opportunities we are reviewing”

As it stands, the three coal operations should process around 6.2 mln tonnes this year, while Oena continues to throw up a significant percentage of high quality stones worth more than US$1,100 per carat.

But don’t expect Tango to stand still for too long. Once Oena is up and running under the new mining plan, expect further interesting developments. 

View full TGV profile View Profile

Tango Mining Timeline

Newswire
August 04 2017

Related Articles

Gold bars
September 11 2017
Ortac Resources' diversified investment portfolio will now be streamlined, with the focus on two particular assets in Africa
Sweden-focused Leading Edge Materials delivering in the high tech materials arena
October 05 2017
The group has just announced plans to list on the Nasdaq First North Stockholm...
Noodles
February 13 2017
The final three months of the year continued a healthy revenue growth trend for the nascent food distribution business

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright © Proactiveinvestors.com, 2017. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use