Namibia Critical Metals : In the News – Global Business Reports 2023 MACIG – Mining in Africa Country Investment Guide

G L O B A L B U S I N E S S R E P O R T S

MACIG

MINING IN AFRICA

COUNTRY INVESTMENT GUIDE

2023

Dear Reader,

We are very pleased to present to you the 2023 MACIG edition, a book that, every year since 2014, has sought to honor its name as the "Mining in Africa Country Investment Guide" by providing its readers with the most complete overview of mining in the continent. We think we achieved this goal once again with this year's report.

Covering one of the most complex mining jurisdictions in the world - with at least 20 relevant countries, some of which are larger and more regionally diverse than many other nations in the world, and hosting almost every imaginable resource on earth - is never an easy task. This year, we interviewed over 130 executives in 28 African countries, of which 20 producers, 40 juniors, and about 50 service providers serving every part of the value chain (EPCs, labs, power, equipment, blasting, logistics, technology, legal, HR, and consultancies), as well as governments and financial institutions. And yet, as many explorers say in the industry about the untapped upside potential at their properties, we are still "only just scraping the surface." This 70,000-or-soword-report is still a summary of the incredibly vast and resourceful industry, but it is also the most comprehensive book dedicated to the mining industry in Africa, even after applying the rigors of the word "comprehensive," which cannot be used too freely.

To help our readers understand the dynamics specific to the continent, but also to different regions, countries, and communities, tied into global trends, MACIG 2023 is structured across four regions (West Africa, Southern Africa, Central Af- rica, and East Africa), and across seven commodity classes (precious metals, base metals, battery metals, graphite, rare earths, uranium, and coal). By mapping out the African mining industry in this way, we discovered a much broader mining universe that is taking root in unexpected places, like Uganda, Malawi, Sudan, Ethiopia, or Zimbabwe, as well as a vibrant new wave of developers looking at materials for every side of the electric battery, all of which can be found in the African soils. The first to understand the borderless opportunities that Af- rica's mineral belts have to offer are the junior explorers, who are expanding the continent's mining activity from north to south and from east to west, as well as tapping into a new basket of minerals - like lithium, rare earths, or graphite. But they are no longer alone. The world is starting to look at Africa differently, with less hesitation, and more wonder - as the solution to respond to a growing demand for critical resources and a key player on a world scene where Russia and China need not dominate.

We hope this year's report to be a useful platform to learn about the opportunities and challenges that Africa has to offer, but also to look back at 2022 and unpack its themes. And finally, we would like to thank our contributors, many of whom have participated in MACIG with every edition. We are humbled by the trust you bestow on us.

Alfonso Tejerina

Director and General Manager

Global Business Reports

Global Business Reports	3

CONTENTS

Introduction

8. Inflation woes and African mining

1. Interviews with the Minister of Mines Niger and with the Minister of Mines, Energy and Water Mali
2. Interview with Head of Global Mining TSX and TSX-V
3. Interviews with AIM and with Sandstorm
4. Expert Opinion Articles: SRK on Sustainable Mining and Harnessing Local Talents in DRC by Robinson International

18. How are equipment providers adapting to market volatility?

Geographies

West Africa

23. Highlighted Projects

25. Redrawing the borders of a maturing jurisdiction

28. Interview with Australia-Africa Minerals and Energy Group

30. Ghana

1. Ivory Coast
2. Senegal
3. Burkina Faso
4. Interview with Burkina Faso Chamber of Mines
5. Mali
6. Interview with MS Risk

Southern Africa

1. Highlighted Projects
2. South Africa

42. Namibia

44. Botswana

Central Africa

1. Highlighted Projects
2. The Democratic Republic of the Congo

1. Interview with Standard Bank
2. Zambia
3. Interview with Zambia Development Agency

East Africa

1. Highlighted Projects
2. Tanzania
3. Sudan, Ethiopia, Madagascar, Malawi
4. Interview with Rio Tinto (QMM)

North Africa

1. Highlighted Projects
2. Cross-CountryComparison

Production and Exploration

64. Precious Metals

1. Interviews with Barrick Gold and with Impala Platinum
2. Interviews with Endeavour Mining and with Harmony Gold
3. Interviews with B2Gold and with Resolute Mining
4. Interviews with Perseus Mining and with Fortuna Silver Mines
5. Interview with Xtra-Gold Resources and with Akobo Minerals
6. Interviews with Hamak Gold and with TRX Gold
7. Battery Metals

1. Interviews with Afritin Mining and with Lepidico
2. Interviews with Tantalex Lithium Resources and with Atlantic Lithium
3. Rare Earths

1. Interviews with Lindian Resources and with Ionic Rare Earths
2. Interviews with Peak Rare Earths and Namibia Critical Minerals

87. Graphite

1. Interviews with Northern Graphite and with Black Rock Mining
2. Base Metals

1. Interview with Ivanhoe Mines
2. Interviews with Deep South Resources and with Orion Minerals
3. Diamonds

1. Interviews with Lucara Diamond and with Gem Diamonds
2. Interviews with Sociadadie Mineira de Catoca and with Debswana

1. Uranium

1. Interviews with Elevate Uranium and with Madison Metals
2. Interviews with Global Atomic and with Goviex Uranium
3. Coal

108. Interview with Menar

Services and Equipment

112. A new generation of demand

1. What have been the main trends and developments of 2022?
2. Consolidations in the Services space

All interviews for the book were conducted between July and December, 2022

This research has been conducted by Lorena Postelnicu-Stancu, Germaine Aboud and Marta Armengod. Edited by Mungo Smith. Graphic Design by Kaori Asato

A Global Business Reports Publication

For updated industry news from our on-the-ground teams around the world, please visit our website at gbreports.com subscribe to our newsletter by signing up to our VIP list through our website, or follow us on Twitter: @GBReports

4	MACIG 2023	Global Business Reports	5

Introduction

"It is essential to move into emerging and underexplored mineral belts to maintain the discovery rate as part of a balanced development strategy. Our Africa & Middle East region is our most consistent producer of excellent performances on all fronts, as well as a rich store of gold and copper growth opportunities."

-Mark Bristow,

President & CEO, Barrick Gold

Image courtesy of Antony Trivet.

EDITORIAL - INTRODUCTION

Global Business Reports

MACIG 2023

EDITORIAL - INTRODUCTION

Introduction

Inflation woes and African mining

I believe commodity prices will show resilience even as they retreated since last year. Mining companies sit on strong balance sheets, and many have a backlog of planned investments that will be rolled out in the next year.

Mike da Costa CEO of Global Mining, Murray and Roberts (M&R)

prices stay stubbornly high, defying predictions that its run will be short-lived.

Estimated to hold 30% of the earth's mineral resources, according to the World Atlas, the African mining industry is incredibly diverse, not lacking any of the important materials mined globally. Gold is mostly found in the Birimian Greenstone Belt in West Africa, the Atlas region of Morocco, and the Arabian-Nubian Shields of Egypt. Copper is mostly mined from the Copperbelt in the DRC and Zambia, but also in Lim- popo, South Africa, a province also known for PGMs. Diamonds are famously found in Botswana, Angola, South Africa and Le- sotho; while iron ore is in abundance in Guinea and the North Cape region of South Africa. Uranium is extracted in the Mer- soï Basin in Niger and the Namib desert of Namibia, bauxite in Guinea, graphite in the Cabo Delgado region of Mozambique,

its own unique OPEX climate. At a gold price at over US$1,600/ oz, and average all-in-sustaining-costs (AISC) under US$1,000, the gold industry continues to enjoy a high margin that buffers inflated overheads. Diamond producers play in their own ring as demand for the hard gemstone weakened and expenses rose. By contrast, uranium producers are excited about a buoyant market.

A manageable OPEX is not only dependent on inflation in- puts, but also on profitable outputs at the selling price. Trigon Metals, a Canadian junior operating in Namibia, brought the historical Kombat copper mine into early production in De- cember 2021, preparing for commercial production this year. But as the price of copper lost much of the value accrued during the pandemic, Trigon was forced to pause mining: "The dramatic fluctuations in the copper price from US$4.5/lb to

The African mining sector never seemed to swim in the same waters as the rest of the global industry: It neither fully rides the high waves, nor flounders in a low tide such as we see today. Inflation hit differently in Africa, in terms of equity valu- ations, project CAPEX and OPEX, as well as the ability to raise finance. One might guess that African operators are experiencing worse inflation compared to their Canadian or Australian peers. Logistics can be tougher and therefore more ex- pensive. A higher-risk jurisdiction can be penalized by banks and equity buyers.

But it must also be noted that African players have developed greater resilience against global shocks.

Regardless of what happened over- seas, African miners and explorers have always had to deal with issues from within the continent, including security concerns, power blackouts, poor infra- structure, and unstable governance, in a mix specific to each country. While navigating these challenges, African players have developed projects with robust economics, leveraging on easy-to-find and easy-to-mine high grade and large

tonnage deposits, as well as cheaper local procurement. Juniors have learned how to make investors look beyond the veil of jurisdictional uncertainty, while producers have become astute at operating mines profitably in some of the harshest environments, whether mining for diamonds at 3,000 meters altitude in Lesotho or developing some of the largest uranium mines in the deserts of Ni- ger. These aspects have toughened the African industry, but not insulated it from the vicissitudes of upset global markets.

Inflation, caused by excess liquidity and a spike in energy prices, has been the main culprit of the current economic malaise. To stop the economy from overheating, the Fed increased interest rates sharply, causing markets to tumble - the S&P 500 contracted by 24% in the first nine months of 2022. Fears of a synchronized global recession have started to mount as real GDP growth is flattening out below 2% in both the US and Europe. Africa is expected to grow above the global average at 3.7% this year, but inflation, both imported and domestically instigated, is the highest in the world at 13.7%.

and lithium projects have developed all around the DRC, Ghana, Zimbabwe, Mali and Namibia. Rare earth projects are emerging scattered across the continent. According to Africa Mining IQ, the continent counts 735 gold projects, 178 coal, 109 uranium, 150 diamond, 108 platinum, and 89 iron ore projects. Known best for gold, diamond and cobalt production, Africa is also beginning to assert itself in new economy elements, like lithium and REEs.

The volatility in commodity prices created a double blow for our clients in addition to cost flare-ups. However, inflationary pressures are also pushing our clients to be more selective in their reagent

purchases and go for products that promise higher throughputs and an optimized beneficiation process, with less waste.

Justine Stubbs-Hult

Co-Founder and Group CEO, Axis House

around US$3/lb put us in a money-losing position; moreover, recent drilling results showed there was an opportunity to find higher grade ore at surface that was not part of the original mine plan," said Jed Richardson, Trigon's CEO.

Trigon initially fast-tracked production to take advantage of the unusually high copper prices, but even at relatively high copper prices against a 10-years trend, inflationary pressures throw the operation into a negative margin. An adjustment is taking place, raising the bar on what makes "a high price." Higher operational expenses demand proportionally higher commodity prices to make projects viable. For instance, the uranium spot price, double what it was pre-pandemic, is still far from allowing new projects to come onstream, thinks Mur-

As the dollar strengthened to its highest level in two decades, reaching parity with the euro, investors rushed to the greenback, causing a contraction in metal prices, since most commodities are priced in US$. S&P GSC Industrial Metals is down by 19.9% year-to-date (YTD), while the benchmark for precious metals, S&P GSCI Precious Metals, is down 8.52% YTD. According to Reuters, nickel and palladium were the only metals whose price appreciated in 2022, while platinum, gold, silver, zinc, lead, copper, aluminum and tin lost value. At the opposite end, the prices of lithium, rare earths, and uranium have rallied in 2022. Coal also had a strong run and

Impact on OPEX

In an environment of heightened inflation, African miners and juniors still benefit from lower discovery and operating costs, with many expenses incurred in local currencies and most ore bodies found close to surface and amenable to cheaper mining methods. Weaker local currencies have also favored local suppliers, as imports in US$ became more expensive.

Energy, together with labor, reagents, logistics, and equipment are the biggest OPEX items for mining companies. Fuel represents circa 30% of costs for B2Gold, the mid-tier operating the Fekola gold mine in Mali. The company expects a 24% increase in the cost per ounce produced this year on account of inflationary pressures but also operational-related factors: "For FY 2022, we expect to be at the upper end of the original total consolidated cash operating cost guidance range and within its original total consolidated all-in sustaining cost guidance range," said B2Gold's president and CEO, Clive Johnson.

Each commodity, and probably each project, finds itself in

8	MACIG 2023

Global Business Reports	9