Six Sigma Metals

A new name and a new age commodity focus in Zimbabwe

 


 

The management team at Botswana Metals was aware of increasing market interest in ‘new age’ commodities long before the decision was made to shift its focus from base metals to battery metals late last year. The wheels of change began to turn when the ASX-listed company began to investigate its Botswana licenses for lithium and tantalum potential and culminated in the adoption of a new name – Six Sigma Metals. This renaming signifies a shift in focus towards battery metals as well as the company’s entry into a new market beyond the confines of Botswana after picking up two new age metals projects in Zimbabwe – the Shamva Lithium Project and the Chuatsa Vanadium Project.

 

Steve Groves, a non-executive director at Six Sigma, explains how the opportunity to have first mover advantage in neighbouring Zimbabwe was too good to turn down, based on the company’s expertise in Southern Africa and the sweeping changes that have recently commenced in Zimbabwe. 

 

The landlocked nation is one of the most resource-rich regions in the world, hosting the second biggest platinum reserves on the planet, along with abundant reserves of gold, coal, iron ore, chromium ore, vanadium, nickel, copper, lithium and tin. 

 

However, under former Prime Minister Robert Mugabe’s rule, which lasted from 1980 to last year, Zimbabwe’s economy drastically declined and the growth of the mineral resources sector was severely stunted. Now under new leader Emmerson Mnangagwa, the country aims to be ‘open for business’ which has paved the way for fresh investment in the mining industry. 

 

The dawn of a new era in Zimbabwe 

 

“It is no secret that there is resource potential in Zimbabwe, its just about when the time is right to dip your toe into that market – if you are too slow you’ll miss out and we think now is the time,” says Groves.  

 

“There are still a lot of things to be clarified politically and within the investment climate, but we felt if we didn’t do it now we would miss the boat. All things considered it’s an excellent opportunity in a wonderful country and we think it will be a great place to operate.” 

 

Although Zimbabwe is still only at the dawn of a new era, all the early signs have been positive for Six Sigma as it looks to establish mining operations in the country. The company’s directors were recently in-country undertaking a site visit and were highly pleased with the level of interaction with the government.

 

“Everyone was very positive about our presence there and welcoming of foreign investment. They now recognise that foreign investment is required to reinvigorate the mining industry.” 

 

Six Sigma has also keenly observed the smooth progress made by fellow ASX-listed miner Prospect Resources in advancing its Arcadia Lithium asset, which neighbours the company’s Shamva project. The government’s eagerness to expedite the Arcadia project was particularly pleasing for Six Sigma. 

 

In addition, Groves believes that fiscal regimes are slowly evolving to benefit foreign investors in Zimbabwe, typified by the recent reform to the mining legislation, whereby majority ownership by state entities is limited to diamond and platinum mines only and not the entire mining sector. 

 

“Overall, as a mining and exploration jurisdiction Zimbabwe is fantastic,” says Groves. “There is a highly skilled, well-educated workforce and a lot of mining experience in-country.

 

“The infrastructure is still good by African standards even though some maintenance is required. Power networks are in place, the roads are good, bar a few potholes, but it wouldn’t take much to repair them.” 

 

The Shamva Lithium Project 

 

Located around 65 km Northeast of capital city Harare is Six Sigma’s flagship Shamva Lithium Project. The pegmatite dyke hosting project was brought to Six Sigma’s attention by non-executive director Joshua Alan Letcher, who came on board around the time of the company’s switch in focus to battery metals. 

 

After reviewing several assets in various countries, Six Sigma decided to follow Letcher’s recommendation, inking a three-phase option agreement for the project to be executed following an initial due diligence exercise. Due diligence has involved a site visit by company management and a short drilling programme to test the thickness of lithium mineralisation and see whether it continues at depth. 

 

Results from this campaign revealed that all five holes intersected pegmatite dykes, confirming that lithium mineralisation continues at depth below surface outcrops and old workings. In addition, lithium minerals identified in the drill intersections included spodumene and lepidolite. Samples from the pegmatite intersections have been submitted to an independent laboratory in South Africa for analysis. 

 

If the results come back as expected, Six Sigma will execute phase one of the deal which will see the company take an initial 30% tranche in the project. The company will then look to advance phase two and a more dedicated drill programme aimed at defining resources in the project. 

 

“We have a minimum target size of 10 million tonnes (Mt) at an economic lithium grade of pegmatite from the project,” reveals Groves. “Phase two is essentially fleshing out what the scope of the resources are and once we’ve reached a key decision there we will acquire another 30%.  

 

“Once we have established a 10 Mt JORC resource we will execute the final part of the deal for the 20% and by then we will be into some sort of feasibility study.” 

 

Six Sigma has enacted this three-phased agreement, along with an extended due diligence period, to mitigate against risk in-country so that in the unexpected event of things not going well politically or geologically, the company hasn’t over committed early on. 

 

The Chuatsa Vanadium Project 

 

The company also recently secured the Chuatsa project, located around 140 km Northeast of Harare, a vanadium asset which was subject to historic exploration by Anglo America Prospecting in the early 1960s, although all activity at the site ceased in 1964 when the owners concluded that recovery of the resources would be uneconomical at the time. 

 

However, the same cannot be said today with the vanadium market currently experiencing a price boom, thanks to the advent of vanadium flow redox batteries, which are used in energy storage and other sustainable energy applications. 

 

While there are obvious challenges posed by a project that has been untouched for over 50 years, Six Sigma has commenced reconnaissance work at Chuatsa and is confident in the asset’s long-term potential as a significant vanadium resource. 

 

“Despite the historical exploration that has taken place there, I consider Chuatsa a virgin greenfields project,” declares Groves. “We will use the historical work as a helpful guide of where we are meant to be looking.  

 

“Our team on the ground is trying to relocate any workings, trenches and drill hole locations, then we would go back in and do soil and rock sampling and establish the extent and nature of mineralisation at surface, before going into trenching or drilling programmes to try and establish the potential of the vanadium resource.” 

 

In addition, some of the historical workings on the project have also shown significant copper content existing within the deposit, which makes for intriguing reading amongst the management team at Six Sigma. 

 

“There is an interesting suite of metals that have already been identified at the site and it’s not unknown for these things to have cobalt or a number of other metals too. When we do our initial testing, we will look for a full suite of metals.” 

 

Looking towards a pathway to production at the Shamva project, Six Sigma aims to model its own timeline on that of Prospect Resources, who have managed to break ground at its Arcadia Lithium project less than two years after acquiring it.  

 

Having a neighbouring company that has completed all the hard work with a similar project is certainly reassuring for the management at Six Sigma. “We will aim to fast track the development as much as we can,” reveals Groves. 

 

“Within 18 months I expect us to have significant resources with a high level of confidence in them, and at least commenced if not completed a feasibility study looking at a mining operation.” 

 

The Chuatsa project is more of a long-term option given the early nature of the development and the fact that it is likely to be quite a large undertaking, although the company is happy with the initial progress made at the project thus far. 

 

With a new name and a new commodity focus, Six Sigma means business in the new age metals industry, likewise does Zimbabwe as it looks to usher in a new era of prosperity, with a mineral resources sector boosted by foreign investment at the heart of the nation’s economic revival.