Firering Strategic Minerals LON:FRG the Cyprus-based, AIM-listed mining company earlier this week released news that it had sealed an agreement with an unnamed multinational commodity trading company to provide logistics revenue streams at its Limeco, quicklime project in Zambia.
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The two-year agreement will provide USD600,000 to USD720,000 of revenue annually to Firering, as the company advances Limeco in Zambia towards an expected first production date in 4Q24. This will provide the quicklime mine with a positive operational cashflow even before it starts core production.
The Cypriot company is currently in the process of securing an offtake agreement with a number of copper producers. The company had already started selling stockpiled quicklime at the end of last year, and is in the process of ramping-up its production efforts,
To be totally honest, I’d only known about quicklime (formally Calcium Oxide or CaO) from cheap gangster movies, where villains wearing nose and mouth coverings dispose of their victims by shovelling powdery dust over their bodies, making them just… disappear.
Quicklime: a multi-use chemical throughout history
In fact, this is a Hollywood myth. Quicklime doesn’t actually dissolve bodies like acid, instead it desiccates them, staving off putrefaction. Other notable historical uses of quicklime have been on the ancient and medieval battlefields where the substance was deployed as an early chemical weapon to blind and disorientate advancing armies. It may have been a core ingredient of the anti-ship weapon, Greek Fire.
In today’s world quicklime has a much more mundane industrial use. It is used in the process of steelmaking; to produce paper and pulp, and in a method to purify water. It’s an essential material in making cement and mortar and is a starter commodity chemical base for many synthesised chemical compounds. It can also improve soil fertility, neutralise acidic water in wastewater plants, clean up contaminated soil and water and is even occasionally used as a food additive. It is also very cheap to produce, by heating base materials that contain limestone to at least 825 degrees Celsius in a kiln, a process called lime-burning.
Contiguous demand for quicklime from Copperbelt
Firering has been developing two projects, with its flagship Limeco mine in Zambia, which when in full production will produce between 600 tonnes and 800 tonnes of quicklime a day. The Zambian project will be used to supply miners in Zambia’s storied Copperbelt, who currently must import the quicklime for their industrial processes from South Africa. To date the project has had around USD100m invested in it, and Firering currently holds a 20.5% stake in Limeco, with an option to increase this to 45%. Once fully operational Firering expects Limeco will become the largest quicklime operation in Zambia, able to support the Copperbelt’s rapidly expanding copper production needs.
The company is also developing a Lithium and Tantalum project in the Ivory Coast’s northern reaches. This project is still in its early exploration process. Firering, founded in 2019, listed on AIM in November 2021, and took control of the ex-Glencore LON:GLEN quicklime project in August 2023 for around USD5m in partnership with Clearglass Investments, after the multinational miner sold its Mopane copper mine in Zambia to ZCCM Investments Holdings [LON:ZCC] for USD1.5bn and had no more need of a quicklime plant in the country. Limeco’s assets in Zambia comprise a limestone quarry; a two-stage crushing circuit with an installed capacity of 300 tonnes per hour and a lime plant. During the past two years quicklime has been trading between USD160/tonne to USD218/tonne.
At the time Firering said it expects Limeco to be profitable within 12 to 24 months, with a view to starting dividend payments as soon as possible. The project is debt-free with an estimated resource of 73.7Mt @ 95.3% CaCO3 and an estimated limestone stockpile of 190,000 tonnes, which will be used to start production. Although still in loss-making territory, Firering has made some moves in its short history and is definitely a miner worth keeping an eye on.
The company’s shares opened the week at EUR2.969 and have fallen 56% over one-year and are down 30% year-to-date, which might present an opportune buying moment.
