Avenira Ltd (ASX:AEV) has been granted an exploitation permit by the Government of Senegal for the Gadde Bissik area within its Baobab Phosphate Project.
The permit was received by Avenira's 80%-owned subsidiary Baobab Mining and Chemicals Corporation SA and covers an area of 75 square kilometres around the former Gadde Bissik Small Mine.
Granting of the permit is a major step in Avenira's Baobab feasibility study which is expected to be complete in the December 2018 quarter.
'Permit underpins all future steps'
Avenira managing director & CEO Louis Calvarin said the grant of the exploitation permit was a milestone for the company's Baobab expansion and upgrade investment project.
"Receiving the permit underpins all future steps including funding the project implementation and increases our company's feasibility study momentum."
The permit will trigger a restructure in Avenira's subsidiary with the Senegalese government holding a 10% free-carried interest in the legal entity owning the permit and the new structure will be exempt from paying certain taxes.
Substantial mineral resource
A Senegalese exploitation licence is granted for a maximum initial duration of five years and is renewable for one or more periods of a maximum of five years each until depletion of the deposit.
This differs from a five to 25-year mining concession which is reserved for deposits containing substantial proven reserves and requiring large investments for development .
The permit area's indicated mineral resource is estimated at 41.8 million tonnes at 19.4% phosphate and the inferred mineral resource within the permit area is estimated at 247 million tonnes at 16% phosphate.
The indicated and inferred mineral resources within the permit area represent 99% of the Boabab's total estimated indicated mineral resource and 77% of the total estimated inferred mineral resource.