Harare — Chromex Mining Plc, which is listed on the London bourse's Alternative Investment Market (AIM), has sealed a purchase deal for a 49 percent stake in Zimbabwean chrome miners Falvect Mining, for what it described as "a nominal consideration".

In a statement issued yesterday, Chromex said it had secured the exclusive right to co-develop all Falvect chrome concessions in the Shurugwi region and tribute agreements in the Ngezi area, and market 100 percent of the chrome products produced from these operations.

"In return, the company will provide working capital into Falvect and funding for the development of current projects and any additional acquisitions in Zimbabwe, which is host to significant high grade chrome ore deposits. A technical review of the contained mineralisation will commence once final agreements have been concluded. In line with the development of its business, Chromex is already investigating the economics of setting up beneficiation facilities in Zimbabwe," Chromex said in its announcement.

Chromex chief executive officer Russell Lamming said:

"The investment in Falvect is in line with our strategy of building a broad portfolio of chrome and related mineral assets across southern Africa. The timing of the acquisition is linked to the lifting of the Zimbabwean ban on exports of chrome ore and fines, effective November 1 2009 and will hopefully allow us to expand our production capabilities going forward. In spite of the challenging chrome market we have continued to invest in our operations and have a producing mine and operating beneficiation plant. Our aim is to continue to build our business, expand on our portfolio and generate value for shareholders going forward".

Chromex said it had also completed the commissioning of the first phase of its Stellite chrome beneficiation plant in South Africa in August this year and by the beginning of this month, this facility was able to operate at full design capacity, producing 42 percent and 44 percent metallurgical grade chrome concentrate.

All beneficiation to date has been fed from existing stockpiles at the Stellite mine, although due to on-going demand, the company's board expected to recommence mining operations in December 2009.

"Furthermore, the company is currently finalising the design and costing of Phase Two of the current beneficiation plant to include a dense media circuit with the ability to double current beneficiation capacity. Importantly, in addition to the capacity increase, Chromex will be in a position to market a sized lumpy chrome product in addition to the chemical and metallurgical grade concentrates that it currently produces," the company said.