Operational Update

   10.03.2010


Operational Update

Sunkar Resources plc (AIM:SKR) is pleased to announce an update on its wholly owned Chilisai Phosphate Project in Kazakhstan.


Highlights
 


Mining

Mining operations in 2009 were in line with the Company's plans. A total of 1,020,749 tonnes of ore was extracted, meeting all current obligations under its subsoil use contract.

Since commencing mining in September 2008, the Company has furthered its experience and knowledge of the main factors affecting the mining operation in NW Kazakhstan and confirms that year round mining is possible.


Beneficiation

The beneficiation process is a simple dry crush down of the run of mine ore to below 25 mm and screening out fines at 2mm. As planned this has consistently produced a 17% P2O5 content concentrate at a P2O5 recovery rate of approximately 79%. At 31 December 2009 a total of 180 thousand tonnes of ore had been processed resulting in 90 thousand tonnes of concentrate.


Milling and railroad loading facilities

Chilisai 17% P2O5 concentrate was used in Soviet agriculture before the historic operations ceased in the early 1990's. The Company has had the milled concentrate tested by a local institution, to certify that it complies with the Kazakhstan national standard for DAR (or 'flour') as a low grade fertilizer. In addition, the Company supplied some DAR to agricultural institutions for field testing on 2009-2010 crops and has also obtained expressions of interest to supply this material to Kazakh farmers.

In 2009, the Company sought to conserve cash by outsourcing grinding of the concentrate to cement plants mills; however the cement plants in the area have been kept busy by their core business, due to the continued Kazakh government sponsored construction program and were reluctant to switch their mills to other products. Accordingly, no outsourced milling arrangements for bulk quantities were available and therefore in late 2009 a decision was made to invest in the Company's own milling capacity in order to produce DAR in 2010.

Currently a milling and railroad loading complex is under construction which will be connected to the main rail line that crosses the deposit. The mills have a design capacity of 280 thousand tonnes of DAR per annum and the entire project will cost US$7 million (US$2.5 million was spent in 2009). This facility is intended to be operational by the end of Q2 2010, and the Company expects to start selling to local farmers in Q3 2010.


Bankable Feasibility Consultancy

The Company is currently in the final stages of negotiating a consultancy agreement for a Bankable Feasibility Study for ammoniated phosphate fertilizer production. A further announcement will be made once this is finalized.

Serikjan Utegen, CEO of Sunkar, commented:

"I am pleased to report that we are meeting our targets thanks to the commitment and hard work of our staff. We have made significant progress and gained valuable experience which will help us face the challenges of 2010.

We have laid the groundwork for two strands of our business strategy: firstly to develop a direct application rock business to fund and sustain our early mining commitments, and secondly to move forward with the Bankable Feasibility Study for our longer term plan to build an integrated ammoniated phosphate plant."
 


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