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Concentrations of phosphate at the Chilisai Licence Area are found in a shallow (average overburden in the licence area is 3 metres), thin (approximately 1 metre), flat-lying, practically continuous sedimentary layer occupying most of the licence area of approximately 836 square kilometres. Three distinct lithologies are present in the phosphate bearing zone; from top to bottom, a weakly cemented plate, a nodule zone, and a pebble zone.

In historic reports the P2O5 content averaged 10.1% without much variation vertically or horizontally. According to the Competent Person's Report that is a part of the Admission Document, resources are more than sufficient to support a conceptual 10 million tonnes per year mining and processing operation producing up to 1.76 million tonnes of DAP per year for 56 years.

 

Work Plan 2009-2010

Sunkar’s current work plan is based on three separate processes.

1. Extraction of phosphate bearing ore from the Chilisai deposit in accordance with the subsoil use contract.
2. Pursuing sales of 17% P2O5 crushed dry concentrate (Direct Application Rock).
3. Completion of the Bankable Feasibility Study on the development of the fertiliser manufacturing plant, which would produce high value added end user fertilisers such as diammonium phosphate and/or monoammonium phosphate.

Mining

Early mining operations commenced in September 2009. Ore extraction to date has been undertaken by a surface miner (manufactured by Wirtgen) or by using bulldozers / excavators.

Under the subsoil use contract, Sunkar achieved requirement to extract 200,000 tonnes of ore during 2008 and 1,000,000 tonnes of ore in 2009.

Mobile beneficiation equipment was introduced in November 2008 to produce dry concentrated ore with a P2O5 content of approximately 17% (up from the approximate 10% contained in the raw ore). The beneficiation plant capacity is currently being extended, aiming to match the current rate of extraction. The beneficiation process produces mine rejects which equates to approximately 50% of the raw extracted ore. These mine rejects are being used as backfill in the reclamation process.

Sales

Sunkar is pursuing two separate avenues of sales.

1. Sales of concentrate ore to neighbouring country fertiliser manufacturing facilities to produce end user fertilisers such as Ammophos
2. Sales of milled dry concentrate to local farmers to use as direct application rock. The concentrate was certified for the purpose during the Soviet era.

Bankable Feasibility Study (“BFS”)

The BFS is a core task for progressing the overall project and represents a critical path item preceding project finance agreements and subsequent construction of the fertiliser processing facilities. On March 31, 2010 SNC Lavalin was appointed as a BFS contractor for the Chilisai Project. SNC Lavalin is now in the process of prepearation of BFS with first results expected to be released in H2 2010 in the Preliminary Information Memorandum. Final results of the BFS are expected to be available in H1 2011.

Phosphoric Acid Pilot Plant testing

As a precursor to the appointment of the BFS engineering contractor, the dry concentrate was tested in the series of Pilot Plant Tests to confirm the rock’s ability to produce phosphoric acid of a quality suitable for diammonium phosphate and monoammonium phosphate manufacturing. Sunkar has chosen to establish the optimal process for producing the phosphoric acid and to determine the target product list in advance of appointing the BFS contractor. 

Samples of beneficiated rock have been sent to three separate technical contractors; Jacobs Engineering and KEMWorks in Florida, USA and Prayon Technologies, Belgium. Pilot Plant Tests performed by these contractors produced the following results:

• Pilot Plant Tests confirmed that 17% phosphate rock can generate phosphoric acid
• No significant difference in processing costs compared to mass traded rock grade of 32-34%
• Acid post-treatment test by KEMWorks generated internationally accepted grade DAP (18-46-0, 90% water soluble)
• Jacobs Engineering produced internationally accepted grade MAP without any special treatment of phosphoric acid


 Technical Advisor

Mr Chris Neser has been appointed as a Technical Advisor to Sunkar to advise on all technical and financial aspects of the project. Mr Neser has over thirty years of experience within the phosphates industry gaining hands-on experience in mining, beneficiation, phosphoric acid and DAP production, fertilizer logistics as well as international phosphate marketing, most recently as a consultant to Agrifos Fertilizers Inc. Between February 2007 and July 2008 he was Deputy CEO Operations, for Jordan Phosphate Mines. From 2004 to 2007 he was Business Director in charge of completing the feasibility study on the Saudi Arabian Mining Company's Al Jalamid Phosphate Project.


JORC Resources Estimate

As part of the competent persons report (CPR) contained in the AIM Admission Document, Behre Dolbear estimated the JORC resources by aligning historical data compiled under the Soviet Classification System.
In 2008 Sunkar contracted Wardell Armstrong International (WAI) to produce a JORC compliant resource estimate for the Chilisai project. In January 2010 WAI prepared JORC compliant mineral resource estimate covering some 40% of Company's Chilisai licence area with the following highlights:

• The JORC resource estimate covers 40% of the Sunkar licence area. This is the area closest to the proposed fertiliser plant site
• The area contains more than sufficient resource to meet the first 20 years of planned ore extraction at a rate of 10 million tonnes per annum
• 293 million tonnes in the JORC Measured and Indicated categories with a grade of 10.6% P2O5 at a 5% cut-off grade for a total of 31 million tonnes contained P2O5
• Total resource including Inferred ore is 475.4 million tonnes with a grade of 10.6% for a total of 50 million tonnes contained P2O5
• Observations from trial pits and long trenches, which bound 400m x 400m mining panels, confirm the phosphate rock in the Licence Area forms a layer that is fairly uniform in terms of thickness and properties but varies in terms of its structure (occurrence of top plate, nodule and pebble zones within the ore body)


BFS Contractor SNC-Lavalin