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Localisation: la seyne sur mer
Mar 20 Déc 2011 11:14
BMR signs option agreement over Chingola tailings
The option is in respect of stockpiles at three separate areas located within a 7km radius of each other.
Zambia Consolidated Copper Mines, the parastatal mining company, produced closure records in which it estimated the total above-ground resources remaining in the three areas concerned to be 98.9 million tonnes of tailings.
In aggregate, ZCCM estimated that these tailings contain 1,445,000 tonnes of copper metal.
All historic estimates are not JORC compliant and have not been verified.
The option agreement permits BMR to conduct due diligence for a period of 90 days from the lifting of the state moratorium on the transfer of already-issued licences currently in place in Zambia, with the right to extend that period by a further period of 90 days at extra cost.
The option fee payable by BMR is $275,000.
Upon exercise of the option, BMR may then acquire 80% of the three stockpiles areas, together with the relevant small-scale licences and intellectual property pertaining to each stockpile.
On the basis that BMR elects to acquire all the stockpiles in all three areas, the cost to be satisfied by BMR will be $6.5m in cash and the issue to the vendors of some 257 million ordinary BMR shares at 6p per share.
A further condition of acquiring the 80% interest will be the obligation to finance the construction of a beneficiation plant to a value of $25m.
The plant, which will remain the property of BMR, will be designed to produce an estimated 2,000 tonnes of blister copper per month.
When production begins, the vendors will be entitled to royalties on feed tonnes, payable when copper product is produced and sold, with a guaranteed minimum of $14m of royalties.
The vendors will retain a 20% interest in the project and, under a shareholders agreement, provide a strong contingent of management and key personnel.
