JOHANNESBURG (miningweekly.com) – Diversified mineral development company Bushveld Minerals will pursue the acquisition of the Uis tin project, in Namibia, following the successful completion of a due diligence.
Accordingly, Bushveld's wholly-owned subsidiary tin platform Greenhills Resources has signed a sale of shares and claims agreement to acquire a 49.5% interest in Namibian tin explorer Dawnmin Africa Investments from a consortium of Namibian shareholders for £650 000, payable through the issue of 41-million ordinary shares of 1p each in Bushveld.
Consideration shares comprise 29-million ordinary shares for the Dawnmin shareholding and 12-million ordinary shares to assume a $1.2-million loan from one of the consortium sellers to Dawnmin. The consideration shares will be issued on completion of the acquisition, which is subject to regulatory approvals from the Namibian government among other considerations.
Namibian tin explorer Erongo Tin holds the remaining 51.5% of Dawnmin.
Dawnmin's interest in the project is held through its 85% shareholding of Guinea Fowl Investments. The remaining 15% shareholding in Guinea Fowl is held by the Namibian State entity Small Miners of Uis.
"The completion of the acquisition will see Bushveld Minerals acquire a substantial interest in one of the largest undeveloped opencast hard rock tin deposits in the world, positioning Greenhills as one of the most significant tin platforms on the Aim,” Bushveld Minerals CEO Fortune Mojapelo stated.
He added that Bushveld is under no obligation to spend cash on the project until Erongo meets its requirement to produce a scoping study or spend A$2-million.
"This development is aligned with our long-stated strategy to establish Greenhills and [Bushveld subsidiary] Lemur Resources as attractive standalone platforms with quality strategic partners and strong dedicated management teams to deliver long-term shareholder value,” Mojapelo said.
This would entail a critical mass of mineable, low-cost resources to be consolidated at Greenhills with a near-term production profile, while Lemur Resources will endeavour to secure a quality power purchase and an independent power producer licence for a thermal coal-based power generation operation based in Madagascar.
Meanwhile, Greenhills and Erongo have also signed a shareholders agreement that will see Erongo spend up to A$2-million towards a scoping study at the Uis project.
Erongo will remain the majority shareholders in Dawnmin in the near term, but has agreed to grant Greenhills an evergreen option to acquire a controlling interest in Dawnmin by acquiring a further 1% stake for $1.2-million.
Further, following completion of a scoping study, Greenhills will have the option to earn a further interest in Dawnmin. It will be entitled to earn a further 10% stake by providing up to $1-million to take the project to prefeasibility stage.
Thereafter, it can earn another 10% interest in Dawnmin by providing a further $1-million to deliver a bankable feasibility study.