JOHANNESBURG (miningweekly.com) – Aim-listed Richland Resources’ subsidiary Tanzanite One Mining on Thursday signed a full and formal legally binding joint venture (JV) agreement with Tanzania State Mining Corporation (Stamico) relating to the operation and ownership of tanzanite mining licence 490/2013.

Under the ten-year agreement Tanzanite One and Stamico would each have a 50% undivided participating interest in the JV.

"Today's agreement secures us a new, ten-year mining agreement and a clear alignment of interests with the government and people of Tanzania,” Richland Resources CEO Bernard Olivier said.

The operations would be run by Tanzanite One, which would be responsible for the day-to-day mining operations and all associated obligations. The company would also, as the operator, report to a joint operating committee to be established by the parties.

Richland's cutting factory Urafiki Gemstones EPZ had been awarded a three-year contract for the cutting, polishing and marketing of all material produced by the JV operations.

Further, under the agreement, Stamico would reimburse Tanzanite One with a sum of $4-million in recognition of previous expenditure incurred by Tanzanite One in developing mine infrastructure prior to the date of issue of the mining licence.

It would pay this using 40% of its share of the net residual profit, until the amount was paid in full.

Richland also pointed out that all revenue and profits earned from Tanzanian activities other than the mining operations on Block C by Tanzanite One would not be affected by the JV agreement, adding that all existing assets, including buildings, machinery and plant and equipment currently owned by Tanzanite One and used for the purposes of operations under the former special mining licence, would remain in the sole and absolute ownership of the company.

Both parties also agreed to work together to evaluate the graphite resource found in the mining licence area with a view to restarting graphite mining operations and developing a mechanism for financing the graphite mining operations by attracting new investment into the venture.

Further, Stamico would facilitate and liaise with the Tanzania government to ensure that necessary regulatory and law enforcement actions were taken to curb tanzanite smuggling and illegal mining operations.