JOHANNESBURG (miningweekly.com) – Tanzania-focused mineral exploration and development company Kibo Mining has entered into a memorandum of understanding (MoU) with fellow Aim-listed Metal Tiger that could see the formation of a 50:50 joint venture (JV) to develop the Morogoro South gold-prospective exploration portfolio.
The portfolio, which is owned by Kibo subsidiary Jubilee Resources, comprises 18 licences, offers, aplications and tenders covering a combined surface area of about 1 400 km2.
Kibo Mining CEO Louis Coetzee said the latest MoU built upon its existing working relationship with Metal Tiger.
“When established, this JV will mean that all five of the company's projects will be active and operational, which puts Kibo in a superb position,” he added.
Kibo and Metal Tiger last week announced that they would proceed with the formation of a JV agreement for uranium exploration at Kibo’s Pinewood assets, also in Tanzania.
Under the terms of the Morogoro South MoU, Metal Tiger had until February 20 to complete a due diligence process on the project and to conclude and sign a binding JV agreement with Kibo.
Metal Tiger would pay about $100 000 a year in licence renewal fees and other maintenance costs at the portfolio for at least 12 months and up to three years. Metal Tiger was further expected to spend $800 000 on project costs and an agreed exploration work programme over three years to maintain a 50% interest in the JV.
If it were to spend between $300 000 and $800 000 over the three years, its stake would revert to a 10% free carry interest. Any expenditure below $300 000 would see Metal Tiger’s interest revert back to Kibo.
As part of the JV, Kibo would issue Metal Tiger with warrants over ten-million new ordinary shares in Kibo, exercisable within a three-year term at 9p each.