TORONTO (miningweekly.com) – TSX-listed Africo Resources, which is building a copper mine in the Democratic Republic of Congo (DRC), has reached an agreement with the country's government on amendments to the mining contract for the firm's Kalakundi project, it announced on Wednesday.
Africo shares were up 39,13%, at C$0,64 a share, by 15:24 in Toronto, after the firm announced it would retain its 75% interest in the project. The stock touched a high of C$0,65 earlier in the day.
The Kalakundi mineral rights are held by a company called Swanmines, in which Africo holds a 75% stake and the DRC State-owned miner owns the remaining 25%. The split will remain the same, Africo said on Wednesday.
However, the company has concluded and signed an amendment agreement, in which it agreed to pay Gecamines $1,6-million a year for a four-year period.
An existing 2,5% royalty payable to Gecamines on gross sales from the mine will also remain in place.
"With the favourable conclusion of the mining review, we can pursue corporate financing and development that will benefit all stakeholders,” said president and CEO Tony Harwood.
The firm will maintain the project and continue with community programmes until market conditions improve, he said.
The Kalukundi project is located within the Kolwezi district of Katanga province in the south–east of the DRC, 32 km west of Freeport-McMoRan Copper & Gold's Tenke Fungurume project.
The DRC began a mining contract review in 2007, focusing on contracts which were entered into during the country's 1998 to 2003 civil war and the subsequent transition period.
Several companies, including Moto Goldmines and Anvil Mining, have already concluded the process, and have agreed to changes in the terms of their contracts. However, both firms retained the same percentage of equity interest in their respective assets.