TORONTO (miningweekly.com) – Vancouver-based Africo Resources' Democratic Republic of Congo (DRC) subsidiary Swanmines has signed a memorandum of understanding, with a government-owned power utility in the country, the firm announced on Tuesday.
Africo owns 75% and DRC State-owned miner Gécamines holds the balance of Swanmines, which in turn owns the rights to the Kalakundi project, in the south-east of the country.
According to the MoU, Africo will finance studies into reinforcing the electrical system capacity of Société Nationale d'Electricité (SNEL), in order to guarantee the availability of power to Swanmines.
It will also study the diversion of high-voltage power lines to enable the mining of the area that the lines currently overhang.
Swanmines has agreed to pay the cost of the studies and raise the funding required for the installation of the required infrastructure, and SNEL will supply high voltage as needed at the official rate and will reimburse Swanmines’ funding out of revenue from the sale of power, Africo said in a statement.
“We’re delighted to have completed this essential step,” said president and CEO Tony Harwood.
“With roads, water, rail and electricity onsite and C$89-million in cash reserves, Africo is well positioned for future potential development,” he added.
Last month, Africo gave its shares a welcome boost with the news that it had reached an agreement with the DRC government on amendments to the Kalakundi mining contract.
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