PERTH (miningweekly.com) – ASX-listed Winmar Resources will require shareholder approval for its transaction with African Holding Investment Company for a 50% interest in the Luapula cobalt processing facility, in the Democratic Republic of Congo.
The company on Friday said that it had been informed by the ASX that the transaction constituted a change on the nature and scale of the company’s activities, and that it triggered the application of listing rules, necessitating shareholder approval and re-compliance with Chapters 1 and 2 of the ASX listing rules.
As part of the shareholder approval and re-compliance, Winmar will lodge a notice of meeting to seek shareholder approval fro each of the transactions making up the cobalt production acquisition, and will issue a full form prospectus under which it would complete a capital raise.
The Luapula cobalt processing facility waas constructed in 2014 at a capital cost of $80-million, is a conventional copper/cobalt leaching plant with a throughput capacity of 250 000 t/y of run-of-mine (RoM) feed. The plant has the capacity to produce 12 000 t/y of high-grade concentrates, comprising a 30% to 40% cobalt hydroxide product and a 15% to 20% copper hydroxide product.
Under the terms of the agreement, Winmar will acquire a 50% interest in the joint venture (JV) company and will be the operator and manager of the JV. Winmar will supply the RoM feed from its hard rock or tailings licences, and where applicable, third party material, for the plant.
Winmar will also have the sale and marketing rights to all of the cobalt and copper concentrates produced at the Luapula processing facility.
Winmar will be required to make a $5.5-million cash payment to acquire the 50% interest in the processing facility, to reimburse development expenditure.
In addition, Winmar will pay African Holding a royalty on sales revenue of between 1% and 3%, depending on the prevailing London Metals Exchange cobalt price in the first and third year of operations, and royalty on sales revenue between 1% and 2%, depending on the prevailing cobalt price in years four to ten, and 1% for years 11 to 15.
In addition to the JV agreement, Winmar has entered into two heads of agreements to acquire a portfolio of highly prospective cobalt exploration licences, which Winmar is hoping to develop to provide RoM feed for the Luapula processing facility.
The company is also planning to raise A$8-million through a share placement, priced at 2.4c each, to fund the up-front acquisition costs and the initial and working captial requirements for the processing facility.