PERTH (miningweekly.com) – Explorer Black Mountain Resources has inked an agreement with recently established African Phosphate to acquire Namekara Mining Company, which holds a vermiculite mine and a phosphate project in Uganda.
Under the terms of the agreement, ASX-listed Black Mountain would acquire Namakera Mining through the issue of 400-million of its own shares, and a 1% royalty on revenue from mineral production.
Black Mountain has further committed to investing $2.5-million in new capital into the operations over the next two years, and would assume vendor finance obligations of $3-million that would be repaid from a percentage of the net profits, over the first five years of operation.
The operating Namakera vermiculite mine started production in 2010 from a conventional openpit mining operation. The project was producing at a steady-state level of 30 000 t/y of vermiculite flake product.
Production was halted in 2012 as a result of the terms of a 25-year exclusive distribution offtake agreement, which was subsequently terminated, with production restarting, at a reduced output, in the second half of 2013.
Black Mountain was hoping to increase mine production to the previous rate of 30 000 t/y. The company was also proposing a bankable feasibility study at Namakera to increase the processing plant capacity to 80 000 t/y.
Meanwhile, at the Busumbu phosphate project, Black Mountain would complete detailed exploration work, as well as preliminary mine planning and optimisation studies, and start feasibility work in 2016, on the completion of an initial drilling programme.
Black Mountain said on Friday that the acquisition of the two projects gave the company’s shareholders exposure to Africa’s growing agriculture sector, which was forecast to increase to $500-billion in value over the next five years.
The acquisition of the two projects would be subject to a number of conditions, including Black Mountain raising up to A$2.5-million through either debt or equity to fund investment into the two projects, as well as obtaining all the necessary regulatory and shareholder approvals.