JOHANNESBURG (miningweekly.com) – Australian minerals development company Gulf Resources has signed a sale-and-purchase agreement with diversified resources group Rio Tinto for the acquisition of the Namekara mining operation, in eastern Uganda.

Namekara was considered one of the largest high-grade vermiculite mineral deposits in the world, and was capable of supporting a low-cost, long-life operation.

Gulf Resources reported on Thursday that it intended to inject $500 000 working capital into the operation over the next 12 months, to bring it to a sustainable production rate of 8 000 t/y of vermiculite product, as agreed to in the sale and purchase agreement.

The company further planned to expand the operation to achieve 25 000 t/y by 2012.

While the specific terms of the agreement were confidential, the cash consideration component of $1-million would be paid on a deferred basis until the end of March, 2012.

The sale agreement included Namekara’s tenements both for exploration and mining, a processing and power plant, and a mine office together with all associated infrastructure and equipment.