JOHANNESBURG (miningweekly.com) – To fast-track scaled production of lead mineralisation at the Kombat mine, in Namibia, TSX-listed Kombat Copper has signed a memorandum of agreement with an unnamed Namibia-based company.

"This agreement represents a positive step forward for the company in what has been a challenging sector faced with a low commodity price environment.

“We will benefit from this partnership as we now have the potential to start generating income from the Kombat property as our partner starts a scaled mining approach, while we support the project with our extensive infrastructure and knowledge of the Kombat deposit,” CEO Bill Nielsen said.

Further, the company believed the agreement would set the stage to place it in a sound financial position and to undertake detailed technical engineering studies on other areas of the Kombat mine.

This agreement also maintained activity on the mine site, facilitated its mining licence and brought local employment and labour to the area.

Kombat Copper expected its partner to focus on the Kombat East area, looking at both underground and surface mining of known occurrences of significant lead mineralisation, while assessing the Gross Otavi deposit located 10 km to the west of the Kombat mine, where a historic resource had been defined.

The Kombat East area had shaft and ramp access, which allowed for a relatively quick start-up of operations. The Kombat mill would also be refurbished by the company’s partner to produce lead concentrates.

The details of the agreement would be provided upon the completion of a definitive agreement, which the company expected to negotiate in early 2016.

It was being structured to provide monthly cash income to Kombat Copper, enabling all corporate costs in Namibia to be covered and for an aggressive revenue-sharing model on the majority of production.