PERTH (miningweekly.com) – ASX-listed explorer Black Mountain Resources has signed formal documentation to acquire Namakera Mining Company, which holds two mining projects in Uganda.
In February this year, Black Mountain inked an agreement with recently established African Phosphate to acquire Namakera through the issue of 400-million of its own shares, and a 1% royalty on revenue from mineral production.
Black Mountain 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 company said on Monday that the formal documentation was signed following the completion of a detailed legal, financial and technical due diligence. However, the transaction still remained subject to shareholder and regulatory approvals.
Namakera is the owner of the operating Namakera vermiculite mine and the Busumbu phosphate projects.
The 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.