Minerals processing company BMR Group has entered into an agreement with Blue Square, under which it will pay Blue Square a performance fee of $500 000 relating to work performed, to date, at its Kabwe project, in Zambia.
BMR has further agreed to make payments to the company in full settlement of a demand from Blue Square for quantum meruit fees in respect of corporate advisory and technical support services Blue Square provided to support the company's recent efforts to secure the restoration of its small-scale mining licence at Kabwe.
The agreement also covers corporate advisory and technical support services Blue Square agrees to continue to provide in Zambia in relation to the Kabwe project, including in relation to the clarification of the conditions attached to the restoration of the licence.
Under the agreement, in respect of ongoing services being provided, BMR agreed to pay Blue Square a further fee of $50 000 a month for at least six months.
In the event that the company terminates the agreement having received revised licence conditions, any unpaid portion of the further fee of in aggregate $300 000 as at the date of termination will become payable in full.
Further, BMR has agreed with Jubilee Metals Group that settlement of the payments to Blue Square will be made through the placing of a sufficient portion of its holding of just over 63.1-million ordinary shares of Jubilee.
Accordingly, BMR has entered into an addendum to its agreement with Jubilee, whereby Jubilee waived lock-in restrictions over sufficient shares to be sold through a broker nominated by Jubilee to satisfy the payments to Blue Square and associated legal costs.
Jubilee on Monday confirmed that it has reached an agreement in support of BMR’s efforts to resolve the settlement of approved past creditors, by allowing BMR to allocate a sufficient portion of its existing holding of ordinary shares towards settlement of these creditors in an amount of about $800 000.
“We are making every effort to ensure the greatest chance of success for the company. We view the total fees payable to Blue Square in the context of the hugely valuable project at Kabwe and of the value already added and to continue to be added by Blue Square,” commented BMR chairperson Alex Borrelli.
He added that the company expects Blue Square's efforts to impact considerably on BMR's ability to successfully bring Kabwe into production and enable realisation of the significant returns Kabwe is able to generate over a long period of time.
"We are making excellent progress on the Kabwe project, with the construction of the primary leach circuit well under way. Final tests on the ore handling systems are expected to conclude shortly to confirm equipment selection,” said Jubilee CE Leon Coetzer.