Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – Aim-listed URU Metals is on the hunt for a black economic-empowerment (BEE) partner to help develop its Zebediela nickel project, in Limpopo.
Following URU’s gradual increase of its stake in the project from 33% to 100%, and the conclusion of the due diligence, the base metals and uranium explorer and development company could now move to develop the 1.5-billion-tonne nickel project.
“We have always seen the value and potential of the Zebediela nickel project, despite it being low-grade. Its size, continuity of grade and relatively easy mining makes it an incredibly large project with huge potential and long mine life … [with] low capital expenditure,” said URU chairperson David Subotic.
A National Instrument 43-101-compliant preliminary economic assessment of the project, completed in 2012, revealed indicated resources of 485.4-million tonnes averaging 0.245% nickel, and additional inferred resources of more than 1.1-billion tonnes of 0.248% nickel. The project had the potential to produce 25 000 t/y of nickel with a net present value of over $1-billion.
The buy-out followed the conclusion of a dispute between URU’s joint venture (JV) partners, Southern Africa Nickel (SAN) and BEE partner Umnex Mineral Holdings. The two parties had served a formal notice of arbitration against each other, with both partners citing a lack of performance in achieving deliverables under the SAN-Umnex JV agreement.
In November, URU acquired a 100% stake in SAN, bringing its stake in Zebediela to 74% and taking SAN’s place in the arbitration. URU paid SAN shareholders $1 and settled the JV’s outstanding obligations of $185 000 to its operating consultant, Pangea Exploration.
The arbitration ended in December after URU agreed to acquire the remaining 26% interest in the project held by Umnex.
URU now planned to issue 33.2-million shares to Umnex Minerals Limpopo in two tranches. These were subject to a lock-in agreement under which 3.3-million shares would be released from lock-in on quarterly intervals.
As part of the transaction, URU would also have the right to acquire all current prospecting right applications within 5 km of the current Zebediela prospecting rights, as well as the right to acquire any such rights granted to SAN, Pangea, Umnex or any corporate member of Umnex’s parent company, Umbono Capital Group, within the next five years.
URU would also acquire the right to explore for and develop all platinum group element, iron and copper resources on the Zebediela nickel project, which was previously excluded from the SAN JV.