PERTH (miningweekly.com) – ASX-listed Vital Metals has struck a deal with fellow-listed Tungsten Mining to divest of its Watershed tungsten project, in Queensland, for A$15-million in cash.
Vital told shareholders on Wednesday that the proceeds of the sale would enable the company to maintain its aggressive exploration programme in West Africa, particularly the Bouli gold project, in Niger, where its maiden reverse circulation drill programme is reporting continued success.
A recent independent review into the Watershed project estimated that it will require a capital investment of A$105.8-million to develop a 2.5-million-tonne-a-year operation, with a mine life of ten years. The project is estimated to have a post-tax net present value of A$150-million and an internal rate of return of 32%.
The project is development ready, with granted mining leases and an environmental authority for an openpit development.
Tungsten Mining CEO Craig Ferrier said on Wednesday that the company was delighted to have agreed terms for the purchase of the project.
“Tungsten Mining have a stated objective of becoming a globally significant player in the tungsten industry. The Watershed project complements our existing portfolio of advanced tungsten projects and substantial inventory of contained metal.”
The transaction is subject to a number of conditions, including a due diligence, execution of ancillary deeds relating to land use agreements and royalty deed, as well as Vital obtaining regulatory and shareholder approvals.
Vital is expected to call a shareholders meeting shortly.