JOHANNESBURG (miningweekly.com) - Aim-listed Weatherly International has entered into a binding agreement to increase its ownership of private Namibian company China Africa Resources Namibia (CARN) from 25% to 90%.
CARN, which owns 100% of the high-grade Berg Aukas underground zinc/lead/vanadium project near Grootfontein, in Namibia, was previously 100% owned by former Aim-listed China Africa Resources (CAR), which is now known as the LSE-listed Pembridge Resources.
In December 2016, 100% of the shares in CARN were distributed through a dividend to existing shareholders of CAR. The two largest shareholders of CAR, at the time, were Weatherly with 25% and Hong Kong East China Non-Ferrous Mineral Resources (ECE) with 65%.
As a result, Weatherly owns 25% of CARN, ECE owns 65% of CARN, and the remaining 10% of CARN is held by the remaining minority shareholders of CAR at the time of the dividend.
Weatherly and ECE have now entered into a binding agreement whereby Weatherly will buy all of ECE's shares in CARN for $600 000.
The transaction is subject to regulatory approval in Namibia, following which the full consideration will be paid to ECE immediately. The company expects to fund the transaction through operating cash flow but in the event that it cannot, Weatherly has obtained a waiver from Orion Mine Finance to use part of the uncommitted $10-million loan announced on July 28 last year to fund the transaction.
CAR in 2014 published a prefeasibility study (PFS) for Berg Aukas which indicated a Joint Ore Reserves Committee- (Jorc-) compliant mineral resource estimate of 1.23-million tonnes at 15.47% zinc, 3.84% lead and 0.33% vanadium oxide in the indicated category.
The PFS also included a Jorc-compliant probable reserve estimate of 1.7-million tonnes at 11.16% zinc, 2.76% lead and 0.23% vanadium oxide.
The PFS estimated a post-tax net present value of $29-million and a post-tax internal rate of return of 25%.
The 2014 PFS was based on assumed prices of $2 000/t for zinc and lead, with Weatherly stating on Monday that prices for these commodities have since improved.
The vanadium is present in the mineral descloisite, which has a limited market, and the PFS assumed no credit was received for the vanadium content.
Weatherly has also initiated an update of the PFS to examine the impact of these improved prices and updated capital and operating cost estimates on the project's key financial metrics.