PERTH (miningweekly.com) – ASX-listed junior Bryah Resources has struck a farm-in and joint venture (JV) agreement with fellow-listed OM Holdings to hunt for manganese on the Bryah Basin project.
Under the terms of the agreement, OM will spend up to A$7.3-million to earn a 70% interest in the manganese mineral rights of the Bryah Basin project, in Western Australia.
OM Holdings will be required to spend an initial A$2-million by the end of June 2020, to acquire an initial 51% interest in the JV, and a further A$1.8-million at Bryah’s election, to increase that stake to 60%.
A further A$2.5-million of additional project expenditure will be required to take OM Holding’s stake to 70%.
Bryah MD Neil Marston said on Tuesday that the agreement with OM Holdings was a game-changing event for the company and its shareholders.
“The OMH Group has manganese mining expertise and is seeking new sources of manganese ore to replace its Bootu Creek production in the near future. This means that we are both strongly aligned to Bryah’s stated aim of moving from explorer to manganese ore producer in the near term.”
Marston added that the agreement with OM Holdings also significantly de-risked the company’s manganese production strategy, as OM Holdings was looking for a feeding source to supply its own smelter in Malaysia.
Meanwhile, Bryah on Tuesday also announced the exercise of its option to purchase the Horseshoe South manganese mine and manganese rights over a 154 km2 area adjacent to the mine.
The Horseshoe tenements will also be subject to the farm-in and JV agreement with OM Holdings.
The Horseshoe South mine historically produced some one-million tonnes of high-grade manganese between 1948 and 1969, and between 2008 and 2011.
“Field work in 2018 confirmed the potential for shallow drilling to identify additional mineral resources on these tenements. With the exciting new manganese JV with OM Holdings in place, we decided to exercise the options early and we look forward to start drilling at Horseshoe South and other areas next month,” Marston said.