PERTH (miningweekly.com) – Resources investment firm Cape Lambert has resumed trading on the ASX after issues around its Kipushi cobalt/copper tailings project, in the Democratic Republic of Congo, were cleared.

Cape Lambert holds a 50% interest in the Kipushi tailings project, along with local entity Paragon Mining, which in turn holds a 70% interest in the Kipushi project, increasing to 75% through a contract with La Patience SPRL, giving Paragon the right to exploit and process tailings from Kipushi and sell the product.

Cape Lambert’s share trading on the ASX was suspended in January this year after Patience in the fourth quarter of last year terminated its agreement with Paragon on the basis of delays in the production timelines, which had resulted from the development change of repairing the existing flotation plant under a more efficient leaching plant.

Paragon disputed the termination.

Due to the concerns raised, Cape Lambert minimized work undertaken on the project since the fourth quarter of 2018, pending a resolution of the matter, while also engaging in discussions with both Patience and Paragon.

The ASX-listed company on Thursday noted that Patience and Paragon have now reached a commercial settlement, and have executed an agreement reconfirming the terms for exploiting the tailings at Kipushi, allowing the project to restart and for Paragon to increase its interest in the project to 75%.

The settlement agreement was subject to Cape Lambert providing certain warranties, including a $500 000 payment to Patience within 21 days of the settlement agreement, a monthly payment of $25 000 to Patience starting one month after the settlement agreement, which will be repayable from Patience’s future profits from the project, purchasing 42 700 t/m of tailings from Gecamine at a cost of $292 068 a month, starting one month after the date of settlement, and providing certification from a financier that project development funding has been approved, within three months of the date of the settlement agreement.

The company would also need to start production from a newly constructed gravity separation and leach plant no later than 15 months from the date of settlement.

Cape Lambert told shareholders that the warranties reflected the basis of its joint venture arrangement with Paragon, under which it was responsible for funding the working capital and capital costs of the project.

If Cape Lambert failed to meet the warranties, Patience will be entitled to terminate the settlement agreement, and Cape Lambert would lose its interest in the project.