PERTH (miningweekly.com) – Phosphate developer Minemakers has inked a memorandum of understanding (MoU) with Senegal’s Mimran Natural Resources which could result in a A$15.6-million direct investment into the Baobab phosphate project, in Senegal.

Under the terms of the MoU, Mimran would gain a 20% interest in Minemakers subsidiary Baobab Mining and Chemicals Corporation by investing A$15.6-million in the project and transferring a phosphate exploration permit in Senegal to the subsidiary.

Minemakers would issue a further 103-million of its own shares to Mimran, bringing the company’s shareholding in Minemakers to 19.9%, for a price of 11.7c a share.

The share placement and direct investment in the Baobab project resulted in a combined funding of some A$28-million.

Minemakers MD and CEO Cliff Lawrenson on Wednesday said the additional funding would ensure the development of the Baobab project's small mine was fully funded from a capital and working capital perspective and that the majority of the funds raised would be available for the exploration and project development of Baobab beyond the small mine.

“The opportunity to introduce a highly regarded and financially substantial Senegalese partner for the Baobab project is of huge benefit to Minemakers. The new funding, in addition to Minemakers’ existing cash, not only provides for the total development and working capital requirements of Baobab as a small mine, it also provides substantial surplus funds that will be directed towards the exploration and development of the Baobab project beyond the small mine.”

Lawrenson said the transaction would also allow Minemakers to move to a full mine permit in parallel with starting mining as a small mine.

The small mine covered 5 km² of the current 1 553 km² tenement.

In May, Minemakers announced a maiden inferred mineral resource of 68-million tonnes, grading 22% phosphorus pentoxide (P₂O₅) at the Gadde Bissik prospect, which forms part of the greater Baobab project.

Some 25-million tonnes of inferred resource grading 23% P₂O₅ was reported within the small mine permit application area of Gadde Bassik East.

The Senegalese government granted Minemakers a small mine permit over the Gadde Bassik East project in May, allowing for unlimited mining and processing within the 5 km² area.