PERTH (miningweekly.com) – Junior Alara Resources has moved to take a majority interest in the Khnaiguiyah zinc/copper project, in Saudi Arabia.
The ASX-listed company reported on Friday that it had entered into a heads of agreement (HoA) with joint venture (JV) partner United Arabian Mining Company to acquire a further 10% interest in the project, taking its share to 60%.
Alara has been involved in the Khnaiguiya JV since 2010. A 2013 definitive feasibility study (DFS) found that the project, which would require a capital spend of some $257-million, could deliver 1.4-million tonnes of zinc concentrate and 210 000 t of copper concentrate over its 13-year mine life.
Although the initial equity arrangement had been suitable for a resource development and the DFS work, the JV partners had recognised that the equity arrangement would be problematic for the project’s next stage of development.
The HoA would now allow Alara to increase its shareholding in the project, while allowing United Arabian Mining to acquire shares in the ASX-listed developer.
“The agreement between the parties is a key and critical milestone for both the JV relationship and the Khnaiguiyah zinc/copper project,” said Alara CEO and MD Philip Hopkins.
“Once the HoA has been transitioned into the final amended shareholders agreement and is approved by Alara shareholders, the company will work closely with the JV partners' executive team to take this project into the next stages of finance, development and ultimately production.”