JOHANNESBURG (miningweekly.com) – Aim-listed Armadale has entered into a binding heads of agreement (HoA) with African Mining Services (AMS) to form a joint venture (JV) to develop and operate the Mpokoto gold project in the Democratic Republic of Congo’s (DRC's) Katanga province.
Mpokoto has an established resource of 678 000 oz of gold from 14.58-million tonnes of ore at 1.45 g/t gold and is set to produce about 25 000 oz/y over a nine-year mine life.
Currently, Armadale’s subsidiary Kisenge is the parent of the DRC entities that own Mpokoto and will be the JV vehicle for the transaction.
Under the HoA, which will be progressed to a more detailed JV agreement between the parties on completion of the due diligence process, AMS could earn an initial 25% interest in Kisenge, through providing funding and services to Mpokoto in two earn-in phases.
Provided AMS completes its earn-in obligations, the effect of the HoA and subsequent JV is that Mpokoto will be fully funded to commercial gold production, which is targeted for late 2017.
As part of this refocused strategy, directors Peter Marks and Justin Lewis have decided to step down with immediate effect.
“This is a significant agreement for the future of Mpokoto, bringing on board a very experienced mining partner with knowledge of the DRC and, crucially, access to funding,” Armadale CEO William Frewen said.
As a consequence of forming this JV, Armadale will have no further operational or funding responsibilities in relation to Mpokoto, other than retaining at least a 15% interest in Kisenge.