Aim-listed Keras Resources has reached an agreement with the Togo government on the future of the Nayéga manganese project.
Keras will no longer pursue an exploitation permit for the project. The permit will, instead, be awarded to State-owned company Société Togolaise de Manganèse.
The company has also agreed to transfer all its intellectual knowledge on Nayéga to the State and to provide advisory and brokerage services to fast-track the development of Nayéga.
In turn, the Togo government will pay Keras $1.7-million in cash in July, as well as an advisory fee of 1.5% of gross revenue generated from the Nayéga mine for the provision of advisory services for three years and 6% of gross revenue generated from the Nayéga mine for the provision of brokerage services for the lesser of three-and-a-half years or 900 000 t of beneficiated manganese ore produced and sold from Nayéga.
"This transaction not only finalises Keras's transition into a fully focussed high-grade organic fertiliser producer in the US but draws a line through the uncertainty related to the Nayéga asset.
"This agreement is a reflection of the constructive relationship we have with the State and sets a very clear picture of how the asset will now be developed to the benefit all stakeholders and rewards Keras for its investment to date," says Keras CEO Graham Stacey.
Keras is targeting the robust organic fertiliser market through Diamond Creek – a high-grade organic rock phosphate mine, in Utah, in the US – wholly owned through Falcon Isle Resources.
Keras will use the cash payment from the Togo government to fund the second $800 000 tranche for the acquisition of Falcon Isle, as well as for general working capital.
The ongoing advisory and brokerage fees will augment the already cash-flow-positive Diamond Creek mine, the company notes.
Keras states that it is now fully funded to fast-track the start of an exploration programme at Diamond Creek to prove up a National Instrument 43-101-compliant mineral resource; convert the existing mining permit to a large-scale mining permit; complete the construction of a granulator plant; and research the development of liquid organic products from existing product streams.