PERTH (miningweekly.com) – ASX-listed junior Lindian Resources has struck an agreement with privately held Sarmin Bauxite to acquire a 75% interest in the Lelouma bauxite project, in the Republic of Guinea.
Under the terms of the agreement, Lindian would issue more than 30.67-million shares, at an implied price of 1.6c each, to Sarmin’s existing shareholders, and has agreed to fund all of the Lelouma project expenditures, until the completion of a definitive feasibility study (DFS).
Within 12 months of completing the DFS, the existing shareholders of Sarmin could elect to exchange their remaining interest in the company in exchange for a 1% royalty, which will result in Lindian holding all of the Sarmin shares.
As part of the transaction, Lindian will assume responsibility for current trade creditors within Sarmin of up to a maximum of $110 000.
The Lelouma project currently has a Joint Ore Reserves Committee-compliant resource of 847-million tonnes, grading 45.1% aluminum oxide and 2.1% silicon dioxide.
Over $10-million of historic expenditure has been incurred at the project by previous owners, including Mitsubishi Corporation.
The resource is thought to be amenable to openpit mining to produce a direct shipping ore without the requirement for processing or beneficiation, and is located just 40 km from Lindian’s existing Gaoual conglomerate bauxite asset, and within haulage distance of existing rail infrastructure and ports.
Lindian has received firm commitments to raise A$1-million in a share placement to sophisticated investors, through the issue of more than 61.3-million shares, to fund planned work activities and to supplement working capital.