Ram Resources inks formal deal to buy Greenland Resources

4th October 2010 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – ASX-listed Ram Resources has entered into a formal agreement to buy private company Greenland Resources (GRL), which holds the beneficial interest in the Motzfeldt multi-element project.

The acquisition of GRL would be done in four stages, the first of which would see Ram acquire an initial 51% interest by issuing 150-million fully paid ordinary shares, at 3c a share, along with 150-million options.

Upon the acquisition of the initial interest, Ram would have board and management control over GRL.

Ram could then look to acquire a further 14% interest in the issued share capital of GRL by paying A$1,5-million in cash within three years or sole funding A$10-million exploration expenditure within three years.

Following the completion of acquisition of the second interest, Ram could elect to acquire a further 15% by paying A$2,5-million in cash, within three years, or sole funding A$15-million of company expenditure within the same timeframe.

The remaining issued capital of GRL could be acquired by paying A$50-million and, where the value of the final interest exceeds that amount, 25% of the amount by which the final interest exceeds A$50-million.

The prospectivity of the Motzfeldt multielement project was first investigated in the early 1980s, and estimated to host a mineralised zone of 500-million tons, at an average grade of between 1 320 parts per million (ppm) and 1 480 ppm niobium, and between 110 ppm and 130 ppm tantalum.

Based on the exploration targets identified, the Motzfeldt project had the potential to become a world-class bulk tonnage tantalum/niobium/rare-earths deposit, Ram stated.

Greenland currently imposes a ban on the exploration and exploitation of radioactive elements, where they occur at above background levels, as they do at Motzfeld. This probation includes mining of these elements as byproducts.

As it stands, this law would prohibit mining at Motzfeldt. However, Ram noted that the Greenland government was working through a process of public consultation and debate on the issue of mining uranium and other radioactive elements.