Perth, Feb 11, 2009 AEST (ABN Newswire) - ABM Resources NL (ASX:ABU) is pleased to announce that it has entered into an option agreement pursuant to which it has granted a company the option to explore, develop and purchase part of ABM's interest in three exploration licenses (2234L, 2295L and 1435L) located in Mozambique (Mimosa Tenements).
Mimosa Option Agreement Project Location and Geology
ABM acquired equity in the highly prospective Mimosa Gold Project in the under-explored Archaean greenstone belt of the Manica Province in central Mozambique, near the Zimbabwe border and approximately 800km north of the Mozambique capital of Maputo, in early 2008. The project comprises three exploration licenses (2234L, 2295L and 1435L) totalling 960 hectares of which 40 hectares are currently being worked by a well controlled, small association of approximately 200 artisanal miners. A long term agreement has been reached with the artisanal association for tenement access, exploration activities and mine development framework on that small area.
Mimosa lies in the east-west trending Manica-Mutare-Odzi Greenstone Belt which extends into Zimbabwe and has historically produced an estimated 2.5 million ounces of gold, mostly from the Zimbabwean side of the border. Until recently, very little modern exploration had been carried out in the Mozambiquen section of the greenstone belt.
Project Interests
ABM has reached the first exploration threshold of US$1 million and now holds 76.33% of the Mimosa project. Spending another US$2 million will allow ABM to increase its project interest to 86.33%. ABM holds a 67.33% interest in ABM Resources Mocambique Limitada ("ARM").
Details of the Mimosa Option Agreement Under the option agreement, the company has the option to purchase ABM's interest in ARM and a 66.33% interest in the Mimosa project within 3 months after commencement of the option agreement ("the Agreement") for an Option fee of US$50,000 payable on execution of the Agreement. The exercise of the option is conditional upon none of the other beneficial owners of the project exercising their rights of first refusal in respect of ABM's interest in the project. In the event the option is exercised and none of the remaining beneficial owners exercises their right to first refusal, the interests in the project will be as follows:
- ABM 10% free carried to completion of bankable feasibility study
- Purchasing company 66.333% and
- Remaining beneficial owners 23.667%
Upon exercising the option, the purchasing company must contribute minimum annual project expenditure of US$1 Million for a minimum period of three years after the exercise of the option.
If the option is exercised, the consideration for the acquisition of the ABM interest will be as follows:
- US$ 500,000, 5 days after the option is exercised
- US$ 500,000, 12 months after the option exercise date
- US$ 300,000, 24 months after the option exercise date
Mr Kins, Executive Chairman of ABM Resources, said: "We are very pleased to have been able to enter into the option agreements with this company and look forward to working closely with them on the project in the event that they elect to exercise the options."
About ABM Resources NL
ABM Resources (ASX:ABU) is developing several gold discoveries in the Central Desert region of the Northern Territory of Australia. The Company has a multi-tiered approach to exploration and development with a combination of high-grade production scenarios such as the Old Pirate High-Grade Gold Project, large scale discoveries such as Buccaneer, and regional exploration discoveries such as the Hyperion Gold Project. In addition, ABM is committed to regional exploration programs throughout its extensive holdings including the alliance with Independence Group NL at the regional Lake Mackay Project.
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