Baobab Resources (LON:BAO) Heads Of Agreement Signed With North River (LON:NRRP)
London, Nov 15, 2010 AEST (ABN Newswire) - Baobab Resources plc (
LON:BAO), the iron ore, base and precious metals explorer with a portfolio of mineral projects in Mozambique, is pleased to announce the signing of a Joint Venture Heads of Agreement (HoA) with North River Resources plc ('North River') (LON:NRRP) in relation to North River's Monte Muande magnetite/phosphorus, base and precious metal project (the 'Project') in the Tete province of Mozambique.
Highlights
- The Project hosts the Monte Muande magnetite/phosphorus deposit as well as base and precious metal occurrences.
- The Joint Venture has a four year, 3-stage investment structure:
- Stage 1 investment of US$625,000 to earn a 60% interest in the Project.
- Stage 2 investment to bring discoveries to pre-feasibility status to increase Project interest to 75%.
- Stage 3 investment to fund a definitive feasibility study to earn a 90% total interest in the Project.
- North River has the option to fund pro-rata at Stages 2 and 3 to maintain their 40% interest in the Project.
- Baobab will assume technical management and operational responsibilities for the Project. Compilation of historical exploration data has commenced and drilling is scheduled for Q2 2011.
Commenting today, Ben James, Baobab's Managing Director, said: "the North River JV represents an excellent opportunity for Baobab to expand and consolidate its position in the Tete area. The Company looks forward to working with North River in assessing the highly prospective Monte Muande area and reporting drill results as early as practicable in 2011."
Details of Heads of Agreement
North River Resources plc is an AIM listed multi commodity resource development company, focussed on southern Africa. Its current portfolio includes significant gold, base metal and uranium assets in Namibia and uranium, gold and copper assets in Mozambique. North River has an active development plan with the aim of generating production in the near term. North River is approximately 45% owned by AIM listed Kalahari Minerals plc.
Baobab Resources plc is actively developing iron / vanadium / titanium resources at its Tete Project in Mozambique. With a view to consolidating its strategic position in the Tete area, the Company approached North River with the objective of entering into an unincorporated Joint Venture relationship for the purpose of undertaking exploration activities at the Muande Project and, subject to exploration success, developing mining operations.
A legally binding Heads of Agreement outlines a three stage investment to earn an increasing participatory interest in the Project. North River has the option to participate pro-rata at both Stage 2 and 3 to maintain their 40% interest in the Project.
- Stage 1 - Baobab commits to funding a First Work Programme at a cost of not less that US$625,000 over a period of not more than 12 months. The work programme will include 2,000m of diamond drilling. Baobab's participatory interest in the Project upon the completion of Stage 1 will be 60%.
- Stage 2 - Subject to having completed the First Work Programme satisfactorily Baobab shall have the exclusive right to undertake a Pre-Feasibility Study over a period of not less than 12 months. Against Baobab having completed the Pre-Feasibility Study, its participatory interest in the Project shall increase to 75% (if North River elects not to participate).
- Stage 3 - Upon completion of the Pre-Feasibility Study, Baobab will have the option to increase their participatory interest by an additional 15% (to 90% if North River elects not to participate) by undertaking and funding a Definitive Feasibility Study over a period of not less than 18 months.
Baobab has been nominated as the operator of the Joint Venture, reporting to a management committee represented by both parties to the Joint Venture. A review of historical exploration and data compilation is currently underway with drilling scheduled for Q2 2011.
Monte Muande Project Background
The Monte Muande project comprises two exploration licences covering an area of 338km2 located approximately 25km northwest of the provincial capital of Tete. The licences are valid until Q3 2014.
The licences are underlain by the Proterozic aged Chacocoma Granite and flanking Tete Mafic Complex. A carbonatite of Cretaceous age has intermittently intruded the eastern and northern margins of the Chacocoma Granite.
Previous exploration has targeted mineralisation within the carbonatite. During the 1980's, the Geological Institute of Belgrade conducted exploratory works at the Monte Muande magnetite/phosphorus deposit. More recently, Omega Corp (and latterly Mavuzi Resources) completed detailed exploration programmes investigating the uranium, gold and copper potential of the area.
While Baobab will be reviewing and following up base and precious metal occurrences, the Company's primary focus will be to rapidly evaluate the potential of the Monte Muande magnetite/phosphorus deposit.
For the complete Baobab announcement please refer to the following link:
http://www.abnnewswire.net/media/en/docs/64185-Baobab-20101115.pdf
About Baobab Resources plc
Baobab Resources plc (LON:BAO) is a Mozambican-focused explorer with a large landholding in the central north of the country. The company's flagship project is the Tete iron ore deposit.
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