Ferrex plc JV: Changara Project Update
London, June 1, 2012 AEST (ABN Newswire) - Baobab Resources plc (
LON:BAO), the iron ore, base and precious metals explorer with a portfolio of exploration projects in Mozambique, advises that, through mutual agreement, the Joint Venture with Ferrex plc ('Ferrex') relating to the Changara project will be terminated with immediate effect with Baobab retaining 100% of the project.
SUMMARY
- The Joint Venture was established in 2010 to explore the manganese and base metal potential of Baobab's Changara project, a non-core greenfields asset considered prospective for sedimentary exhalative (SedEx) style mineralisation.
- Ferrex is focusing resources on its flagship manganese project in Togo and as a consequence has chosen to withdraw from the Joint Venture.
- Ferrex will pay Baobab US$39,521 for the shortfall in expenditure committed as per Stage 1 of the Joint venture agreement (total expenditure to date by Ferrex is c.US$260,000). Baobab retains 100% ownership of the Changara project.
- Work completed during the Joint Venture has identified numerous targets for follow up phases of exploration.
Commenting today, Ben James, Baobab's Managing Director, said: "Baobab would like to thank Ferrex for its support in developing the Changara project since 2010 and wishes the team all the best with their endeavours in Togo. Baobab remains firmly committed to developing the Changara project and is currently assessing strategic options to further the exploration effort."
CHANGARA PROJECT
The Changara project comprises four exploration licences covering an area of 525km² located approximately 100km southwest of the Provincial capital of Tete and flanking Zimbabwe's north-eastern border. The national power grid passes within 15km of the project's eastern boundary.
The licences are underlain by lower Proterozic rocks of the Rushinga Group which flank the north-eastern margin of the Zimbabwe Craton. Although the area has experienced limited historical exploration, it is considered highly prospective for SedEx / Broken Hill Type polymetallic base and precious metal and manganese mineralisation and hosts numerous occurrences of zinc, lead, manganese, iron ore, fluorite, copper and silver.
In July 2010, Baobab entered into an unincorporated Joint Venture with Southern Iron. Southern Iron was subsequently incorporated into AIM listed Ferrex plc as a wholly owned subsidiary and is hereby referred to as 'Ferrex'. The Joint Venture is structured such that Ferrex may earn an increasing participatory interest in the Project of up to 80% through funding four prescribed stages (please refer to RNS dated 19 July 2010 for further details).
During Stage 1 of the Joint Venture, an extensive soil geochemistry survey covering an area of c.455km² across all four of the Changara exploration licences was completed (representing approximately 87% of the total project area). The samples have been analysed with a hand held XRF unit. Interpretation of the final data set is ongoing; however interim results have identified a series of multi-element (lead, zinc, manganese, +/-copper) targets coincident with prospective geological settings. Follow-up assessment of the highest ranked manganese targets has returned promising rock chip results of up to 36.4% Mn (sample CNZ031).
Ferrex committed to funding not less than US$300,000 of exploration expenditure during Stage 1 of the Joint Venture, after which their project interest would remain at 0%. Total expenditure to date totals c.US$260,000 and Ferrex will pay the Company US$39,521 for the shortfall in expenditure as per the Joint Venture agreement.
Baobab understands Ferrex's need to focus resources on their flagship manganese asset in Togo being in a similar position with its Tete pig iron project where the Company is completing a pre-feasibility study. Baobab remains firmly committed to developing the Changara project and is currently assessing strategic options to further the exploration effort.
The information in this release that relates to Exploration Results is based on information compiled by Managing Director Ben James (BSc). Mr James is a Member of the Australasian Institute of Mining and Metallurgy, is a Competent Person as defined in the Australasian Code for Reporting of exploration results and Mineral Resources and Ore Reserves, and consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.
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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