Bushveld Minerals Limited (LON:BMN) has confirmed plans to pursue the acquisition of a significant interest in the Uis tin project in Namibia following the successful completion of due diligence.
The group’s subsidiary Greenhills Resources will buy a 49.5% stake in Dawnmin Africa, which owns 85% of the project.
The Namibian government owns the remaining shares in Uis, which is one of the largest undeveloped opencast hard rock tin deposits in the world.
Greenhills will pay £650,000 in shares for the stake in Dawnmin and Erongo Tin will remain the majority shareholder with a 50.5% interest.
Erongo will spend up to A$2.0mln towards a scoping study and the acquisition of processing equipment.
Erongo has agreed to grant Greenhills an option to buy a controlling interest in Dawnmin through the acquisition of an additional 1.0% holding for US$1.2mln.
Greenhills also has the option to earn a further 20% in Dawnmin, including 10% in return for providing funding of up to US$1mln to take the project to pre-feasibility stage and another 10% for putting US$1mln towards a bankable feasibility study.
Following due diligence on the project, Bushveld said it has identified significant high grade zones that it has recommended form the basis for early production.
Pilot scale production at the existing plant, which is currently being refurbished by Erongo, is being targeted for the second half of 2017.
The project is estimated to host about 20,000 tonnes of tin.
"The completion of the Acquisition would see Bushveld Minerals acquire a substantial interest in one of the largest undeveloped opencast hard rock tin deposits in the world, positioning Greenhills as one of the most significant tin platforms on AIM,” said Bushveld’s chief executive Mojapelo.
“Significantly, under the agreements, Bushveld is not oblidged to spend cash on the project until the Erongo obligations of producing a scoping study or spending A$2.0 million have been met.”
The news comes a day after Bushveld said it has received clearance from South African authorities for its acquisition of a 78.8% stake in Strategic Minerals Corporation from Evraz Corp.
The company’s wholly-owned Bushveld Vametco Limited will pay a total US$14.8mln for the shareholding in Strategic Minerals after the South African Department of Minerals Resources approved the deal.
Bushveld said the deal will be completed on Friday.