Aim-listed BMR Group is in the process of acquiring a large-scale zinc prospecting licence, known as Star Zinc, from Zambia-basedBushbuck Resources for $1-million.
The two companies on Monday entered into a 60-day exclusive option agreement for the 83 km2 licence, to the immediate north of Lusaka, Zambia, which was now conditional upon satisfactory completion of due diligence and the granting of Ministerial approval to the transfer of the licence.
Under the agreement, BMR paid Bushbuck a nonrefundable deposit of $30 000, plus 16% value-added tax (VAT) to undertake and complete the requisite due diligence over the title to Star Zinc.
The 60 days can be extended to 120 days at Bushbuck’s discretion, for the Ministerial approval for the transfer of the licence to be formalised.
BMR is required, within seven days of such approval, to make payment of $1-million, plus 16% VAT and property transfer tax of 10%. The consideration is expected to be satisfied from the cash resources made available under the terms of the anticipated loan facility of $3.5-million from its offtake agreement signed with African Compass International earlier this month.
“The acquisition of Star Zinc would represent an important strategic step for BMR, as the on-site ore contains high-grade zinc, which is planned to be either blended with the tailings from the leach plant residues, to improve metal recoveries, or used to raise the plant head grade to increase production at our proposed processing plant at Kabwe,” the company said in a statement on Tuesday,
This is expected to enhance the quality of the product, subject to testwork to confirm its compatibility. This, in turn, will underpin the long-term future of BMR’s Kabwe operation.
BMR’s first priority will be to undertake a drilling programme on the karst fill/saprolitic material in the area of the present openpit to determine the extent of the as yet untested surfacemineralisation and to establish a mineable resource.
BMR plans initially to spend up to $200 000 on exploration over the next 18 months. Source: Mining Weekly