Kalahari Minerals Sells Namibia Projects to North River Resources for 43% stake
by Jamie Ashcroft
proactiveinvestors.co.uk
AIM listed mining exploration group Kalahari Minerals plc (AIM: KAH) announced the Sale of its wholly owned Namibia based subsidiaries. Kalahari has agreed to sell the entire share capital of WestAfrica Gold Exploration and Crafton Diamonds to North River Resources (AIM: NRRP) for a total of approximately 266m shares in North River, equating to around £16.67m.
The Agreement is conditional upon inter alia, North River raising capital of at least £5m, which would result in Kalahari owning approximately 43% interest in North River Plc (AIM: NRRP).
.With Kalahari retaining a substantial shareholding in North River the proposed deal will create a strategic alliance between Kalahari and North River Resources. As the major shareholder, Kalahari has indicated its intention to maintain its shareholding percentage through support of future equity financings
Following the transaction, North River will acquire a number of base metal and gold assets in Namibia which it intends to develop in tandem with Kalahari. Kalahari has previously spent approximately £8m on the exploration and evaluation of the assets.
Under its WestAfrica Gold Exploration (WAGE) subsidiary, Kalahari evaluated a portfolio of properties covering approximately 2,121km2 in Western and Central Namibia. The WAGE properties occupy a dominant position on the Kalahari Copper Belt. The projects are focused on copper, lead, zinc and gold. Exploration work completed to date has focused on the Dordabis (Copper), Witvlei (Copper).
At the Dordabis Project, exploration work has resulted in the drill testing and the release of a JORC compliant Inferred Resource of 1.74 Million Tonnes (Mt) grading 0.9% Copper (16 000 tonnes in situ metal) for the Koperberg Prospect in mid 2008. While at the Witvlei Project, a conceptual scoping study, environmental baseline studies and metallurgical test work has been initiated. With the aim to assess all techno-economic parameters required to exploit Kalahari's estimated existing resource of 135 000 tonnes of contained copper.
Exploration has been undertaken over the Ubib Copper-Gold Project following an extensive geochemical survey and initial drilling. The project is located approximately 15km south west of the 4 million ounce Navachab Gold Mine. A nuclear fuels licence has also been applied for over the project area.
The Namib Lead Zinc Mine is owned by the Craton subsidiary. Kalahari has completed a detailed diamond and reverse circulation (RC) drilling programme designed to validate underground and tailings resources. Initial metallurgical test work carried out by MINTEK has demonstrated the feasibility of producing saleable lead and zinc concentrates with good recoveries being obtained.
Potential exists at Namib to increase the resource base through additional drilling over the N20 and North ore bodies as well as deep drilling to test depth continuity under the South and Junction ore bodies. Previous non-JORC mine studies indicate surface tailings and in situ underground reserves of 1.65mt at 5.7% Zinc, 1.6% Lead and 40.2 grams per ton of silver
Across the whole Namibia project North River has a defined development plan to generate medium term cash flow. Through heap leach copper projects and the Namib lead/zinc project.
Furthermore Kalahari has given its financial support behind North River’s indicative bid on a separate and significant gold deposit in Namibia, the results of which are expected in January 2010. According to North River the bid reflects its strength in conjunction with Kalahari, emphasising its ability to move quickly on opportunities with the necessary financial and technical support.
To assist North River and represent their interests Kalahari’s, Mark Hohnen and Professor Glyn Tonge will be appointed to the Board of North River as Chairman and Non-executive Director respectively. In today’s statement Mark Hohnen spoke of Kalahari’s commitment to the Namibian Project and the newly formed partnership with North River;
"This agreement marks the next stage in the development of our gold and base metal assets ... Kalahari is highly committed to Namibia and the development of its resources ... by bringing the two companies together, we can pool both parties' expertise and financial support, in order to fast track the development” |
