MMG Limited (MMG) (HK.1208) is pleased to announce that it has reached agreement with IMX Resources Limited (IMX) to undertake a joint venture (JV) interest in their Nachingwea project, which includes the Ntaka Hill Nickel Sulphide Project, located in south-east Tanzania.
The project is at an advanced exploration stage with significant nickel sulphide resources as previously defined by IMX.
MMG Exploration has identified and prioritised areas of interest during the course of its investigation and due diligence and plans an extensive exploration program to increase the resource considerably in terms of both tonnes and grade. Initial exploration under the JV is expected to commence in September 2013.
MMG, the manager of the JV, will earn a maximum 60% interest in the Nachingwea project by sole funding expenditure of US$60 million over a five-year period. MMG has an option to acquire an additional 20% interest in any mining development generated from the JV.
MMG Executive General Manager Exploration, Mr Steve Ryan said the joint venture added to the breadth of MMG’s exploration portfolio and broader strategy of building a leading global diversified minerals and metals company.
“Exploration is an important part of MMG’s growth strategy and this joint venture provides us with an opportunity to build our portfolio through an advanced stage project.
“Since acquiring Kinsevere in The Democratic Republic of Congo in 2012, MMG has continued to increase its presence in Southern Africa, which we believe is a highly prospective region in several commodities including nickel sulphide.
“We are excited about the prospect of working in partnership with IMX to further develop the potential of the Nachingwea project,” Mr Ryan said.
Upon a decision to develop a project being made, the parties will form a separate operations joint venture.
The agreement will become effective upon the satisfaction of certain conditions including approval by the Fair Competition Commission in Tanzania.
Summary of Agreement:
• MMG may earn up to a 60% JV interest in the Nachingwea project by sole funding expenditure of US$60 million over a five year period structured with 3 stages:
- Stage 1 – MMG has committed to sole funding expenditure of US$10 million over the first 12 months to earn a 15% JV interest
- Stage 2 – MMG may elect to sole fund a further US$25 million within a further 18 months and increase its JV interest to 40%
- Stage 3 – MMG may elect to sole fund a further US$25 million within a further 30 months and increase its JV interest to 60%
• MMG will become manager of the JV and will initially focus on deep drilling at Ntaka Hill whilst accelerating assessment of the regional geology
• Upon a decision to proceed to project development being taken, MMG has the option to increase its JV interest to 80% for a cash payment to IMX at the then fair market value