AIM-listed Bushveld Minerals, a diversified mineral development company with projects in South Africa and Madagascar, has announced the signing of a Memorandum of Understanding between its wholly owned subsidiary, Greenhills Resources and VBKom for the joint development of the Mokopane tin project.
VBKom is a South African specialist consulting company operating primarily in the mining industry. Greenhills Resources, Bushveld’s tin platform, was established to develop a pan-African portfolio of tin assets with a near term production profile.
Under the terms of the memorandum of understanding, VBKom commits to conduct due diligence on the Mokopane tin project. If the outcome is successful, VBKom intends to enter binding agreements to provide capital investment and technical support for the development of the Groenfontein and Zaaiplaats deposits in return for equity participation in the project. The equity participation will not exceed 50%.
The memorandum provides for VBKom to conduct due diligence on the Mokopane tin project for a period to 31 January 2017.
The joint development effort is expected to build on the 2014 Mokopane tin project scoping study of the two deposits, Groenfontein and Zaaiplaats. The study envisaged an initial 691 000 tpa run-of-mine operation to produce 700 tpa of 99.5% tin purity metal.
The results of the study included a pre-tax investment rate of return of 34.6%, all-in cash cost of $14 276/t tin for a $16 million capex and using a long-term tin price of $22 928/t.
Fortune Mojapelo, CEO of Bushveld Minerals, said: “We have articulated a strategy of consolidating a critical mass of mineable, low-cost tin resources with a near term production profile for Greenhills Resources.
“The signed MoU, which introduces a potential credible technical and financial partner for the Mokopane Tin Project, is a welcome step towards achieving that goal. We look forward to developing a long relationship with VBKom, subject to the results of the on-going due diligence.”