The joint venture to develop and operate the Mpokoto gold project in the Katanga province of the Democratic Republic of Congo is pursuant to the heads of agreement between contract mining services company Kisenge Mining, formerly known as African Mining Services and AIM-listed natural resource investment firm Armadale Capital signed in September this year
Phase One of the joint venture agreement will enable Kisenge Mining to earn a 25% interest in Armadale’s subsidiary, Kisenge Limited, the joint venture entity, by providing funding and projected related services up to $1.25 million. The project related services include incremental metallurgical testwork and refining the current definitive feasibility study to incorporate financing the project and initial capital works.
On completion of Phase One, Kisenge Mining has 30 days to decide whether to exercise an option to proceed with Phase Two of the joint venture agreement.
If Kisenge Mining proceeds with Phase Two, it will seek to arrange funding to put Mpokoto into production and if it successfully arranges 100% of the funding, it will receive a further 60% interest in Kisenge. This will result in Kisenge Mining holding a 85% interest in the Kisenge joint venture.
“Mpokoto has an established resource of 678,000 ounces of gold at 1.45 g/t and it has completed a definitive feasibility study based on a production rate of 25,000 ounces per year over an initial four-year mine life, for the first phase of mining,” says Armadale Capital chairman William Frewen.
“With attractive economics and a defined route to production we are confident that the project offers significant potential and we are pleased that the completion of Kisenge Mining’s due diligence has led to the start of phase one of the joint venture agreement.”
“KMP will assume operational responsibility and provide funding to further advance Mpokoto. The board is optimistic that once Kisenge Mining has completed the revised definitive feasibility study and other work it will progress to Phase Two of the joint venture agreement to bring Mpokoto into commercial production.
“If this materialises, Armadale Capital will enjoy the benefits of owning a material interest in a producing gold mine.
“This development means that management’s efforts and resources can remain focused on progressing the next phase of the Mahenge Liandu graphite project, where an initial JORC resource estimate is anticipated in the coming weeks,” Frewen added.