Senegal – ASX-listed phosphates explorer and project developer Minemakers has entered into a non-binding Memorandum of Understanding (MoU) with Senegal-based Mimran Natural Resources (MNR).
The MoU will see Senegalese equity partner, MNR, provide A$28 million in funding. The funding will ensure that the development of the Baobab phosphate project small mine is fully funded from a capital and working capital perspective and the majority of funds raised will be available for the exploration and project development of the Baobab Project beyond the small mine.
Minemakers will issue a 20% stake in Baobab Mining and Chemicals Corporation (BMCC) to MNR for about A$15.6 millon and the transfer of a phosphate exploration permit in the Republic of Senegal held by MNR to BMCC.
Minemakers will also issue approximately 103 million ordinary fully paid shares to MNR, bringing MNR’s interest in Minemakers to 19.9%, at a price of A$0.117.
The parties expect that the introduction of MNR as a shareholder of BMCC will satisfy the requirement in the Senegalese mining code for Minemakers to have a Senegalese equity partner in order to expand beyond a small mine permit.
The placement is planned to be completed in two tranches. The first tranche of shares will be issued immediately following completion of the BMCC Investment and the second tranche after shareholder approval for the issue of shares has been obtained.
On completion of the second tranche and subject to MNR holding no less than 10% of the shares in Minemakers and to the approval of the TSX, Minemakers shall appoint Mr David Mimran as a director of Minemakers.
“The opportunity to introduce a highly regarded and financially substantial Senegalese partner for the Baobab project is of huge benefit to Minemakers. The new funding, in addition to Minemakers existing cash, not only provides for the total development and working capital requirements of the Baobab phosphate project as a small mine, it also provides substantial surplus funds which will be directed towards the exploration and development of the Baobab Project beyond the small mining project, says Minemakers Managing Director and CEO Mr Cliff Lawrenson.
“We continue to see great potential in the Baobab phosphate project and this development allows us to move to a full mine permit in parallel with commencing mining as a small mine,” he says, adding that the small mining project covers 5 km2 out of our current 1 553 km2 tenements.