ANDRADA Mining has agreed to sell up to 49% in a tin, copper, and tungsten prospect in Namibia in return for $51m.
The Namibian tin miner said in an announcement on Wednesday ACAM, a private investment firm, had agreed to purchase an initial $10m for a 30% stake in Brandberg West, a former mine situated in the Erongo region of Namibia’s Omaruru District. ACAM will farm in to Brandberg West on fulfilment of development milestones.
ACAM is backed by Louis Bacon, a US billionaire, and S&F Investment Advisors, a California-based fund. Bacon’s main fund is Moore Capital Management which posted a 23% last year, according to a report by Bloomberg News. ACAM’s deal with Andrada is through its affiliate BWCAM Limited, represented by S&F’s Ross McCormick.
“This structured investment approach creates a clear development pathway for Brandberg West,” said Anthony Viljoen, CEO of Andrada. The company is scaling up its Uis mine, another brownfields development which is situated about 100km from Brandberg West.
Brandberg West grades at 4% tin but it also contains tungsten (4%), which was recently recognised by the US as a critical mineral, and 2% copper – the mineral of the moment.
The terms of the farm-in are that after the initial $10m investment, BWCAM will subscribe for a second tranche of $1m which will then give it the option of seriously increasing its exposure, by adding another $40m to the pot (for 19%).
Andrada will operate Brandberg West.
“Our strategy is to invest in experienced operators who can deliver technical excellence whilst maintaining strong community and governance standards,” said McCormick. “Andrada has demonstrated both operational capability and a clear vision for developing Namibia’s mineral potential,” he said.
Fully funded work has started on Lithium Ridge, a prospect also in Namibia that Andrada is exploring in a joint venture with Chile’s SQM. But its main operation is Uis.
The miner successfully commissioned a jig plant at Uis to increase ore throughout, mainly through third-party supply. But a dispute over rights to permits has prevented its partner, Goantagab Mining, which was to supply high-grade ore to the jig plant on a profit-share basis, from fulfilling this agreement. As the squabble over claims is a court matter, ore to the jig plant will now be supplied from Uis instead.
Shares in Andrada were nearly 6% lower in mid-afternoon London trade, but 78% higher over 12 months. This is partly owing to the vastly improved tin price, which shot up 11% in the early days of January. The metal is trading at $49,410 per ton up from $43,227/t a year ago, according to the LME data.
