[miningmx.com] — African Eagle Resources and ASX-quoted minerals group Macquarie Harbour Mining have signed a Letter of Intent to enter a joint venture to develop a gold mine at African Eagle’s Miyabi project in Tanzania.
Under the agreement, MHM will provide all the technical expertise and funding for a feasibility study sufficient to enable MHM to make a decision to develop a mining operation at the Miyabi Gold Project. African Eagle will retain 25% of its interest in the project and its past exploration expenditure will be credited against the development costs.
African Eagle’s Managing Director Mark Parker’s comment said the transaction
provides a quick and effective route to take Miyabi into production, fully crediting
African Eagle’s past exploration expenditures against the costs of developing the
mine, which we believe will amount to a free-carry into production.
“Macquarie Harbour Mining is keen to advance Miyabi into production as quickly as possible, based on the resources already defined by African Eagle,” he said.
Part of the revenue from production will be invested in expanding the current
Joint Ore Reserves Committee (JORC) resource of 520 000 ounces of gold and extending the mine life.
“The transaction represents further delivery on African Eagle’s stated intention
of developing into an operator, bringing in like-minded partner companies for its
extensive ‘non-core’ copper, gold and uranium portfolio. African Eagle is currently
undertaking a pre-feasibility study at its Dutwa Nickel Project in Tanzania, which
will be completed around the end of the year,” Parker added.
In terms of the agreement, African Eagle grants MHM an exclusive period of up to six months to review and conduct legal and technical due diligence.
During the due diligence period, the parties will draft a joint venture agreement
under which under which MHM can earn a 75% share of African Eagle’s interest in the Miyabi Gold Project in consideration for conducting and funding a Feasibility Study, in the form of additional drilling, metallurgy, pit design, operating and capital
costs estimation, economic analysis and other work as may be needed for the Board of MHM to reach a decision to mine.
At the inception of the JV, African Eagle will have contributed $6.5m to the JV, which will be credited against cash calls by the JV after the decision to mine. Parties will invest a minimum of 12% of pre-tax net revenue into exploration
within the Miyabi Gold Project Area, contributed pro rata to their respective
interests.
