Savannah Resources, Rio Tinto Tweak JV Pact to Start Project Immediately
October 11 2016 - 3:35AM
Dow Jones News
By Alex MacDonald
LONDON--Savannah Resources PLC (SAV.LN) said Tuesday it has
entered into a new joint venture arrangement with mining giant Rio
Tinto PLC (RIO) that will allow the two to start developing their
Mozambican heavy mineral sands deposits immediately.
The commercial terms of the new consortium agreement are
materially the same except that Savannah and Rio Tinto have now
agreed to transfer legal ownership of their respective projects,
Savannah's Jangamo project and Rio Tinto's Chilubane and Mutamba
projects, to a new joint venture only at a future date following
the receipt of a mining lease for the new joint venture. Previously
work on the project could only start following the deal closure,
which has been twice extended to allow for more time to secure
necessary approvals from the Mozambique government.
Savannah will continue to operate the newly formed
Mutamba/Jangamo project and have the right to increase its initial
10% stake in the project to 51% by undertaking scoping,
pre-feasibility and feasibility studies.
"Agreeing an arrangement that enables exploration activities to
be conducted on a unified basis across the Mutamba, Dongane and
Jangamo projects makes significant commercial sense, effectively
combining three areas which are part of the same, continuous
mineralization trend," said Savannah Chief Executive David
Archer.
Savannah said it will focus on conducting a scoping study for
the projects, which it plans to start immediately and complete in
the first quarter of next year.
The joint venture amalgamates Savannah's mineral resource base
of 65 million metric tons of ore with 4.2% heavy minerals sands
grade and Rio Tinto's yet-to-be-confirmed resource base of between
7 billion to 12 billion tons of ore with 3% to 4.5% heavy minerals
grade.
Rio Tinto has agreed to purchase all of the joint venture's
heavy mineral sands under a long-term commercial contract from any
mine that may be developed in the project area.
Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
October 11, 2016 03:20 ET (07:20 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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