By Alex MacDonald
LONDON--Savannah Resources PLC (SAV.LN) is to combine its
adjacent Mutamba, Dongane and Jangamo prospects with Rio Tinto
PLC's (RIO) Chilubane heavy mineral sands to create a
Mozambique-focused heavy mineral-sands joint venture, it said
Monday.
The projects will combine Savannah's aggregated inferred mineral
resource base of 65 million metric tons at 4.2% heavy minerals
sands grade with Rio Tinto's declared exploration target of between
7 billion to 12 billion tons, ranging from 3% to 4.5% heavy
minerals grade.
Savannah will be the operator of the joint venture and may earn
up to a 51% interest in the combined Mutamba/Jangamo project.
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.
As part of the transaction, Savannah has also entered into a
conditional agreement to acquire the remaining 20% of Matilda
Minerals Ltd. it doesn't own for A$100,000 ($77,766), payable
either with cash or Savannah shares.
"The amalgamation of the Mutamba, Dongane and Jangamo projects
makes enormous sense as it combines three areas which are
effectively part of the same, continuous mineralization trend,"
said Savannah's CEO David Archer.
Savannah will undertake the studies for the project while Rio
Tinto will be responsible for providing access to its existing
camp, facilities and equipment.
Write to Alex MacDonald at alex.macdonald@wsj.com
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