OreCorp has announced the completion of earn-in phase and execution of conditional heads of agreement to acquire 100% of Nyanzaga Gold Project in Tanzania.
OreCorp has announced that its Tanzanian subsidiary, OreCorp Tanzania Limited, (OreCorp or Company) has now completed its earn-in obligations in respect of the Nyanzaga Gold Project (Nyanzaga or Project) in Tanzania, in accordance with the Earn-in Agreement entered into by the Company and Acacia Mining plc (Acacia), on 22 September 2015.
The Project is owned by Nyanzaga Mining Company Limited (NMCL), which is currently a wholly owned subsidiary of Acacia. OreCorp fulfilled its earn-in obligations by spending approximately US$14 million in completing a Pre-Feasibility Study and additional feasibility study related work.
Additionally, OreCorp has exercised its option to acquire an additional 26% interest in the Project, in consideration for the payment of US$3 million to Acacia. This would increase OreCorp’s interest in NMCL from 25% to 51%. The acquisition of shares by OreCorp representing a 51% interest in NMCL is conditional on approval from the Tanzanian Fair Competition Commission (FCC) and newly established Mining Commission.
The relevant applications have already been lodged with the FCC and Mining Commission. OreCorp has also signed a binding conditional heads of agreement with Acacia and NMCL to allow OreCorp to move to 100% ownership of Nyanzaga, bymaking a further payment of US$7 million. Acacia will also retain a net smelter return royalty (NSR), capped at US$15 million. The NSR will be paid at 1% with a gold price <US$1,600/oz and 2% at >US$1,600/oz gold. The acquisition of the additional 49% of shares in NMCL is conditional on the Tanzanian regulatory approvals referred to above, to allow OreCorp to increase its interest in NMCL to 100%, on the grant of the Special Mining Licence (SML) in respect of the Project and on the parties entering into definitive documents in respect of the 100% acquisition.
Nyanzaga hosts a JORC 2012 compliant Mineral Resource Estimate (MRE) of 3.1 million ounces at 4.0 g/t gold. The MRE is the foundation of a Definitive Feasibility Study for project financing purposes (Project Financing DFS) currently underway. The SML application has been lodged and is anticipated to progress through the application process following the recent formation of the Mining Commission. The grant of the SML will be required before the Project Financing DFS is completed and any financing for the construction of the Project can be undertaken. Upon grant of the SML, the Government of Tanzania (GoT) will become an equity holder in the Project, acquiring a free carried interest of not less than 16% in NMCL in accordance with the Tanzanian Mining Act. OreCorp looks forward to the opportunity to develop Tanzania’s next large-scale gold mine with the GoT, for the benefit of all stakeholders.
Source: Company Press Release