Maputo, 23 Jul (AIM) - The London-based mining company Baobab Resources has announced a joint venture between its Mozambican subsidiary, Capitol Resources, and the Australian company Southern Iron, to develop its base metal and manganese mine in Changara district, in the western province of Tete.
Southern Iron will invest $1.5 million in the project in two stages in exchange for a 50 per cent stake. A Baobab releases says that further investment "to bring discoveries to pre-feasibility status" will raise Southern Iron's stake to 65 per cent.
Southern Iron will then have an option to fund definitive feasibility studies which will give it an 80 per cent stake in the Changara project.
The joint venture, says he release "will ensure the acceleration of exploration" in Changara, where field activities are due to begin in 2010. Baobab says that it "will share technical management and operational responsibilities with Southern Iron".
Baobab's managing director, Ben James, declared "The signing of the agreement with Southern Iron has established a firm foundation from which we will be able to rapidly assess and develop the Changara project. We look forward to working with the Southern Iron team in exploring this exciting corner of Mozambique."
Under this agreement Southern Iron is obliged to invest $300,000 over 12 months to fund an initial work programme at Changara. The second phase involves further investment of $1.2 million over 18 months. At that point, Southern Iron takes its 50 per cent stake in the project.
Baobab has four exploration licences in Changara, covering an area of 525 square kilometres, near the border with Zimbabwe. Baobab undertook a soil geochemistry survey over about 70% of the project area in 2008, which indicated the presence of lead, zinc, manganese and copper.
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