Mozambique Mining: Caula graphite project with new owner
New Energy has struck a deal to divest of the remaining 50% interest in the Caula graphite and vanadium project, in Mozambique.
New Energy has entered into a binding share sale and purchase agreement with private investment vehicle Auspicious Virtue Investment Holdings, which already holds a 50% interest in Balama Resources – the owner of the Caula project.
Auspicious Virtue will acquire the remaining interest in Balama for a cash consideration of A$7-million.
As part of the agreement, New Energy has agreed to conduct an equal access capital reduction, under which the company will provide a capital return to shareholders of no less than 60% of the purchase price, less the cost incurred to complete the transaction.
New Energy told shareholders that the sale of its remaining shares in Balama would reduce shareholder exposure to a dispute with Arena Investors, relating to an alleged debt of A$5.1-million. The company said that although it was confident in its dispute against Arena, a negative outcome could see Arena having a substantial claim against New Energy, which could result in nil value from the Caula project being returned to existing shareholders.
The agreement with Auspicious Virtue was subject to a number of conditions, including an independent expert concluding that the sale was in the best interest of shareholders, as well as shareholder approval for both the transaction and the capital reduction.
The company is expected to convene an extraordinary general meeting in March.
A scoping study at Caula estimated that the two-phased development would cost some A$167.6-million to develop.
The Phase 1 project would require a capital investment of some A$10.6-million to develop a project capable of producing between 10 000 t/y and 15 000 t/y of graphite concentrate, and between 14 000 t/y and 18 000 t/y of vanadium concentrate.
The Phase 2 development would require a further capital investment of A$157.6-million, and would increase graphite production to 120 000 t/y and vanadium concentrate production to 204 200 t/y
Source: Mining Weekly
You must log in to post a comment.