Wednesday, 02 January 2013 07:41
Korab Resources has executed a Short Form Agreement to sell the Winchester magnesite deposit for up to $33.2 million in cash and royalties to Augur Investments Oü.
Augur Investments Oü is a diversified Estonian investment company with interests in mining, infrastructure and commercial property development.
Korab negotiated sale price of $2 per tonne of JORC code compliant magnesite resource. The current resource base consists of an indicated resource of 12.2Mt at 43.1 per cent magnesium oxide (MgO) and an inferred resource of 4.4Mt at 43.6 per cent MgO.
Some $16.6 million of the consideration ($1 per tonne of resource) will be payable on completion of the sale and an additional $1 per tonne per tonne of resource ($16.6 million) will be payable as a royalty on each tonne of magnesite mined from the deposit.
The amount of royalties will be capped at $16.6 million. The agreement is binding upon the parties but is subject to the following conditions precedent to be fulfilled by 31 March 2013: Korab obtaining all regulatory and other approvals necessary for the sale of the Assets including the consent of the Minister under the Northern Territory Mineral Titles Act; and buyer confirming by written notice to Korab that no information has arisen as a result of their due diligence enquiries in relation to the Assets which could be materially adverse to the operation of a magnesite mining project.
The Winchester magnesite deposit is within the Batchelor project, 70km south from Darwin in the Northern Territory, with access to infrastructure and logistics such as rail, gas, a sealed highway and high voltage power.
Previous drilling at Batchelor to a depth of 100m outlined a high grade zone of magnesium mineralisation 7.5km long and 500m wide. Mineralisation is open at depth.
Close spaced drilling over the area 550m by 300m, which covers less than 5 per cent of the mineralised zone, outlined an indicated resource of 12.2Mt at 43.1 per cent MgO and an inferred resource of 4.4Mt at 43.6 per cent MgO.
Korab’s primary focus is to expand and develop its tow gold projects totalling 2.38 Mln ounces of JORC Code compliant resource located in Australia and Europe.
The sale of Winchester is a result of Korab’s decision made earlier in 2012 to concentrate on the development of its gold and silver projects and to divest non-core assets to generate development funding.
The current resource base of 2.38 Mln ounces is undergoing the second upgrade in six months with results expected within next two months.
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