- Local Namibian group to undertake small scale mining operation to exploit manganese occurrence within Kunene Co-Cu project area in exchange for royalty payments
- Manganese occurrence previously evaluated and deemed to be too small for Namibia Critical Metals to develop but is economic for small scale producer
- Cash flow from royalty payments will contribute to continued exploration and development of the Company’s Kunene Co-Cu Project
HALIFAX, NS / ACCESSWIRE / February 6, 2019 / Namibia Critical Metals Inc. ("the Company" or "Namibia Critical Metals") (TSXV:NMI) today announced that, through its wholly-owned subsidiary company Kunene Resources Namibia (Pty) Ltd. ("Kunene Resources"), it has signed an agreement ("the Agreement") with a private Namibian group ("the Group") to allow the pegging of a mining claim covering a small manganese occurrence within EPL 4347 which is held by the Company. The Agreement will allow the Group to develop a small scale mining operation to produce manganese mineral concentrates in return for a sliding scale royalty payable to the Company based on the grade of concentrate produced and prevailing commodity prices. Namibia Critical Metals has reviewed the available technical information on the occurrence and concluded that is not of sufficient scale to be of interest to the Company. This arrangement allows for the benefits of future commercial production to be realized by local enterprises and advances small scale mining operations within Namibia.
Pine van Wyk, Chief Executive Officer of Namibia Critical Metals stated, "We are pleased to have reached this agreement which can provide meaningful jobs and cash flow to a Namibian company while at the same time monetizing a small scale mining opportunity not of primary interest to the Company. With success, the operation will provide Namibia Critical Metals with some modest cash flow which will support our larger scale operations in the area."
Provisions of the Agreement
Under the terms of the Agreement it is contemplated that the Group will acquire the mineral rights for the exploitation of manganese over a small area covering the known extents of the manganese occurrence through application to the Ministry of Mines and Energy for a mining claim. The Group will also have the right to establish a works area to provide for the installation of ancillary equipment to support development of the mining operation. The Agreement will remain in effect so long as the Group retains its rights in accordance with the Minerals Act. The Company will relinquish its mineral rights over the area covered by the manganese mining claim.
As consideration for the consents given by the Company, the Group will pay a royalty in respect of the manganese extracted calculated as a sliding scale royalty ranging from 1-5% tied to the percentage grade of the manganese and to the US dollar price achieved for the sale of each dry metric ton unit of manganese which is the internationally agreed-upon unit of measure for manganese ore pricing. The royalty is capped at N$100 (approximately CDN$10) per dry metric ton.
All costs and liabilities pertaining to the mining operations will be borne by the Group.
Background on Manganese Occurrence and Company Due Diligence
The manganese occurrence was discovered by Kunene Resources in 2013 and evaluated over a three-year period as the Olulilwa Manganese Project. A comprehensive exploration program comprised of detailed surface mapping and diamond drilling was undertaken in 2016 to consider the technical and financial feasibility to mine the occurrence by open pit methods and to build a pilot plant to produce manganese concentrate. It was concluded that the Olulilwa manganese beds had the potential to be developed into a small-scale manganese mine.
The Company re-logged diamond drill core from the 2016 program and re-sampled to determine if any potential for base metals exists in the area covered by the manganese occurrence. Results do not indicate any mineralization of economic significance for copper, lead, zinc or other metals of interest outside of manganese.
Donald M. Burton, P.Geo. and President of Namibia Critical Metals Inc., is the Company's Qualified Person and has reviewed and approved this press release.
About Namibia Critical Metals Inc.
Namibia Critical Metals Inc. holds a diversified portfolio of exploration and advanced stage projects in the country of Namibia focused on the development of sustainable and ethical sources of metals for the battery, electric vehicle and associated industries. The common shares of Namibia Critical Metals Inc. trade on the TSX Venture Exchange under the symbol "NMI".
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information please contact -
Namibia Critical Metals Inc.
Don Burton, President
Tel: +01 (902) 835-8760
Fax: +01 (902) 835-8761
Email: [email protected]
The foregoing information may contain forward-looking information relating to the future performance of Namibia Rare Earths Inc. Forward-looking information, specifically, that concerning future performance, is subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Company's filings with the appropriate securities commissions.
SOURCE: Namibia Critical Metals Inc.