Arc Minerals to form joint venture with Anglo American in Zambia

0

Rainbow Minerals has reached an agreement with a subsidiary of Anglo American, it announced on Thursday, to form a joint venture on its copper-cobalt project in Zambia’s North West Province.

The AIM-listed company said Anglo American would be entitled to retain a 70% stake in the joint venture, for a total investment of up to $88.5 million, including cash of up to $14.5 million. of dollars.

Upon signing the joint venture agreement, a vehicle would be formed with initial stakes by Anglo American and Arc of 70% and 30%, respectively.

Arc said Anglo American would be entitled to retain a 51% stake by financing the $24 million exploration within three and a half years of signing the company.

It is also expected to make cash payments to Arc Minerals totaling $14.5 million in five specific installments.

After the completion of the first phase of the project, Anglo American would be entitled to retain an additional 9% stake, for a total stake of 60%, by funding $20 million of additional exploration within two years.

After the completion of this second phase, Anglo American would then be entitled to retain an additional 10% stake, for a total stake of 70%, by funding $30 million within two years of the end of the second phase.

Anglo American, as long as it holds the largest stake in the company, would have the right to appoint three directors, and Arc would have the right to appoint two.

The decisions of the board of directors of the joint venture would be adopted by a simple majority.

An exclusivity period had been agreed up to 90 days to allow for due diligence, and up to an additional 90 days for negotiation and execution of joint venture documents.

“This agreement represents a major milestone for Arc and follows many months of negotiations,” said executive chairman Nick von Schirnding.

“I am delighted to sign this agreement with Anglo American which, once the definitive agreements are signed and completed, will result in significant investment potential by a large and reputable mining company in properties in North West Zambia and a period very exciting ahead for us.”

At 12.22pm BST, shares of Arc Minerals rose 11.39% to 5.01p.

Reporting by Josh White on Sharecast.com.

Share.

About Author

Comments are closed.