311122E – MRG METALS SECURES OPTION TO ACQUIRE JANGAMO PROJECT
London, 9 Nov (AIM) – The Australian-based mining company MRG Metals on Wednesday announced that it has signed an agreement with the British company Savannah Resources under which it can acquire the Jangamo heavy mineral sands project in the southern Mozambican province of Inhambane.
Under the option, MRG has 45 days to undertake due diligence on the project. If MRG decides to go ahead with the transaction it will then have a 16-month option period during which it would fund the development of the project, at a cost of up to half a million US dollars. The purpose of this work programme is to get the project to a stage where it can satisfy the requirements of Mozambique’s National Mining Institute (INAMI).
During this period, MRG Metals would have the option to buy the mining licence, ML 9735C, for 800,000 US dollars, in cash or shares. Subsequently, MRG would pay Savannah Resources a one per cent royalty on revenue generated once the project becomes profitable.
According to the company’s chairperson, Andrew Van Der Zwan, the mining licence is well-progressed and operations could begin as early as next year.
In a separate statement, the chief executive of Savannah Resources explained that “the proposed transaction would complete Savannah’s planned withdrawal from Mozambique and enable us to focus 100 per cent on the ongoing licensing and development of the Barroso Lithium Project”.
The Jangamo license was originally held by the Mozambican company Matilda Minerals. However, Savannah acquired an 80 per cent interest in Matilda Minerals in October 2013. The licence covers 11,948 hectares of land and is valid until April 2044, with the possibility of a 25-year extension. According to test drilling, the area contains ilmenite, rutile, and zircon.
Ilmenite and rutile are used to make white pigments for paints, paper, and plastic. Titanium can be extracted from these ores and used to manufacture metallic parts where lightweight and high strength are needed. Zircon is used for abrasive and insulating purposes and monazite contains rare earth elements.
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