Afri-Can Marine Minerals has signed a letter of intent with Deep South Mining (Pty.) Ltd., regarding an option to acquire a 70-per-cent undivided interest in a major copper deposit known as Haib Copper. The exclusive prospecting licence (EPL No. 3140) is located in the south of Namibia near the South African border.
Material terms of the agreement are as follows (all amounts are expressed in Canadian dollars).
To acquire the option, Afri-Can shall make the following payments:
a cash payment of $100,000 upon regulatory approval of the
agreement;
and
- a cash payment of $100,000 upon regulatory approval of the
agreement;
and
a cash payment of $500,000 upon completion of a favourable due
diligence within 120 days of regulatory approval.
- a cash payment of $500,000 upon completion of a favourable due
diligence within 120 days of regulatory approval.
To exercise its option, Afri-Can shall incur the following exploration expenses and make the following payments:
within two years following the completion of the due diligence, the
corporation shall incur expenditures in a minimum of $2-million in
exploration activities in order to prepare an updated bankable
feasibility study;
- within two years following the completion of the due diligence, the
corporation shall incur expenditures in a minimum of $2-million in
exploration activities in order to prepare an updated bankable
feasibility study;
no later than 30 days after the completion of a favourable
feasibility study, the corporation shall issue $5.5-million worth
of its common shares to Deep South, at a market discount of 10 per cent
and issue two million warrants exercisable at a market premium of
30 per cent, exercisable for a period of three years;
- no later than 30 days after the completion of a favourable
feasibility study, the corporation shall issue $5.5-million worth
of its common shares to Deep South, at a market discount of 10 per cent
and issue two million warrants exercisable at a market premium of
30 per cent, exercisable for a period of three years;
upon completion of the production financing for the project, the
corporation shall make a final cash payment of $5-million;
and
- upon completion of the production financing for the project, the
corporation shall make a final cash payment of $5-million;
and
further to the acquisition of 70 per cent by the corporation, Deep South shall
have an option to sell its remaining 30 per cent in consideration of a
cash payment of $5-million and a 2-per-cent net smelter royalty.
- further to the acquisition of 70 per cent by the corporation, Deep South shall
have an option to sell its remaining 30 per cent in consideration of a
cash payment of $5-million and a 2-per-cent net smelter royalty.
The letter of intent is conditional and subject to approval by Canadian and Namibian regulatory authorities.
The Haib Copper deposit is an EPL covering 2,000 square kilometres and is located in the Karas region, eight kilometres from the Orange River in the south of Namibia. Haib is a classic porphyry copper-molybdenum deposit hosted within quartz-felspar porphyry dating back to the Archean age (approximately two billion years).
The following information regarding the mineral potential is based on historical mineral resource estimates determined prior to the application of National Instrument 43-101, and was obtained from various technical reports submitted to the Geological Survey of Namibia over the past years.
Since its discovery in 1948, several companies including Falconbrige Limited, Rio Tinto PLC and more recently the Namibian Copper Joint Venture (NCJV) have conducted extensive exploration programs on the property.
From 1972 to 1975, Rio Tinto drilled 120 holes totalling 45,903 metres, and in 1975 a mineral resource estimate and feasibility study was completed. The following results can still be considered today as valid historical estimates of the potential of the deposit:
Rio Tinto (1975) — indicated resource
832 million tons at 0.27 per cent Cu
563 million tons at 0.32 per cent Cu
374 million tons at 0.37 per cent Cu
Behre Dolbear (BDB), an international mining consultant retained by NCJV in 1997, compiled a block model to estimate a range of indicated resources. The results, which must be considered only as historical estimates of the potential of the concession, were as follows:
1,353 million tons at 0.23 per cent Cu;
- 1,353 million tons at 0.23 per cent Cu;
739 million tons at 0.29 per cent Cu; and
- 739 million tons at 0.29 per cent Cu; and
244 million tons at 0.37 per cent Cu (source: BDB and NCJV — 1997).
- 244 million tons at 0.37 per cent Cu (source: BDB and NCJV — 1997).
Both the Rio Tinto and BDB’s estimate of indicated resources of the higher-grade core of the Haib deposit at a grade of 0.37 per cent Cu indicate that this section of the deposit could host more than two billion pounds of copper in situ.
As part of the due diligence process, the corporation will mandate an independent qualified person who will prepare a technical report on the Haib Copper project as defined in National Instrument 43-101 in order to ensure that Afri-Can’s acquisition of the Haib project is in compliance with National Instrument 43-101.
Pierre Leveille, president and chief executive officer of Afri-Can, stated: “Haib is a major copper porphyry deposit in an excellent location, and its value has been significantly enhanced by the current conditions and future outlook in the copper market. Afri-Can looks forward to an aggressive exploration program as we review the economic potential of the deposit. Furthermore, the planned diversification of our holdings in Namibia is beginning to take form and we are convinced that our projects will increase shareholder value and also benefit our Namibian stakeholders.”
WARNING: The company relies upon litigation protection for “forward-looking” statements.
