The option and joint venture agreement of Afri-Can Marine Minerals Corp. and Deep South Mining (Pty.) Ltd. with Teck Cominco Namibia Ltd. (previously reported in Stockwatch on July 2, 2008) has been approved by the Ministry of Mines and Energy of Namibia. The agreement is effective on July 28, 2008. The Haib copper project in southern Namibia comprises one prospecting licence held by Deep South. Afri-Can has terminated its pre-existing option with Deep South in consideration of certain payments under this agreement.
Under the terms of the agreement, Teck Cominco shall have the option to acquire a 70-per-cent indirect beneficial interest in the property by incurring exploration expenditures on the property totalling $2-million (U.S.) and incurring optional non-cumulative cash payments to Deep South totalling $700,000 (U.S.) over four years. Once Teck Cominco has acquired its 70-per-cent interest, Deep South will have the option to convert its 30-per-cent interest into a 2-per-cent net smelter royalty (NSR), payable to Deep South and Afri-Can as to 50 per cent each, or finance its 30-per-cent share of continuing exploration and development costs. In the event that Deep South does not finance its share of continuing costs and its share in the joint venture is diluted to less than 20 per cent, the remaining interest will be transferred into a 12-per-cent net profit interest (NPI) payable to Deep South and Afri-Can as to 50 per cent each. In the event that Teck Cominco decides to bring the property into commercial production, Teck Cominco will pay a $1-million (U.S.) production bonus, payable to Deep South and Afri-Can as to 50 per cent each, within 60 days of the completion date of the mine.
The Haib copper exploration licence is located in the Karas region of southern Namibia, eight kilometres from the Orange River and the South African border. Haib is a typical porphyry copper-molybdenum deposit hosted within quartz-feldspar porphyry. A National Instrument 43-101, filed by Afri-Can in 2004, quotes historic indicated resources of 1.3 billion tonnes grading 0.23 per cent at a 0.1-per-cent copper cut-off (the technical report, entitled “The Haib copper porphyry project — October, 2004,” is available on Afri-Can’s website). It is important to note that the qualified person who completed the above-mentioned 43-101 technical report has not done sufficient work to classify the historical estimate as current mineral resources. Therefore, Afri-Can is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon. Teck Cominco plans to re-evaluate the known mineralization and test unexplored areas within the concession.
Pursuant to this agreement, in consideration for geotechnical services rendered since 2004 including use of the historical database, Vivian Stuart-Williams shall receive 300,000 shares of Afri-Can upon receipt of the approval by the authorities.
