Key points
- Copper Resources Corp (CRC) can earn a 60-per-cent interest in Haib by spending $1.2-million (U.S.), reimbursing Afri-Can $200,000 (Canadian) and investing $350,000 (Canadian) in Afri-Can shares.
- A further $1-million (U.S.) in expenditures lets CRC raise its stake to 70 per cent, leaving Deep South with 20 per cent and Afri-Can with 10 per cent.
- The Haib project is exclusive prospecting licence EPL No. 3140, covering 74,563 hectares in the Karas region of southern Namibia, eight kilometres from the Orange River.
- CRC recently completed an initial public offering on the London AIM exchange and holds a cash position of approximately $16.75-million (U.S.).
Afri-Can Marine Minerals Corp. and Deep South Mining (Pty.) Ltd. have signed an option and operating agreement with Copper Resources Corp. (CRC) whereby CRC will acquire Afri-Can’s option to manage the exploration programs and earn a 70-per-cent undivided interest in the Haib copper project in Namibia. The Haib exclusive prospecting licence is located in the south of Namibia near the South African border.
Under the terms of the option agreement, CRC is able to earn a 60-per-cent interest in the Haib project by assuming all of Afri-Can’s future payment commitments to Deep South, by incurring initial expenditures of $1.2-million (U.S.), by reimbursing Afri-Can for the $200,000 (Canadian) that it has already paid to Deep South and by making an investment of $350,000 (Canadian) in common shares of Afri-Can. Of the $350,000 (Canadian) investment in common shares of Afri-Can, $250,000 (Canadian) was part of Afri-Can’s rights issue announced separately in Stockwatch on May 25, 2005, and $100,000 (Canadian) was part of Afri-Can’s common share private placement announced in Stockwatch on May 25, 2005. Ownership of the Haib project will be 60 per cent by CRC, 25 per cent by Deep South and 15 per cent by Afri-Can. By incurring further expenditures of $1-million (U.S.), CRC can acquire an additional 10 per cent in the Haib project, for a total ownership of 70 per cent, leaving Deep South with 20 per cent and Afri-Can with 10 per cent. At that point, Deep South and Afri-Can would have the option of contributing their share of the development cost and maintaining their ownership positions or, in the case of Deep South, being diluted to a 10-per-cent non-contributing interest in consideration of 75,000 common shares of CRC, and in the case of Afri-Can, exchanging its residual ownership for 75,000 common shares of CRC. CRC could then earn up to a 90-per-cent interest in the Haib project.
Pierre Leveille, president and chief executive officer of Afri-Can, stated: “We are pleased with this agreement as it is a sound financial transaction and it brings a partner with expertise in developing copper projects. It enables Afri-Can to focus on our marine diamond activities and we are currently negotiating with contractors in order to resume sampling programs.”
Copper Resources is the holding company for a group of mineral exploration and development companies with rights to the Hinoba-an porphyry copper project located on Negros Island in Philippines, approximately 700 kilometres south of Manila. CRC raised funds through its recently completed initial public offering on the London AIM exchange and has a cash position of approximately $16.75-million (U.S.). CRC is therefore well positioned to undertake work on the Haib project.
The Haib project is an exclusive prospecting licence (EPL No. 3140) covering 74,563 hectares and is located in the Karas region, eight kilometres from the Orange River in the south of Namibia. The project contains a large porphyry copper-molybdenum deposit hosted within quartz-feldspar porphyry.
