THE BOURSE WHISPERER: Bannon Limited (ASX:BNX) has signed a binding Heads of Agreement with African Mining Capital (AMC) to enter into a joint venture to earn and acquire 76 per cent of the Kaoko project, located in Namibia.
The Kaoko project comprises six exploration licences covering a total of 3722 square kilometres.
The project has already displayed high-grade mineralisation, with grab samples returning:
– 34.5 per cent copper and 97 grams per tonne silver;
– 17.7 per cent copper, 0.5g/t gold and 3.5g/t silver;
– 17.7 per cent lead, 7.6 per cent zinc and 137g/t silver; and
– 64.2 per cent lead and 410g/t silver.
Identified targets at Kaoko project and surrounding infrastructure. Source: Company announcement
“The Kaoko project is an exciting opportunity for Bannon to acquire a highly prospective, base metals project in a favourable jurisdiction,” Bannon Limited chairman Philip Werrett said in the company’s announcement to the Australian Securities Exchange.
“The company has negotiated an exploration based agreement which will assist Bannon in driving shareholder value.
“The Kaoko project is under-explored with soil anomalies and target areas already identified.
“The project comes with a team who has extensive in-country experience and a history of identifying discoveries in Namibia.”
The agreement has been reached on the following commercial terms:
1. $50,000 non-refundable deposit payable to AMC;
2. After shareholder approval the company will subscribe for $200,000 in shares of AMC, the deposit will count towards this;
3. Stage 1: Earn 30 per cent (28 per cent of the project) of AMC’s subsidiary for $1.5 million in exploration funds;
4. Stage 2: Bannon has the right to increase its share of AMC subsidiary to 80 per cent (76 per cent of the project) for 11 million Bannon shares and 10.5 million options (exercisable at 25c and expiring in August 2015);
5. Transaction is conditional on shareholder approval; and
6. The company will continue with the proposed exploration activities contemplated on its Western Australian projects as specified in its IPO prospectus, there has been no change to anticipated exploration expenditure ($1.3 million). The company believes that the Kaoko project is complimentary to its existing Western Australian projects and will fund the activities on the Kaoko project from money set aside for new project review and general working capital as specified in the IPO Prospectus and from future capital raisings.
Bannon said it considers the Kaoko project to be prospective for copper and other base metals and represents an opportunity for the company to explore a highly prospective, emerging copper and base metals province.