Australia-based Blackthorn Resources has entered into a non-binding conditional agreement with Glencore Xstrata to sell its remaining 27.3% stake in the Perkoa project in Burkina Faso, West Africa.
The agreement also includes the sale of the Northern Tenement exploration licences, consisting of the Poa, Guido, Seboun and Sepaogo licences adjacent to the Perkoa project.
Perkoa zinc mine is located at Sanguie, 120km away from Burkina Faso's capital city Ouagadougo, and is said to be the first large-scale base metal mine in the country.
The mine is being developed by a joint venture of Glencore Xstrata, Blackthorn Resources and the Burkina Faso Government.
Glencore Xstrata holds a 62.7% share in the project, while 27.3% is held by Blackthorn Resources and the remaining 10% by the Burkina Faso Government.
Blackthorn Resources believes that the deal with Glencore Xstrata represents fair value for its equity in the Perkoa joint venture.
The resource company will now focus on the development of its core asset, the Kitumba copper project, in Zambia.
Said to be in principle with Glencore Xstrata, the agreement follows Blackthorn Resources' recently completed due diligence review of the Perkoa business plan, and includes consideration of the impact of project debt in addition to appropriate consideration of potential zinc pricing trends over the remaining mine life.
Blackthorn Resources CEO Mark Mitchell said: "Our immediate focus remains on progressing the development of the Kitumba copper project in Zambia, which will continue with the benefit of the additional funds provided by the Perkoa settlement. Also, beyond Kitumba, we now have the means to consider new opportunities."
As consideration for the sale, Blackthorn will receive up to $12m cash, $10m for Perkoa and up to $2m for the exploration tenements.
Image: The Perkoa zinc mine has reserves of 6.2 million tonnes. Photo: courtesy of Blackthorn Resources.