Cape Lambert has agreed to all terms to form a 50/50 joint venture (JV) with Paragon Mining to develop advanced and near-term cobalt and copper projects in the Democratic Republic of Congo (DRC).
The JV agreement includes the Kipushi Cobalt Copper Tailings Project, the Kasombo Copper-Cobalt Projects and the Kipushi Processing Plant.
Kipushi Cobalt Copper Tailings Project, the Kasombo Copper-Cobalt Projects are in the Katanga Copper Belt, which hosts a high-grade copper and cobalt mines.
Kipushi Processing Plant was constructed with an investment of around $20m. It is a conventional flotation plant with a throughput of 150t per hour and annual throughput of more the one million tonnes.
The Kipushi Cobalt Copper Tailings Project is located 8km from the Kipushi Processing Plant.
Many samples derived from the Kipushi tailings were put through metallurgical testwork in South Africa at Mintek. Testwork confirmed the historical grades and records, with additional works being performed to determine the final concentrate specifications and to assess the process plant optimisation work required.
The Kipushi tailings extend for more than 1.2km in length and over 400m in width.
Cape Lambert executive chairman Tony Sage said: “The joint venture agreement with Paragon is a major milestone for the company and follows a period of extensive legal and technical due diligence in the DRC by our consultants and management team.
“The joint venture sets a clear path for Cape Lambert to now re position itself as a cobalt concentrate producer at a time when cobalt continues to benefit from significant growth in demand and substantial price increases.
“We believe that this joint venture and our involvement in these advanced cobalt projects will provide significant value to the company, its shareholders and all stakeholders.”
Tailings from Kipushi and hard rock material from Kasombo will be processed through the Kipushi Processing Plant.
The JV company will operate the Kipushi Processing Plant and mining equipment to process product from all projects.
As well as providing all requisite technical expertise to the JV company needed for the exploration and mining activities at Kipushi project, Cape Lambert will also fund 100% of the working capital and capital costs to begin mining.
In addition, Cape Lambert will be responsible for funding 100% of any costs required to upgrade the Kipushi Processing Plant to effectively process the tailings from Kipushi.
Cape Lambert will fund all costs to complete the exploration and feasibility study and required upgrades for Kipushi Processing Plant to process the ore from Kasombo.
Cape Lambert will also provide all technical resources to the JV company needed for exploration and mining activities. In addition, Cape Lambert will secure funds on behalf of the JV to start mining and upgrade the Kipushi Processing Plant and also conclude any joint venture obligations with Gécamines.
The company will advance $7.5m as equity into the JV with the balance advanced as shareholder loans that are to be repaid from cashflow.