- Potential for near-term cash flow
- Right of first refusal on central area, including the
existing mine
- Option to earn up to 80% of non-explored claims
AMSTERDAM, The Netherlands,
Dec. 19, 2016 /CNW/ - Meridian Mining
S.E. (TSX V: MNO) ("Meridian " or the "Company"), today announced
that, through its wholly-owned subsidiary Brasil Manganês
Corporation Mineração S.A. ("BMC"), it has entered into a
definitive Investment Agreement (the "Agreement") with Cooperativa
de Garimperiros de Santa Cruz Ltda. ("Coopersanta") and Cooperativa
Metalúrgica de RondôniaLtda. ("Coopermetal") (together the
"Cooperatives"), whereby BMC can earn an interest in up to three
components of the Cooperatives operation. Pursuant to the
Agreement, and as discussed in further detail below, BMC has the
right to provide tailings reprocessing services on certain tailings
to the Cooperatives; has a right of first refusal on either the
acquisition of the mineral rights or the provision of underground
mining services in the central area; and can earn 80% of the
non-explored area surrounding the mines.
The Bom Futuro mine has produced more than 192,000 tonnes of tin
since its discovery in 1987, and is the largest producing tin mine
in the Ariquemes district. The Ariquemes District, located in
Rondônia, NW Brazil has produced
approximately 3% of the world's tin supply over the past 30
years.
"Similar to our manganese project, this option offers us both
potential near-term cash flow through the re-processing of tailings
from an existing tin mining operation, as well as longer-term
exploration upside, consistent with our overall strategy for the
Company," said Mr. Anthony Julien,
President and CEO of Meridian. "Entering into this agreement will
allow us to leverage our extensive experience in Rondônia and apply
the latest exploration and production techniques in this
underexplored, but prolific, tin region of Brazil."
Under the terms of the Agreement, BMC has the right to explore a
492.57ha Tailings Reprocessable Area (the "Tailings Area"), a
2,000ha Central Area, which includes the existing Bom Futuro mine,
and an 18,000ha Non-Explored Area (together the "Total Area").
BMC has until March 15, 2017 to
complete a preliminary technical audit of the Tailings Area and, if
it so chooses, a review and exploration on the Central Area and the
Non-Explored Area, with the goal of assessing the technical and
economic viability of the project to determine if it wishes to
exercise its option under the Agreement. During the same period,
the Cooperatives will conduct negotiations and obtain the necessary
approvals for BMC to take over construction of a power transmission
line and hold a Special General Meeting to approve, among other
items, a Tailings Reprocessing Permit and the Exploration Permit
over the Total Area.
Upon completion of a successful preliminary technical audit and
due diligence period, and at the election by BMC to proceed, the
activities as contemplated by the Agreement will commence. At this
time the Cooperatives will grant BMC a Tailings Reprocessing Permit
for the Tailings Area for a term of five years, which can be
extended for a further 5 years, provided BMC completes USD$1.5 million in exploration work on the area.
In compensation for the tailings reprocessing services, BMC will
receive cassiterite concentrate pricing less a 20% treatment charge
and a 3% royalty payable to the Cooperatives.
BMC also has the right to explore the Central Area and will
receive a right of first refusal on the provision of underground
mining services to the Cooperatives or on the rights to acquire the
area.
BMC is required to spend USD$10.5
million on exploration on the Non-Explored Area over five
years. Upon completion of the exploration expenditures and a NI
43-101 or Joint Ore Reserves Committee Code compliant feasibility
study showing economic potential, the Cooperatives will assign and
transfer the rights of the Non-Explored Area to a special purpose
company ("SPC"). The SPC will be set up by BMC and Coopermetal for
the mineral and commercial exploration of this area, in which BMC
will hold 80% interest and Coopermetal 20%. In the event BMC does
not identify a NI 43-101 or Joint Ore Reserves Committee Code
compliant feasibility study showing economic potential, the
Cooperatives will also grant BMC a second exploration term of five
years provided BMC invested USD$10.5
million in exploration work on the Non-Explored Area.
Upon completion of a successful preliminary technical audit and
due diligence and at the election of BMC to proceed, the Company is
required to finance the completion of the under construction 69kV
power transmission line between Bom Futuro and Ariquemes. Subject
to the renegotiation of some of the terms in the signed contract
between Coopermetal and Centrais Eléctricas de Rondônia S/A – CERON
(Electrobrás) ("CERON"), the decision is expected to occur on or
before March 15, 2017. At this time,
BMC will become eligible for reimbursement for the work performed
on the completion of the power transmission line (the cost of which
will be estimated during the technical audit and due diligence
period) in cash, in up to six instalments following completion.
Should reimbursement from CERON not be made in cash, BMC will be
reimbursed by offsetting bills for consumed energy over a period of
not more than 36 months.
QUALIFIED PERSON
The technical information about the Company's activities has
been prepared under the supervision of and verified by Dr.
Adrian McArthur (B.Sc. Hons, PhD.
FAusIMM), a consultant to Brazil Manganese Corporation, who is a
"qualified person" within the meaning of National Instrument
43-101.
On behalf of the Board of Directors of
Meridian Mining S.E.
"Anthony Julien"
Anthony Julien
President, CEO and Director
ABOUT MERIDIAN
Meridian Mining S.E. is focused on the acquisition, exploration,
development and mining activities in Brazil. The Company is currently focused on
exploring and developing the BMC manganese project, the Bom Futuro
tin JV area, and adjacent areas in the state of Rondônia. The
Company employs a two-pronged strategy with the objective of
growing pilot production while advancing a parallel multi-commodity
regional exploration program. Meridian is currently producing high
grade manganese at the BMC project located near, Espigão de
Oeste.
Further information can be found at www.meridianmining.co and
http://bmcorporation.com.br/.
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking
information or forward-looking statements for the purposes of
applicable securities laws. These statements include, among others,
statements with respect to the Company's plans for exploration and
development of its properties and potential mineralization. These
statements address future events and conditions and, as such,
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the statements. Such risk
factors include, among others, failure to obtain regulatory
approvals, failure to complete anticipated transactions, the timing
and success of future exploration and development activities,
exploration and development risks, title matters, inability to
obtain any required third party consents, operating hazards, metal
prices, political and economic factors, competitive factors,
general economic conditions, relationships with strategic partners,
governmental regulation and supervision, seasonality, technological
change, industry practices and one-time events. In making the
forward-looking statements, the Company has applied several
material assumptions including, but not limited to, the assumptions
that: (1) the proposed exploration and development of mineral
projects will proceed as planned; (2) market fundamentals will
result in sustained metals and minerals prices and (3) any
additional financing needed will be available on reasonable terms.
The Company expressly disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise except as otherwise
required by applicable securities legislation.
The Company cautions that it has not completed any feasibility
studies on any of its mineral properties, and no mineral reserve
estimate has been established. In particular, because the Company's
production decision relating to BMC's manganese project is not
based upon a feasibility study of mineral reserves, the economic
and technical viability of the BMC manganese project has not been
established.
The TSX Venture Exchange has in no way passed upon the merits of
the proposed Arrangement and has neither approved nor disapproved
the contents of this news release. Neither TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Meridian Mining S.E.