African Metals Corporation Enters Into a Letter of Intent to Purchase Up to a Further 33% Interest in the Luisha Project
June 21 2010 - 8:30AM
Marketwired
African Metals Corporation (the "Company") (TSX VENTURE:
AFR)(FRANKFURT: OWW) is pleased to announce that the Company has
entered into a letter of intent (the "LOI") with TSM Enterprise
s.p.r.l. ("TSM") to acquire up to a further 33% interest in Luisha
Mining Enterprise s.p.r.l. ("LME") and the Luisha Project located
in the Democratic Republic of Congo ("DRC"). The Company completed
its acquisition of its wholly owned subsidiary Chevalier Resources
Inc. ("Chevalier") in March, 2010 thereby obtaining a 57% interest
in LME and the Luisha Project owned by Chevalier.
Initially, the Company through Chevalier will purchase an
additional 18% interest in LME and the Luisha Project in
consideration for the issuance of common shares in the capital of
the Company ("Shares") having an aggregate value of $1,500,000 to
TSM. The number of Shares to be issued will be calculated using the
volume weighted average price of the Shares on the two trading days
immediately before and the two trading days immediately after the
date of this announcement. Upon completion of this initial share
purchase, the Company, through Chevalier, will have a 75% interest
in LME and the Luisha Project. This transaction is subject to the
approval of the TSX Venture Exchange.
Upon completion of the initial share purchase, Mr. Simeon
Tshisingama, as nominee of TSM, will become a director of the
Company and of LME.
The LOI also provides that the Company shall have the exclusive
option (the "Option") to acquire an additional 15% interest in LME
and the Luisha Project. The Option is exercisable upon the date it
is announced by the Company that the Luisha Project has a defined
Indicated Mineral Resource of 50,000 tonnes of contained copper
metal and 5,000 tonnes of contained cobalt metal. The Company may
exercise its Option and acquire the additional 15% interest in LME
and the Luisha Project in consideration for the issuance of Shares
having an aggregate value of $1,000,000 at the time the Option is
exercised and by making a cash payment of $200,000 to TSM. The
exercise by the Company of the Option will be subject to the
approval of the TSX Venture Exchange. If the Option is exercised,
the Company, through Chevalier, will have a 90% interest in LME and
the Luisha Project.
In conjunction with the exercise of Option, the Company will
undertake to make milestone payments to TSM as follows: (i) upon a
defined Indicated Mineral Resource of 100,000 tonnes of contained
copper metals and 10,000 tonnes of contained cobalt metal on the
Luisha Project, the Company will issue Shares having an aggregate
value of $2,000,000 and make a cash payment of $500,000; (ii) upon
a defined Indicated Mineral Resource of 150,000 tonnes of contained
copper metals and 15,000 tonnes of contained cobalt metal on the
Luisha Project, the Company will issue Shares having an aggregate
value of $1,000,000 and make a cash payment of $250,000; and (iii)
upon a defined Indicated Mineral Resource of 200,000 tonnes of
contained copper metals and 20,000 tonnes of contained cobalt metal
on the Luisha Project, the Company will issue Shares having an
aggregate value of $1,000,000 and make a cash payment of
$250,000.
Apart from regulatory approval, these transactions will also be
subject to certain conditions including the execution of a
definitive agreement to replace the LOI.
Nigel Ferguson, President and CEO of the Company commented, "We
are very pleased to have secured the extra equity percentage in
this exciting project. Recent results from the project have
indicated excellent copper and cobalt grades exist within the
project's historical open pit at Luisha South. The extra equity
will afford shareholders significant additional exposure to the
upside potential of the project. In addition we have secured the
services of our joint venture partner, Mr. Simeon Tshisangama,
whose wealth of operational experience and contact base in the
Democratic Republic of Congo will be invaluable to the success of
the Company in delineating significant resources and bringing those
resources to fruition."
The Luisha Project is located 75 kilometres northwest of
Lubumbashi, the capital of Katanga Province and consists of
approximately 16.2km(2). It includes a small historical open pit
mine and associated waste rock pile and is underlain by Roan Group
sediments which host major Cu-Co deposits in the Central African
Copper Belt of Zambia and the DRC. The Luisha South ore body was
explored by geophysical methods, drilling and some shafts and
tunnels between 1923 and 1928 and an oxide deposit with an
estimated pre-production tonnage of approximately 350,000 tonnes at
8.6% Cu was delineated (refer NI43-101 compliant Technical Report
on the Luisha Copper-Cobalt Project by Strathcona Mineral Services
Limited) The Luisha Project also covers some three kilometres of
the Roan Group strike length which is favorable for hosting Cu-Co
mineralization.
ON BEHALF OF THE BOARD OF DIRECTORS OF AFRICAN METALS
CORPORATION
Nigel Ferguson, President & CEO
This News Release contains forward-looking statements.
Forward-looking statements are statements which relate to future
events. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors that may cause our
or our industry's actual results, levels of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. While these
forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment
regarding the direction of our industry, actual results will almost
always vary, sometimes materially, from any estimates, predictions,
projections, assumptions or other future performance suggested
herein. Except as required by applicable law, the Company does not
intend to update any of the forward-looking statements to conform
these statements to actual results.
Neither the 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 news release.
Contacts: African Metals Corporation Sheryl Jones CFO
604-507-2181 604-507-2187 (FAX) info@africanmetals.com
www.africanmetals.com
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