Perth-based explorer Lindian Resources has announced plans to acquire a majority stake in a bauxite mine in Tanzania in a deal worth nearly $2 million, despite recently introduced legislation mandating increased government ownership of local projects and higher royalties on some minerals.
Lindian will acquire up to a 75 per cent interest in the Lushoto bauxite mine through a farm-in agreement with Batan Australia.
In a statement, Lindian said as the project was not in a production stage, the Tanzanian government’s recently introduced legislation concerning a 16 per cent free-carried interest in the capital of a mining company did not apply.
However, in the event that production is achieved at Lushoto, the 16 per cent free-carried interest would come out of Batan’s stake, leaving it with 9 per cent ownership.
“Lindian notes the background behind the legislative changes and the need for any mining project to be beneficial to all stakeholders involved, be they government, local community and shareholders of companies funding exploration and development,” the company said.
“In the board’s opinion shareholders need to be cognisant of the initial changes made and how they evolve and are interpreted once operational.
“Tanzania is a significant mining and oil and gas jurisdiction with a solid history of successful resource development.”
Lindian director Eddie King said the Lushoto farm-in would greatly enhance the company’s existing activities in Tanzania.
“Looking at the recent upward trends in the high grade bauxite export trade and the excellent infrastructure already in place in – and between – Lushoto and Tanga, we believe the project offers great potential as a direct shipping ore operation once various geological boxes are ticked over the coming few quarters in line with previous historical work completed on the project,” he said.
Mr King, who is also handing over his chairman role to fellow director Asimwe Kabunga today, is also a board member of Axxis Technology, which is currently pursuing a reverse takeover agreement with renewable technology company WindTurbine.
Lindian shares were 14.2 per cent higher to 1.6 cents each at 11:15am.
