Subiaco-based Waratah Gold has signed an agreement allowing the company to acquire an iron ore project in the Republic of Congo from Afriresources.
Subiaco-based Waratah Gold has signed an agreement allowing the company to acquire an iron ore project in the Republic of Congo from Afriresources.
Waratah Gold has agreed to purchase 90 percent of Afriresources, which owns 100 percent of the Youkou iron ore project.
Other projects in the area include Sundance Resources' Nabeba iron deposit, Core Mining's Avima iron ore project and Equatorial Resources' Badondo iron project.
In a statement to the Australian Securities Exchange Waratah said it is a favourable geological province with large scale hematite DSO and magnetite potential.
As part of the acquisition process Waratah announced it is planning a $1.7 million capital raising.
The company already has indicative commitments from sophisticated investors to raise the funds at 15 cents a share.
See company statement below:
Waratah Gold Limited (ASX:WGO) (Waratah) is pleased to announce the signing of an agreement to purchase 90% of Afriresources Congo S.A., which holds 100% of the Youkou Iron Ore Project (Youkou). Youkou is located in an emerging iron ore province in the Republic of Congo (ROC) in Central West Africa.
Youkou is located on the Invindo Massif in the north west of ROC which is host to a number of large scale iron ore projects. Projects in the area include Sundance Resources' Limited (ASX:SDL) (Sundance) Nabeba iron ore deposit; Core Mining's (Core) Avima iron ore project and Equatorial Resources' Limited (ASX:EQX) (Equatorial) Badondo Iron Project. The CEMEC owned Belinga project in Gabon is also only 135 km from Youkou. Other major companies operating in the ROC include Xstrata (Zanaga Iron Ore project) and Cape Lambert Resources Limited/DMC (Mayoko Iron Ore project).
Geological Summary
Youkou is hosted within the Haut Ivindo Massif, the northern equivalent of the granitic Chaillu Massif to the south. Limited recent exploration has been undertaken at Youkou however, based on information compiled by the Geological Survey of South Africa, Waratah is of the opinion that Youkou is prospective for hematite and magnetite rich itabirite iron ore mineralisation.
A historic outcrop of iron ore workings occurs in the license area with recorded hematite and itabirite. An assay grading 69% Fe, 0.08% P2 O5 and 0.5% SiO2 has been returned from a specimen between the years of 1936 and 1939.
A metallogenic map of the project area indicates an iron quartz schist of approximately 20km in strike length. The local geology compares favourably with other nearby projects.
Most projects in West and Central Africa have potential DSO iron ore mineralisation which occurs as a capping derived from supergene enrichment of the underlying upright itabirite protore lithologies. Magnetite rich bands have typical thicknesses of up to 200 metres in the ROC.
The iron quartzite ridge trends in a north north west to south-east striking package of rocks represented by phyllites, quartzites, itabirites, micaceous- quartz schists and magnetite amphibole schists. The Youkou ridge is interpreted to be an antiformal structure plunging southwards.
On completion of technical and legal due diligence, Waratah proposes to prepare an exploration programme based upon a desktop review of any previous data held by Bureau De Recherches Geologique et Minieres "BRGM" in France, the geological survey of South Africa and any other historical reports.
The Republic of the Congo
The Republic of Congo (ROC) is also sometimes referred to as Congo Brazzaville to distinguish it from its neighbour to the east, the Democratic Republic of Congo (DRC). The ROC is a unitary republic and the current government has been in power since 1997.
The ROC enjoys relative political and social stability and has a government which is supportive of mineral development and foreign investment. A number of Australian and other foreign mining and oil companies operate in the ROC.
Infrastructure
Waratah proposes to partner with Solethu Investments (Solethu) as Solethu has played an important role in securing the project for Waratah. Solethu has a Joint Venture with Grindrod Limited in RRL Grindrod developing rail infrastructure on the African Continent. Grindrod Limited is a dynamic organisation with more than 100 years experience in South Africa's freight movement and related industries, providing a world class freight logistics and shipping offering to its clients. Grindrod Limited is listed on the South African Stock Exchange. RRL Grindrod has the capability of manufacturing and leasing of rolling stock, locomotive operations and building railway lines through a partnership with RACEC Limited. Together with Grindrod Limited, RRL Grindrod has the ability to provide a total logistics solution from pit to port for its customers.
RRL Grindrod and Solethu has a long standing relationship with the state railways of the Republic of Congo, the Chemin de Fer Congo-Ocean (CFCO) and are involved in several locomotive initiatives to develop the rail infrastructure of the Republic of Congo. RRL Grindrod has been invited by the Mining ministry to develop the appropriate rail infrastructure to unlock the resources within the country. During the Due Diligence period Waratah will consider
entering into a memorandum of understanding with Solethu and RRL Grindrod to develop the appropriate rail infrastructure for the project in conjunction with its exploration activities.
Commercial Terms
Waratah has agreed to the following consideration to the vendors and consultants in relation to the Youkou acquisition, subject to completion of a 30 day technical and legal due diligence period and subject to the normal shareholder and regulatory approvals
- At settlement Waratah will pay US$1.7m and issue 5,500,000 fully paid shares.
- On the delineation of a 50,000,000 tonne JORC inferred iron ore resource Waratah will issue 4,000,000 fully paid shares.
- On the delineation of a 100,000,000 tonne JORC inferred iron ore resource Waratah will issue 1,000,000 fully paid shares and make a payment of US$200,000.
- On delineation of a 150,000,000 tonne JORC inferred iron ore resource Waratah will issue 9,000,000 fully paid shares.
- A US$3 per tonne royalty on iron ore shipped is also payable.
Full and further details will be provided to shareholders in a notice of meeting to be sent to shareholders in the near future.
Capital Raising
Waratah has an indicative commitment from sophisticated investors to raise AU$1,700,000 at 15 cents to assist with the acquisition of the project. The capital raising will be subject to shareholder approval.
