The companies will combine their properties, situated in the Aripuana volcanogenic massive sulphide belt in Mato Grosso state. Ambrex, through its subsidiary Mineracao Rio Aripuana, will contribute 2,000 ha., including the Valley deposit. Anglo American will pitch in its adjacent 9,046-ha property, which hosts the Arex deposit.
The mining titles will be held by a newly formed company called Newco. Anglo, by spending US$250,000, can earn a 70% interest in Newco, with Ambrex holding 30%.
To retain its interest in Newco, Anglo will have to spend US$3.2 million over four years, with the first expenditure of US$250,000 required by June 30, 2000.
After that period, any further cost incurred in producing a positive feasibility study will be covered by Anglo.
Once a positive feasibility study is established, the partners will foot the bill relative to their respective interest levels.
Should Anglo terminate the venture at any time, the properties revert back to their original owners, but Anglo must provide Ambrex with a right-of-first-refusal regarding the Arex deposit for a period of 12 months following the termination.
Should either company decide to transfer its interest to a third party, it must provide the other with a right-of-first-refusal regarding the Newco properties.
At the time of production, Newco is to pay Ambrex US$1 million.
Anglo will not partake in any gold exploration or development on the property originally contributed by Ambrex but will receive a 2% net smelter return royalty on any gold produced, by Ambrex, from Anglo’s original land parcel.
Previous work estimated the resource of the Valley deposit at 11.65 million tonnes averaging 6.29% zinc, 2.25% lead and 0.07% copper, plus 65 grams silver and 0.25 gram gold per tonne. The Arex deposit was estimated to contain a similar resource.
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