AMF options Kipushi to Zincor

Jean-Raymond Boulle’s America Mineral Fields (AMZ-T) has signed an option agreement with Zincor, a subsidiary of South Africa’s Iscor, to redevelop the dormant, high-grade Kipushi zinc-copper mine in the Democratic Republic of Congo (DRC).

The Kipushi mine operated from 1925 until 1993. Resources stand at an impressive 26 million tonnes grading 19% zinc and 2% copper.

Although Kipushi’s mining licence and assets are held by the DRC’s state-owned mining company, Gcamines, AMF was awarded a first right-of-refusal to evaluate and rehabilitate the mine in 1996. Two years later, that agreement was extended.

Under its new option agreement with AMF, Zincor must pay AMF US$100,000 and may undertake due diligence over a 120-day option period. At the end of the option period, Zincor can choose to earn up to a 50% interest in a joint-venture company, with AMF holding the balance, by matching AMF’s direct expenditures on the project to date.

AMF and Zincor may then negotiate a formal agreement with Gcamines to cover issues of structure, project finance, equity ownership and dividend distributions. AMF says the option agreement with Zincor has already received the approval of Gcamines and regulators.

Zincor is the largest producer of refined zinc in Africa, with a 115,000-tonne-per-year electrolytic zinc plant near Johannesburg. The company is also a major producer of high-purity sulphuric acid.

Meanwhile, AMF has optioned its Chapada alluvial diamond project, in Brazil’s Mato Grosso state, to Chapada Minerals. The latter can acquire the project over the next year for US$1 million.