Anglo, Karmin ink Aripuana agreement

An agreement signed in mid-February will see properties held by Anglo American (AAUK-N) and Karmin Exploration (KARM-C) in the Aripuana area of Mato Grosso state, Brazil, combined into a single joint venture designed to bring two massive sulphide deposits into production.

Anglo contributes a 90-sq.-km property, including its Arex base metal deposit, discovered in 1994-1995. Karmin brings a 20-sq.-km property that includes its Valley deposit. Under the agreement, Anglo will spend US$3.2 million by the end of June 2003 and will have the option to continue work for another two years at its own expense.

Karmin’s Valley deposit has a resource of 11.6 million tonnes grading 6.29% zinc, 2.25% lead and 0.07% copper, plus 65 grams silver and 0.25 gram gold per tonne. Anglo has not published a resource estimate for its nearby Arex deposit but says it is of comparable size.

Under the terms of the deal, Karmin and minority partners will get US$1 million against future dividends at the time of a production decision. Karmin’s interest in the new venture was 18.9%, but minority partners Thistle Mining (THT-T) and SGV Merchant Bank (a unit of St. Genevieve Resources (SGVE-C), were not participating, and their interests were being diluted.

Anglo, which is interested in the potential base metal production from the properties, keeps a 2% net smelter return royalty on any gold production from its land package; Karmin and its minority partners keep the whole interest in gold production from their property.

The Brazilian subsidiary of Noranda (NOR-T) held an option on the property but dropped it in April 1998.