Vancouver – Atacama Minerals (AAM-V) is moving to acquire full ownership of the Aguas Blancas iodine mine, located in northern Chile, from its joint-venture operating partner ACF Minera.
The agreement outlined in the letter of intent will see Atacama pay $11.2 million, upon closing, plus an additional $4.5 million within 12-months for the remaining 50% of the operating company that holds the mine and all related assets. Repayment of $4.3 million owed to ACF Minera will also be made on closing.
Aguas Blancas is a major producer of iodine located 100 kilometres from the major Chilean port of Antofagasta in the Atacama Desert. The project also hosts significant deposits of sulphate and nitrate, having the largest sulphate reserves in South America.
Production from mine commenced in 2001, with annual output of over 720 tonnes of high-grade iodine.Planned upgrades at the operation, by Atacama, are aimed at increasing recoveries and bringing a sodium sulphate circuit on-stream.
In 2004, a legal dispute was launched by the company against partner ACF due to breach of contractual obligations. ACF failed to fund and construct a conversion of the processing operation from heap leach to mechanical leaching, designed to increase iodine production to about 1,500 tonnes-per-annum. Atacama Minerals subsequently moved to take control of the operating company board and temporarily ceased mining operations at the project.
The latest proven and probable reserve figures show the deposit hosting over 40 million tonnes grading 512 ppm (0.05%) iodine, 22% sodium sulphate and 2.9% nitrates.
Iodine is extracted through a specialized leach circuit that provides a feed solution to an iodine extraction plant.
Atacama Minerals reports 55.1-million shares outstanding, giving the issuer a market capitalization of $39-million after its share price rallied to the 70 level on the news.
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