KazMinco, BHP sign agreement for Agadyr licence in Kazakstan

Kazakhstan Minerals (KMC.U.-T) and a subsidiary of Broken Hill Proprietary (BHP-N) have concluded terms granting the latter an option to explore the Agadyr licence in central Kazakstan.

The licence, which spans 10,000 sq. km, was granted to JSC Agadyr, a 67%-owned subsidiary of Kazakhstan Minerals (KazMinco) in September 1996 and has a 25-year term.

BHP World Exploration and JSC Agadyr plan to form a joint venture to develop mining projects on the licence.

Under the agreement, BHP can acquire a 51% interest by spending at least US$1.75 million on exploration by May 31, 2002, and paying US$800,000 in cash to JSC Agadyr.

On completion of a feasibility study, BHP will be deemed to have earned an 80% interest in the project. To maintain its 20% interest, JSC Agadyr is required to reimburse BHP 20% of the costs of the feasibility study.

Alternatively, JSC can reduce its interest to a 3% net smelter return royalty.

KazMinco has held 67% of JSC Agadyr since October 1996 and has identified several priority copper and gold porphyry targets on the licence.