MUSCAT -- Australian mining firm Alara Resources Limited has announced that it has secured rights to acquire up to a 70 per cent interest in the Daris Copper Project near Sohar. The investment is the latest in a number of base metals project opportunities Alara is currently pursuing in several countries. The project currently comprises a licence to explore and develop potential copper ores on a roughly 58,728-hectare concession located in the Samayil Ophiolite belt which extends over 800km.
According to Alara, the concession owner, Al Tamman Trading Establishment LLC (ATTE), is also seeking to renew the licence with mineral rights expanded from copper to include gold, silver and other base metals. The Samayil Ophiolite belt provides a prospective setting for Cyprus-type VMS copper gold deposits. In the past, the government-owned Oman Mining Company has produced, mined and treated 14 million tonnes of copper resource at between 1-2 per cent copper from open cut mines at their Lasail, Arja and Baida mines.
More recently, a privately owned Omani company has located a large resource of copper nearby within 50km from the project area. Alara believes that the project area has the potential to host substantial copper mineralisation. During the course of its due diligence, the Company identified a number of potential targets in addition to those previously drilled in the project area on a reconnaissance basis by the government or consultants on its behalf. Drilling to date has identified the possibility of high grade oxide and sulphide mineralisation at shallow depths.
Alara plans to pursue a twofold strategy in the project area: (1) To develop high grade oxide resources that may be amenable to heap leaching; and (2) To explore shallow and deeper sulphide mineralisation using modern geophysical techniques. The proximity to the capital city, a paved highway and modern copper extraction facilities nearby in Sohar should assist in the development of early cash flow from any discoveries made in the project area, Alara said.
An initial 25-hole diamond and percussion drilling programme using two drill rigs has commenced on targets identified by Alara. The drilling campaign is focused on two prospects within the concession to define a shallow oxide resource as well as a shallow high grade sulphide mineralisation, with a view to development as well as understanding and building an exploration model for the area. Under a Shareholders' Agreement entered into between Alara and the concession holder, Al Tamman Trading Establishment LLC, Alara will invest up to a total of $7 million into a new joint venture company, Daris Resources LLC, to gain up to a 70 per cent shareholding.
Alara will have 50 per cent of the JV on incorporation (with the concession owner holding 50 per cent) and will advance $3 million as equity during a 3-year period. Thereafter, Alara will advance a further $4 million to the JV as a loan convertible into equity in the JV to take Alara's interest to 70 per cent. Daris Resources LLC will have exclusive rights under a management agreement with the Concession owner to manage, operate and commercially exploit the Concession.
Significantly, Alara is also forming a new joint venture company, Alara Resources LLC (AlaraCo) with Sur United International Co LLC, to identify, secure and commercially exploit other resource projects in Oman. Under the terms of a shareholders' agreement between Alara and Sur United, Alara will contribute 100 per cent of the initial capital of RO 150,000 for a 70 per cent shareholding interest in AlaraCo with Sur United holding the balance of 30 per cent. Thereafter, Alara will advance funds to AlaraCo as a loan, the Perth-based company stated.
By Staff Reporter
© Oman Daily Observer 2010
