Australian firm acquires stakes in Oman copper blocks

 

Savannah, however, retains exposure to the projects’ economic success, said a statement.

 

The divestment, once formalised and approved by regulatory authorities, will result in the acquisition by Force Commodities of Savannah’s rights to Blocks 4 and 5 covering an area of over 1,000 sq km spanning the copper-rich Semail Ophiolite region.

 

The belt is known to host clusters of moderate to high-grade copper deposits associated with gold and other metallurgical ores, according to experts, said an Oman Daily Observer report.

 

Prior to its divestment Savannah held a 65 per cent interest in Block 5 via its shareholding in Al Fairuz Mining, and a 51 per cent stake in Block 4 via its shareholding in Al Thuraya Mining. Located within easy access of the Port of Sohar, Block 5 has a current Indicated and Inferred Mineral Resource of 1.7 metric tonnes (Mt) at 2.2 per cent copper (Cu), split between the Mahab 4 deposit (1.51Mt at a grade of 2.1 per cent Cu) and the Maqail South deposit (0.16Mt at a grade of 3.8 per cent copper).

 

The Mahab 4 deposit also includes a high-grade zone of 0.5Mt at 4.5 per cent Cu. Mining licences for the development of the blocks are still awaited from the Ministry of Energy and Minerals.

 

The transaction highlights are:

 

• Consideration and other payments (subject to settlement):

 

- 50,000,000 new ordinary shares to be issued by Force (deemed issue price of 1 cent per Force share)

 

- Preferential payment of AUD$3,500,000 of an existing loan from cash flow from production

 

- Payment of a 1.0% net smelter royalty on future metal sales

 

Settlement of the transaction is subject to certain conditions being achieved or waived, and is expected to be completed in October 2020.

 

David Archer, Savannah’s CEO, commented: “With the company’s focus moving to the further development and subsequent commercialisation of the Mina do Barroso Lithium project in Portugal, which continues to increase in significance from a European battery value chain perspective, an opportunity has arisen to divest our Omani Copper Projects to Australian listed company Force Commodities. The divestment allows us to retain exposure to the upside of the Projects through the shareholding in Force, together with a loan and royalty payable when the Projects go into production.

 

“Force has recently restructured its Board and we are very excited by this opportunity to work with the impressive team that Chairman Jess Oram has established and which sees the CEO role filled by mining industry expert Simon Pooley, who brings over 30 years of broad international experience encompassing roles in corporate, mine development, operations, and exploration areas. We look forward to seeing the projects developed to their full potential under the stewardship of Force.”

 

Simon Pooley, Force’s CEO, commented: “The acquisition of the projects is a major milestone in cementing Force’s position as a multi-commodity exploration and development company and represents the first step in our strategy of establishing the company as a copper producer. The Transaction provides Force with exposure to one of the most prospective Ophiolite belts in the world.”

 

“We believe that with the application of systematic exploration and further commercial transactions, the opportunity exists in Oman to become a significant mid-tier copper producer.” - TradeArabia News Service