Changara Project Summary
The Changara Project comprises four contiguous exploration licences covering an area of 525km² located approximately 100km southwest of the Provincial capital of Tete and flanking Zimbabwe’s north-eastern border. The national power grid passes within 15km of the project’s eastern boundary.
The licences are underlain by lower Proterozic rocks of the Rushinga Group which flank the north-eastern margin of the Zimbabwe Craton. Although the area has experienced limited historical exploration, it is considered highly prospective for SedEx / Broken Hill Type (BHT) polymetallic base and precious metal and manganese mineralisation and hosts numerous occurrences of zinc, lead, manganese, iron ore, fluorite, copper and silver.
Baobab has completed an extensive soil geochemistry survey covering an area of c.455km² across all four of the Changara exploration licences (representing approximately 87% of the total project area). The samples were analysed using a hand held XRF unit, the results of which identified a series of multi-element targets coincident with prospective geological settings. Follow-up assessment of the highest ranked manganese targets has returned promising rock chip results of up to 36.4% Mn.
Joint Venture with Metals of Africa
Metals of Africa (‘MTA’) successfully listed on the ASX during October 2012, raising AU$3m. Through its wholly owned Mozambique subsidiary, Afriminas Minerais Limitada (‘Afriminas’), the company holds eight exploration licences, known collectively as the Rio Mazoe Project, which are contiguous with Baobab’s Changara Project. The company has a strong technical management team resident in Mozambique and has commenced a 4,500m drilling programme assessing two high priority lead/zinc/silver targets within the Rio Mazoe Project.
In November 2012, Afriminas entered into an unincorporated Joint Venture Agreement with Capitol Resources Limitada (‘Capitol’), Baobab’s wholly owned Mozambique subsidiary, to earn an interest in the Company’s Changara Project.
The Joint Venture Agreement outlines a three-stage investment to earn an increasing participatory interest in the Project:
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Stage 1 – Afriminas commits to funding a 1st Work Programme at a cost of not less that US$150,000. Afriminas’s participatory interest in the Project upon the completion of Stage 1 will be 25%.
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Stage 2 – Subject to having completed the 1st Work Programme satisfactorily, Afriminas shall have the exclusive right to undertake and fund a 2nd Work Programme at a cost of US$600,000. Afriminas’s participatory interest in the Project upon the completion of Stage 2 will be 55%.
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Stage 3 – Subject to having completed the 2nd Work Programme satisfactorily, Afriminas shall have (under the mutual agreement of both Parties) the exclusive right to undertake and fund a 3rd Work Programme at a cost of US$1.2m. Against Afriminas having completed the 3rd Work Programme, its participatory interest in the Project shall increase to 80%.
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Capitol has the option to co-fund the 3rd Work Programme on a pro-rata basis to retain its 45% interest in the Project.
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Afriminas has been nominated as the operator of the Joint Venture, reporting to a management committee represented by both Parties.
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Afriminas may withdraw from the JVA at any time:
• Prior to completion of 1st Program retains no equity interest and is required to pay
out any committed expenditure shortfall
• Post completion of 1st Program retains 25% equity interest.
• Post completion of 2nd Program retains 55% equity interest.
|
Activity |
Spend (US$) |
Completion date |
Earn in % |
|
1st Work Programme |
150,000 |
Aug 2013 |
25% |
|
2nd Work Programme |
600,000 |
Nov 2014 |
55% |
|
3rd Work Programme |
660,000 - 1,2000,000 |
Aug 2016 |
55 - 80% |
