Benzu Resources JVMukuba Resources Limited signed an Option and Joint Venture Agreement with Benzu Resources Limited to explore and develop a copper and base metals project in the Democratic Republic of the Congo. The Project tenement is situated to the east in a region known as the Katanga Copper Belt and is adjacent to the Tenke-Fungurume mine operated by Freeport McMoRan, Lundin and Gécamines.
The Katanga Copper Belt is estimated to contain nearly 10% of the world's copper and almost 50% of the world's cobalt resources. This belt contains over roughly 90 known deposits that vary in size between approximately 90 Mt and 550 Mt and average around 3.6% Cu. Some of the resources are amongst the largest and highest grade in the world including the resources at Tenke-Fungurume reported to be roughly 550 Mt grading 3.5% Cu and 0.27% Co and resources at Kolwezi (KOV) containing approximately 760 Mt grading 4.4% Cu.
Under the terms of the Agreement, Mukuba can earn up to a 51% interest in a company (the "JV Company") to be formed for the purposes of operating the Joint Venture pursuant to the terms of the Agreement. It is also required that Mukuba spend US$3 million on exploration and maintenance of the project within three years of the effective date of the Agreement and issue one million dollars worth of common shares of Mukuba to Benzu (to be priced based on Mukuba's next financial raise). These shares are subject to a statutory hold period expiring four months and one day following the issuance of the shares. Further development of the Project would be funded by both parties on a pro-rata basis. The JV Company will have a 70% interest in the Project and be the initial operator. Under the terms of the Agreement, the parties are subject to customary restrictions on transfer of their interest in the JV Company, including pre-emptive rights on transfers and other protective provisions. The Board of Directors of the JV Company will consist of four directors, two of whom shall be nominated by each of Mukuba and Benzu.
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