ASX-listed minerals company Regal Resources has entered into an unconditional agreement with a joint venture partner, Democratic Republic of Congo- (DRC-) registered La Generale Industrielle et Commerciale au Congo (GICC), to acquire additional shares in the Kalongwe copper project’s holding company, Kalongwe Mining, for $3-million in cash.
This acquisition, announced in October, will be funded by a convertible loan agreement with private-equity investment firm Tembo Capital Mining Fund, under which Tembo will advance a $3-million loan to Regal.
According to the October announcement, the completion of the acquisition was expected to occur on or about November 2. Following completion of the acquisition, Regal will have an 85% share in the Kalongwe copper project, GICC will have 10% and the DRC government, 5%.
Regal CEO Mark Arnesen noted that the increase in Regal’s shareholding in the Kalongwe project, as well as the appointment of Adam Smits as a key member of the new management team, would go a long way towards ensuring the continued success of the Kalongwe venture.
“It was important to be able to execute the share purchase agreement in a short timeframe and without any conditionality and the Tembo facility allowed us to achieve this,” he states, adding that Tembo has given Regal’s new management considerable support by providing the financing to enable them to complete the transaction.
Further, Arnesen commends Tembo for also providing the market with the opportunity to recognise the significance of these two events before raising additional equity.
“With these key developments, over the coming months, the management team will be able to focus on the completion of the definitive feasibility study (DFS) and an accelerated exploration programme on the Ivanhoe joint venture.”
Arnesen stated that Smits had been appointed COO and executive director effective November 14 and is expected to provide the board with technical input, while leading the development of the company’s flagship Kalongwe copper- cobalt project.
Smits is a mechanical engineer with 20-years’ experience across Australia and, having spent the last decade in francophone West Africa, where he has held a variety of project development and operational roles, he recently guided West African-focused miner Perseus Mining’s Sissingue project, in Côte d’Ivoire, to the start of construction.
He has also led the successful DFS of metals company TiZir’s $650-million Grand Côte mineral sands project, in Senegal, through to development.
The Kalongwe copper-cobalt project is Regal’s flagship project. It is in the Lualaba province of the DRC and is located towards the western end of the Copperbelt, less than 15 km from where diversified miner Ivanhoe Mines recently announced its Kakula discovery.
Kalongwe hosts a near-surface resource of 302 000 t of copper and 42 000 t of cobalt predominantly as oxide ore. Regal says it will fast-track work on the Kalongwe DFS to capitalise on the expected increase in copper demand.
The company has invited tenders for technical studies towards the completion of the DFS. Metallurgical testwork is in progress and is being conducted by Australian laboratory Miller Mining Services, which is based in Brisbane.