Celsius Resources will sell its copper-cobalt project at Opuwo to a Chinese mining company for N$250 million.
Australian-listed Celsius announced the sale of the Opuwo project in the Kunene region to Chinalco (Xiong’an) Mining yesterday.
“Celsius is delighted to have concluded an agreement with an entity of Chinalco (Xiong’an) Mining’s international standing and reputation. We believe that Chinalco (Xiong’an) Mining is well positioned to progress the Opuwo project, which will deliver substantial benefits to Namibia and the local community,” Celsius managing director Bardin Davis said.
According to Celsius, the Opuwo project has the largest deposit of cobalt outside of the Democratic Republic of Congo. It is believed to have 259 000 tonnes of cobalt and 970 000 tonnes of copper.
The project has not been profitable for Celsius. Last year, the company wrote down the value of the project by approximately N$75 million and announced its intention to sell the project in order to refocus on its operations in the Philippines.
Celsius owns 95% of the project and will sell those shares to Chinalco, along with an intercompany loan for a total of US$15 million (about N$248.7 million).
“As a demonstration of its commitment to the transaction and the Opuwo project and in support of exclusive prospecting licence (EPL) and environmental clearance certificate renewal applications, Chinalco (Xiong’an) Mining has agreed to provide a non-refundable exploration commitment of a minimum of US$750 000 [about N$12.3 million] on exploration and US$250 000 [about N$4 million] on metallurgical test work, while conditions precedents are being satisfied (with the results to be provided to Celsius and to support the EPL renewal),” Celsius said.
Chinalco (Xiong’an) Mining is a subsidiary of Chinalco, focusing on mining base metals. The Aluminum Corporation of China (Chinalco) is a state-owned enterprise and is the world’s biggest producer of aluminium.
“Opuwo is a significant greenfield cobalt-copper asset located in Namibia, demonstrating substantial exploration and development potential.
We highly commend the efforts of Celsius Resources in advancing the Opuwo project and look forward to collaborating with all stakeholders to responsibly progress the project from exploration through to development,” Chinalco Xiong’an says.
The agreement is subject to shareholder approvals, approval from the Namibian government and an extension of the current EPL. The two parties have six months to finalise the sale.
