Shaw River Resources has announced that tit is set to become a significant manganese producer with the acquisition of a 75.5% interest in the Otjozondu Manganese Project in Namibia.
The deal comprises a combination of shares, cash and options, and builds on Shaw’s Pilbara and Ghana manganese project portfolio. The company aims to double production within five years. An exploration target of 35 million tonnes to 50 million tonnes at 23% manganese to 27% Mn at Otjo has been estimated by the company.
Based primarily on existing diamond drilling and reverse circulation drilling at the Otjo project, the company expects to report a maiden JORC Inferred Resource estimate from Otjo in the first half of 2011. With only a 24% portion of the 44 kilometers mineralized strike length drill tested so far identifying seven deposits, significant exploration upside exists along strike and at depth.
Included in the acquisition are 5 granted EPL's, 1 granted Mining Lease over 1,367 square kilometers and a plant capable of producing up to 10,000 tonnes per month of 36% to 42% manganese product from run of mine material.
A big positive for the project is the extensive road, rail and port infrastructure elements available for Otjo, including the bulk commodity port facilities at Walvis Bay, which are controlled by the Otjo project's 24.5% joint venture partner, Oreport Namibia.
Since the 1950s historical production of 500,000 tonnes of high grade (+42%Mn) has occurred at Otjo. Recent trial mining and jig processing operations have produced up to 10,000 tonnes per month at 36 to 38% Mn. The company plans to commence production by early 2012, with feasibility work and additional exploration expanding on the extensive pre feasibility work conducted to date.
Shaw River will acquire the stake in Otjo through the purchase of 100% of Otjozondu Holdings Pty Limited, a Namibian company that holds a 75.5% stake in Otjo. Shaw River intends to continue the 20,000 meter drilling program at Baramine in the Pilbara of Western Australia in the first half of 2011.
The drilling program at Shaw River’s Ghana manganese project is also intended to continue as planned. The terms of the acquisition include:
1. The payment of USD 5.13 million cash, being AUD 5,236,831 (deemed exchange rate of USD 0.9796=AUD 1)
2. 31,495,417 Shaw River shares issued at a deemed issue price of 13.573 cents per share, valued at USD 4.2 million (subject to voluntary escrow for a period of 12 months from completion)
3. 2,053,114 Atlas Iron shares at a deemed issue price of USD 3.08269, valued at USD 6.2 million
4. 45 million unlisted Shaw River options exercisable at AUD 0.20 each and expiring 5 years after the date of issue (subject to voluntary escrow for a period of 12 months from completion)
