Denham to support Diamond Fields’ Madagascar zircon project
TSX-V-listed Diamond Fields Resources (DFR) on Thursday unveiled a cooperation agreement with private equity firm Denham Capital’s Denham Mining Fund, which also includes an option agreement that could see the junior being carried to production at the Beravina zircon project, in Madagascar.
Denham Mining Fund’s TMH Acquisition would make an immediate payment of $250 000 to DFR and would fund the project’s 2019 work programme, which would entail $500 000 over seven months.
Once completed, TMH would have the option to acquire 100% of the project for $2-million and a 9% sales royalty. If exercised, TMH would incur all future capital and operating expenditures, while DFR would benefit in perpetuity from its right to 9% of all future mineral sales.
TMH would have to place the project into production by no later than June 30, 2023.
"We are pleased to have secured the cooperation of such a strong financial and technical partner for Beravina. We have confidence that the 2019 work programme will meet expectations and confirm the technical merits of the project. If the option is exercised, DFR will be in the enviable position of being carried through to production at no cost whilst retaining a very substantial economic stake in future sales revenue from Beravina,” said CEO Sybrand van der Spuy.
DFR’s share price fell by 10.5% on Thursday to C$0.26 a share.
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