MRG enters into Mozambique JV with Sinowin

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MRG enters into Mozambique JV with Sinowin

7:15 CAT | 18 Jun 2024

File photo: Mining Australia

MRG Metals (ASX:MRQ) has entered into a binding joint venture agreement with Sinowin Lithium (HK) Co and Sinowin Lithium Cobalt (ShenZhen) to develop its Mozambique Corridor Sands projects and its other Mozambique heavy mineral sands projects.

A JV company based in Hong Kong will be formalised in the coming weeks.

The company closed trade yesterday (13 June 2024) on the ASX 166.666% higher on the back of the announcement.

Under the binding agreement, MRG will be free carried, including all capital expenditure and operating expenditure, through to 440,000 tonnes of annual concentrate production.

The company will retain equity of 30% of the JV vehicle through mine start-up at 110,000 tonnes of annual concentrate production, reducing during production expansion to a floor equity of 20% when the JV production has grown to 440,000 tonnes of annual concentrate.

MRG and ShenZhen had earlier entered into a non-binding memorandum of understanding on 6 March 2024, with the latter sending geological, construction and design teams to Mozambique the next month to carry out due diligence and begin design work.

The DD was completed in early May 2024.

ShenZhen and MRG have been working to fast track the necessary feasibility and mine design plans required to update the mining licence applications.

A Feasibility Study is substantially progressed and is due to be finalised shortly.

MRG has agreed to a drag-along clause, with a conditional acquisition of MRG’s joint venture equity for a minimum of US$50 million.

Through the joint venture, MRG is partnering with a company with prior international (Canada) mine development experience and the funding necessary to bring a mine to production without external funding.

Source: Mining Australia