Globe Metals & Mining has secured more funding from its major shareholder China Mineral Exploration and Development Bureau (ECE) that will be used to boost its exploration activities in Malawi.
The company, which actively operates in Southern and Eastern Africa, signed a memorandum of understanding (MoU) with its major shareholder this week, with ECE committing to substantially fund all of the mining company’s exploration projects in Malawi that include Kanyika Niobium, Chiziro Graphite and the Machinga and Salambidwe rare earth projects, according to www.proactiveinvestors.com.au.
The two parties entered into a binding MoU under which Globe will maintain control of all the exploration activities and ECE will provide up to 10 its members of staff to be based on site and start work this month.
The funding and technical support from ECE provides a mechanism for Global to increase value across the project portfolio and removes a large portion of the exploration risk, according to the report.
“Globe will reimburse ECE for exploration expenditure related to each project upon identification of JORC resource that leads to a pre-feasibility study,” reports the news site.
An announcement on the Australia Stock Exchange (ASE), however, states that the Kanyika Niobium project will remain Global’s priority where it will focus on regional mineralised targets which form part of the MoU, and outside of those resources, which are currently subject to assessment in a Definitive Feasibility Study (DFS.
The company further says that a detailed 2013-14 exploration plan will be finalised in forthcoming weeks.
Globe’s Acting Chief Executive Officer (CEO) Fergus Jockel says ECE has again proven its support to the company through the signing of the MoU which he believes leverages ECE’s internal technical capability.
“We believe the collaboration of the Globe and ECE exploration teams will boost our ability to discover more resources in Africa and strengthen the Company’s asset portfolio and long-term outlook,” says Jockel.
In January last year, Malawi Government extended an exploration license to Globe Metals for a period of two years which meant that the Australian Stock Exchange-listed company will continue exploring niobium until December 29, 2013, with a further two-year option to renew.
The multi-commodity Kanyika project would start production of ferro-niobium, a key additive in sophisticated steels, in 2014.
Globe had a cash balance of US$ 16.63 million at the end of the March 2013 quarter against a current market capitalisation of US$ 16.60 million, leaving its share to trade on par with its cash backing at .075.Follow and Subscribe Nyasa TV :