Perth, Australia-based IronMountain Mining Ltd. has secured an option to acquire 50% of the equityof a private company that holds prospecting rights to bauxite deposits in the SolomonIslands, the ASX-listed miner confirmed in a statement published March 30.
Under the deal, Iron Mountain paid A$100,000 as an option feeto Au Capital Mining Pty. Ltd., a private Australian company. If exercised, theoptions will allow the mining group to buy 50% of Au Capital in exchange for a totalof 40 million ordinary shares.
The deal is conditional on the results of initial exploration,including identification of a minimum of 8 million tonnes of bauxite with aluminacontent over 45% at the Nendo project.
Au Capital controls the exploration rights to both Nendo andChoiseul — early stage bauxite exploration projects on separate islands of the Solomonchain.
Following due diligence and initial exploration, if Iron Mountainchooses to exercise the options, it agreed to pay for the share stake with the issueof 20 million fully paid ordinary shares to the shareholders of Au Capital. A further20 million shares will be payable after 12 months or on first shipment of bauxitefrom either project.
The deal would also be subject to regulatory approval.
According to Iron Mountain Managing Director Robert Sebek, theprojects could potentially provide the miner with "low-cost" operationssituated close to end-users in Asia.
"The Solomon Islands are ideally located close to Asianmarkets and potentially offer low cost development of new discoveries," hesaid.
Iron Mountain has a number of Australian iron ore and bauxiteprojects, none of which are currently operational, according to data from SNL Metals& Mining.