Lindian Resources Ltd. shares closed up over 7% on the ASX Aug. 3, after the company announced a binding heads of agreement to farm in and earn a 75% stake in the Lushoto bauxite project in Tanzania.
Under the terms, the company will acquire an initial 51% stake in the project from Batan Australia Pty. Ltd. by spending A$400,000, with an option to increase this stake to 75% by spending a further A$1.4 million to complete a feasibility study.
Meanwhile, the vendor's' 25% stake in the project will include the ability to utilize 16% as the government interest currently mandated upon the project reaching a production stage.
The transaction is subject to the company completing due diligence and satisfaction of other conditions.
The project was a historical bauxite mine supplying the local cement industry with old data confirming high-grade and low silica levels.
During a site visit, the ASX-listed company collected 22 grab samples, which yielded grades of up to 58% aluminum oxide with an average grade of 46% aluminum oxide and very low silica content with an average grade of 1.6% silicon dioxide.
Lindian is targeting defining a JORC-compliant mineral resource capable of sustaining an operation that produces direct shipping ore free-on-board Tanga port.