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Savannah to start work at Mutamba/Jangamo projects at JV with Rio Tinto


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Savannah to start work at Mutamba/Jangamo projects at JV with Rio Tinto

A new consortium arrangement between Rio Tinto and Savannah Resources Plc covering the Mutamba/Jangamo group of heavy mineral sands projects in Mozambique will allow the latter to immediately start work.

The new agreement, signed after consultation with Mozambique's Ministry of Mineral Resources and Energy, covers Savannah's Jangamo project and Rio Tinto's Chilubane and Mutamba projects, including the Jangamo, Dongane and Ravene heavy mineral sands deposits.

Both companies will transfer legal ownership of their projects to a consortium company, anticipated after the grant of a mining lease, subject to ministry approval, Savannah said Oct. 11.

Rio Tinto and Savannah originally signed the joint venture agreement in June 2015.

The projects will include Savannah's inferred mineral resource of 65 million tonnes at 4.2% total heavy minerals, and Rio Tinto's exploration target of between 7.0 billion tonnes and 12.0 billion tonnes at a grade ranging from 3% to 4.5% total heavy minerals.

The consortium agreement includes off-take on commercial terms for the sale of 100% of production of heavy mineral concentrate from the projects to Rio Tinto.

A scoping study on the Mutamba/Jangamo projects will start immediately and is expected to complete before the end of the first quarter of 2017.

Savannah will operate the Mutamba/Jangamo projects and will have an initial 10% beneficial interest, with the potential to increase it to 51%.

According to the statement, the consortium will focus on defining a potential dry mining operation for staged early development.