Africa-focused exploration and development company Arc Minerals has signed a joint venture (JV) agreement with a subsidiary of Anglo American over its copper interests in the northwestern region of Zambia.
As part of the agreement, Anglo American will have the right to retain a 70 % stake in the JV for an aggregate investment of up to $88.5 million, including cash consideration of up to $14.5 million, based on exploration expenditures announced in May last year.
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Serving as the first new investment in Zambia in 20 years, the deal and its related investments and cash payments will be subject to Zambian regulatory approvals and further conditions being met.
“This agreement represents a major turning point for Arc and follows many months of negotiations,” stated Arc Minerals Executive Chairman, Nick von Schirnding, adding, “I am delighted to be signing this agreement with Anglo American which will, upon execution and completion of the definitive agreements, result in the potential for significant investment by a reputable major mining company in the tenements in north west Zambia and a very exciting time ahead for us.”
The JV holds licenses to explore copper and cobalt projects in the northwestern province of the East African country, which serves as the second largest producer of copper in Africa. What’s more, Zambia has set a target to more than triple its annual copper production of approximately 800,000 tons to three million tons per year over the next 10 years.
“Upon closing, this will see the recommencing of the exploration campaign by the joint venture under the management of Anglo American, a renowned industry leader, whom we are delighted to be partners with going forward,” von Schirnding concluded.
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The formation of the JV will be subject to an exclusivity period for up to 90 days to allow for satisfactory due diligence, the execution of definitive agreements, and other customary conditions, with an additional 90 days having been earmarked for the negotiation of the JV documents.