|Current progress report
AMFI signed a framework agreement with Gécamines, the DRC-state mining corporation that owns the Kipushi mine, in 1996 to develop a program of rehabilitation for Kipushi. This agreement was extended in 1998. AMFI has so far spent approximately $3.5 million on work to identify commercially viable rehabilitation options.
In early August, 2000, AMFI concluded an option agreement with Zinc Corporation of South Africa Limited ("Zincor") to participate in the redevelopment of Kipushi. The option agreement, which has the approval of both Gécamines and the applicable regulatory authorities, resulted from AMFI's desire to find a partner with the most appropriate financial and technical resources, strategic vision and regional commitment to meet the needs of the project.
Zincor confirmed to AMFI in December 2000 that it intended to exercise its option. The decision followed four months of due diligence by Zincor and the completion by Zincor of a preliminary scoping study into economics of the project and options for its development.
On January 29, 2002, Adastra and Zinc Corporation of South Africa, a 100% owned subsidiary of Kumba Resources and since renamed Kumba Base Metals (Kumba) finalized a joint venture agreement to govern the evaluation and development of the Kipushi zinc mine. This agreement formalizes the relationship between Adastra and Kumba, grants Kumba the right to earn an interest of up to 50% by the subsciption of up to US$ 3.50 million and lays the foundation for a new company to manage the furture operations of the mine. Kumba?s contribution will be expended on a bankable feasibility study, with any balance as an equity contribution to the capital cost of the mine's development.
The next step in the process is to complete negotiations with Gécamines regarding the appropriate fiscal regime determined with the Government of the DRC, a feasibility study would then be conducted which would determine the optimum economic approach for the project.
Kumba is the largest producer of refined zinc in Africa with a 115,000 tonnes per annum electrolytic zinc plant at Springs, near Johannesburg. It is also a major producer of high-purity sulfuric acid. It is the dominant producer of zinc in the SADAC region, and has considerable experience in zinc refining and production.
No. 5 Mine Shaft
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