[miningmx.com] — PETMIN announced on Tuesday it has agreed with Hummingbird Resources to provide $2m for the exploration of Hummingbird’s iron ore-rich Ginka licence area in Liberia.
Hummingbird is the largest holder of mineral exploration licences in eastern Liberia, a hitherto unexplored region of Birimian age geology.
Under this agreement Petmin will fund the exploration of the area in a two-stage plan to ascertain the commercial viability of the project.
In terms of the agreement, Iron Bird – a wholly owned subsidiary of Hummingbird – will issue new shares equivalent to 15% of its issued share capital to Petmin for $500,000. This investment is conditional on the transfer of the Mount Ginka licence to Iron Bird.
The first phase investment would be used for the purpose of demonstrating whether a commercially saleable magnetite concentrate can be produced. On successful completion of phase 1, Petmin will invest a further $1.5m in Iron Bird, to increase its shareholding to 50%.
The second phase investment will be utilised to demonstrate the scale of the resource within the licence area.
The Mount Ginka licence area covers approximately 155 square kilometers and is situated in Nimba County in north central Liberia. It is located approximately 15km south of Yekepa, a major iron ore deposit located at Mt Nimba, which is currently being developed by AccelorMittal.
