Whinnen Resources Acquires Option for African Bauxite Project
Whinnen Resources Limited (Whinnen, the Company) (ASX: WWW.AX) is pleased to announce that it has entered into a conditional agreement to acquire 85% of the Fongo Tongo Bauxite Project in the Republic of Cameroon in Africa, for a total consideration of US$8 million.
Payment will comprise US$4 million cash and US$4 million in shares, and will be subject to satisfaction of milestones as outlined below.
The Fongo Tongo project is located 14kms northwest of the major town of Dschang in western Cameroon and is a high-grade bauxite deposit relative to other deposits around the world. The project covers an area of 916km2 which is very well drained allowing year-round mining and exploration operations. It exists as a series of hilltops on a laterised plateau at between 1500 to 1800 metres above sea level.
The area was first explored in 1956 by the Cameroonian Department of Mines and Geology and again by Alcan in the 1970s and 1980s. All exploration was done by hand and there has been no modern exploration of the project (i.e. never been drilled).
Alcan completed a feasibility study in 1980, which was based on an initial mining target of 1Mt per year of washed bauxite, and a hydro-electric powered alumina refinery producing 400,000t of alumina per year capable of expanding to 1,200,000t of alumina per year. Alcan wrote that the bauxite reserves were calculated at 34.0 Mt at 47.0% Av.Al2O3, and 2.47% R.SiO2 at Fongo Tongo only. The Company believes that these historical results may be equal to the JORC term Inferred Resources, but not reserves. These numbers are in a category varying from indicated (IND) to potential (POT). The low category of the bauxite reserves is emphasized, which means a major exploration program will be required to prove the reserves.
Under the agreement, Whinnen will acquire 85% of Yekani Mining Company (Cameroon) S.A (Yekani) which holds 100% of the Fongo Tongo Bauxite Project. The remaining ownership of Yekani will consist of 15% held by Cameroonian interests. Exploration Licence (Permit de RecherchÃ©) number 028 was granted to Yekani in March 2006. If a mineable resource is outlined, Whinnen plans to convert the tenement to a mining or exploitation permit, in which the Cameroon Government will have up to a 10% shareholding in Yekani.