Black Mountain Resources Ltd is set to acquire the Namakera vermiculite mine and Busumbu phosphate exploration project in eastern Uganda from African Phosphate Pty Ltd.
The Australia Stock Exchange- listed firm said it has executed formal documents to buy 100 per cent of Namakera Mining Company Ltd, which operates the two assets.
Meanwhile Guangzhou DongSong Energy Group Company has received $240 million to develop the Sukulu phosphate project in Tororo.
The acquisition is subject to Black Mountain’s ability to raise $2.5 million either through debt or equity to fund the investment near Mbale and Tororo towns, due diligence and receiving all regulatory and shareholder approval.
Black Mountain will issue 400 million shares and 1 per cent royalty revenue from mineral production. Acquisition includes the existing vermiculite mining and phosphate exploration licenses, all equipment, processing plant, power generator, mine office and all associated site infrastructure.
Phosphate is a major ingredient of agricultural fertiliser. Over 50 per cent of vermiculite is used globally in manufacture of fertilisers and in construction.
Black Mountain director Jason Brewer said investment in Namakera vermiculite provides immediate production and cashflow capable of supporting low-cost, long life-mining operations with expansion opportunities.
“Acquisition gives the company’s shareholders exposure to Africa’s growing fertiliser and agriculture sectors, forecast to increase to over $500 billion in value in the next five years by the African Development Bank,” he said.
Namakera Ltd owns mining licence 4651 for the Namakera vermiculite production mine within Bukusu complex.
It explores Busumbu phosphate project as the holder of exploration licensce 1534 covering majority of the Bukusu complex containing vermiculite, phosphate, copper, iron, zircon and rare earths.