The merger of ASX-listed companies Blackthorn Resources and Intrepid Mines is expected to start construction of the Kitumba copper project, in Zambia, in the first half of 2016, after the completion of a definitive feasibility study.
Speaking at the Paydirt 2014 Africa Down Under Conference, in Perth, Australia, last week, Blackthorn Resources CEO Mark Mitchell stated that the merged group would create a well-funded copper company in a strong position to realise the potential of the Kitumba copper project.
He indicated that the Kitumba copper project, situated near the town of Mumbwa, had a $680-million capital cost and a net present value of $461-million for an 11-year mine life, and was expected to produce 56 000 t/y of copper.
Mitchell mentioned that the Kitumba site was readily accessible and would have access to grid power, which would make operation feasible. He also highlighted that Zambia’s good regulatory and government environment was an added advantage to the project.
As a result, the merger had attained full support from both Blackthorn Resources and Intrepid Mines.
“The merger, which has the support of the boards of the two companies, has agreed that Intrepid Mines will use part of its $170-million cash balance to buy back shares at 30c each as part of a commitment to return value to shareholders, while Blackthorn Resources shareholders will hold around 48% of the combined company and Intrepid Mines shareholders will own the remainder of the shares,” said Mitchell.
He further pointed out that the merged group would also provide an attractive alternative pathway to access capital for Blackthorn Resources, while providing an opportunity for Intrepid Mines shareholders to receive a capital return and exposure to an attractive asset portfolio.
Mitchell concluded that the merger would also see the new company well positioned to take advantage of attractive high-impact exploration opportunities in Zambia.