ASX-listed Winmar Resources (ASX: WFE) reports it has successfully incorporated a joint venture company in the Democratic Republic of Congo to operate the Luapula cobalt processing facility, fast-tracking the company towards holding a producing asset.
The new company – Winmar Lufira Mining Company S.A. – will represent a 50-50 JV between the Australian junior and African Holding Investment Company (AHIC), a mining and construction conglomerate operating across the continent.
AHIC is the sole legal and beneficial owner of the Luapula processing facility and will contribute a 50 percent interest in the plant to the joint venture.
Winmar will incur an upfront US$5.5m cash payment in addition to a royalty on sales revenue as well as a series of share issues. Winmar is also due to make additional payments for the acquisition of six exploration licenses prospective for cobalt and copper.
Winmar intends to act as the operator and manager of the new joint venture company, chiefly tasked with supplying mine feed from its exploration licenses and other established mining companies.
The company will have sale and marketing rights to 100 percent of the produced cobalt and copper concentrates.
Winmar reports the new JV company has received all necessary permits, approvals and licenses to operate as a company in the DRC. In addition, an application has been lodged for the new company to hold the requisite license necessary to operate the facility.
The Luapula Processing Facility was constructed in 2014, but shutdown in 2016 pending flowsheet upgrades to produce cobalt hydroxide and copper cathodes.
Winmar Lufira Mining Company is expected to be issued a license in the next 4-6 weeks, according to Winmar Resources.
Despite the flurry of activity, Winmar Resources remains suspended from trading on the Australian bourse as it seeks to satisfy the ASX and recomply with listing rules.