AIM quoted mining group Berkeley Mineral Resources (LON:BMR) has finally wrapped up a deal giving it the exclusive right to process 7m tonnes of high-grade lead and zinc tailings at the Kabwe Mine in Zambia. The announcement follows more than two years of negotiations over various waste dumps at the site and some missed targets over when sales would actually get under way.

As part of today’s announcement, Berkeley said it had signed an exclusive option agreement over all the remaining tailings stockpiles at Kabwe. Significant deals had already been signed over waste dumps at the mine in December 2009 and March 2010 and sales had been slated to begin in April this year. Nevertheless, the latest move, which cost Berkeley £100,000, means it has full access to waste dumps spanning 1 sq km and the infrastructure needed to process them. The company said that independent consultants were now checking the new dumps and that sales were expected to start in the second half of 2010.

The rights to process the tailings at Kabwe are being secured from Sable Zinc Kabwe Ltd, a subsidiary of Johannesburg-quoted Metorex. The option is for a period of 60 days from May 27, 2010 during which Berkeley will be carrying out resource, development and legal due diligence prior to completion. In order to exercise the option, Berkeley will be required to pay US$3.0m. In addition, if it exercises the option, it will issue 80m shares to South African-based company Dorset Solutions Ltd which assisted in securing the option.

The Kabwe mine operated from 1904 until it closed due to low metals prices in 1994 and was one of the highest-grade zinc/lead mines ever discovered, with grades between 18% and 25% metal. Historical processing was by simple flotation and the volume of metal left in the tailings is therefore high. The Kabwe site benefits from the existing infrastructure, including good roads, water supply, ample power, local labour and direct on-site rail connections to overseas markets via international railways to South Africa and to Indian Ocean ports.

If the deal goes ahead, Berkeley is planning to carry out processing in two stages, beginning with the easily processed washplant slimes dumps. Phase two will involve the stockpiles of residue tailings dumps, which will require the construction of a new beneficiation plant at Kabwe to process the…

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