Chinese acquisition of manganese operation reassuring at a volatile time

Nov 12, 2016 News

-Natural Resources Ministry

Government says it is heartened with a recent Chinese acquisition of the Matthews

File photo: Activities at the Matthews Ridge work site, a few years ago.

Ridge Manganese Project in Region One.
According to the Ministry of Natural Resources, the acquisition by Bosai Minerals Group would come in the face of volatile international markets and other uncertainties.
The transaction, it said, speaks to the renewed confidence that investors have placed in the country’s mineral resources sector.
The ministry said that it has given its commitment to support the investment.
On November 4, 2016, Canadian-owned Reunion Gold Corporation entered into an agreement to sell its Matthews Ridge Manganese Project to the Bosai Minerals Group.
Under the terms of the agreement, Bosai will pay to Reunion a total amount of US$10 million, of which US$5 million is payable at closing and US$5 million is to be paid at the rate of US$2 per tonne of manganese concentrate or ore shipped from Matthews Ridge, following production.
“The Ministry of Natural Resources and the Guyana Geology and Mines Commission urge the principals of the new Bosai-controlled manganese entity to engage in their exploration and extraction activities in a manner that is respectful to the rights of workers, to the country’s laws and to the environment.”
According to the agreement, Reunion agreed to transfer to Bosai the four prospecting licences, which make up the Matthews Ridge project— the March 2011 Mineral Agreement between Reunion, the Government of Guyana and the Guyana Geology Mines Commission (GGMC), as well as capital assets located at Matthews Ridge.
”The closing of the sale of the Matthews Ridge project is subject to having obtained all required regulatory, shareholders and government approvals and consents, including the approval of the TSX Venture Exchange and the consent of the GGMC and the government of the Co-operative Republic of Guyana. All such approvals and consents are expected to occur over the next few weeks,” Reunion said in its statement earlier this month.
Reunion stated that it intends to continue to focus its exploration in the Guiana Shield of South America, and more specifically on early-stage gold projects.
Already, the company has signalled intentions to acquire 80 percent interest in a gold project in French Guiana, South America.
Earlier this year, Reunion said that low world prices, which have dropped some 80 percent, have affected the development of the Matthews Ridge, Region One, manganese mining operation.
The company was granted a two-year extension on its licencing obligations by GGMC, and has a 25-year agreement with the Government for the development of the manganese operation.
”As a result of the significant decline in manganese price which has adversely affected the development of the Matthews Ridge project, the GGMC has agreed to defer certain obligations under the licences for a period of up to two years, ending April 30, 2018,” the company had announced.
President David Granger had received a courtesy call from Executive Chairman of Reunion Manganese Incorporated, David Fennell, who gave him an update on the company’s operation at Matthews Ridge operation.
Reunion had said earlier this year, under the current market conditions, “There can be no assurance that the company will be able to complete a financing or other type of arrangement to fund its ongoing obligations and develop its Matthews Ridge project”.
The Matthews Ridge project which contains a significant manganese resource is located in the North West District of Guyana.
Reunion’s operations are located on the site of the abandoned Matthews Ridge Manganese Mine which was operated by a subsidiary of Union Carbide Corporation from 1962 to 1968.
In excess of 1.66 million tonnes of manganese concentrate were shipped from the mine site during that period.
The main project footprint consists of a 15 km-long series of nine hills contained within the Matthews Ridge formation, which hosts the manganese mineralization and is known to extend for more than 40 kilometres of strike.
Prior to Reunion acquiring the project, previous mining operations were confined to hills five to nine, with little or no work done on the other hills.
Reunion commenced exploration in October 2010 with the objective of delineating substantial manganese resources in and around the Matthews Ridge deposits, and assessing the economic potential of the project with the help of modern exploration, processing and mining technology.