ASX-listed Tanga Resources will acquire the high-grade Joumbira zinc project, in Namibia, and raise A$1.16-million to fund the transaction and start planned work programmes.

The company entered into a binding option agreement to acquire 100% of the issued shares of Namibia-registered Coldstone Investments, which has a joint venture (JV) agreement with government-owned Epangelo Mining to acquire 80%, or potentially 90%, of the zinc/lead/silver project in the Damaran belt.

Joumbira is held in an equity JV with Epangelo, with Coldstone holding a 10% equity interest, which will increase to 40% following the completion of the upcoming work programme in February 2018 and the associated preliminary study work.

Coldstone may then increase its equity interest to 80% by expending a minimum of $1-million over the next two years and ensuring the satisfaction of certain milestones to demonstrate the project is being advanced to a decision to mine. Coldstone can dilute Epangelo to a 10% free-carried interest after earning an 80% interest in Joumbira.

Tanga will issue 44-million fully paid shares to Coldstone as a consideration for the project, as well as deferred payments in either shares or cash of up to A$750 000 on completion of certain milestones.

“We are pleased to announce the option to acquire such an exciting project and, through our acquisition of Coldstone, [our] partnering with Epangelo to advance the Joumbira zinc project. Joumbira is a highly prospective, advanced . . . project, in a world-class mining jurisdiction and the timing for shareholder exposure to zinc could not be better,” Tanga Resources CEO Matthew Bowles stated in a press release last month.

He noted that Tanga now had two highly prospective projects on which it could build. The company’s other exploration project is the Hanang gold project, in Tanzania. In the Hanang project area, Tanga Resources is developing the Winston gold discovery.

“We look forward to further exploration success from both projects in the near future,” he said.

As a result of the advanced nature of Joumbira and as part of the technical due diligence, the immediate focus of exploration will be on diamond drilling to follow up on the historical drilling results, as well as test strike and plunge extents to determine the key controls of mineralisation.

The company plans to start this work programme next month. Samples will also be tested for multi-element analysis, as historical assays were limited to only zinc, lead and silver.

These samples will also be used to carry out metallurgical testwork to confirm that the metals can be liberated efficiently.

Tanga has secured commitments to raise A$1.16-million by placing 116.4-million new shares. The proceeds of the placement will be used to complete the transaction, to fund planned work programmes and for due diligence matters and additional exploration at Joumbira and Hanang.

The transaction is subject to the conditions precedent, including the completion of due diligence enquiries.