Namekara Vermiculite Mines

Australian company Black Mountain Resources has decided to sell its license for the Namekara vermiculite mine in exchange for a debt relief of about US$4.2m from one of its shareholders.

The company has struggled to pay off its debts, explaining that the demand for vermiculite on the international market had slumped. “The market conditions for consistent sales of vermiculite products have impacted on the Company’s ability to achieve the intended cash flow from the Namekara Vermiculite Mine as initially intended, and the company has been unable to consistently service its debt obligations, without extensions. Given this, and subject to shareholder approval, the company proposes to dispose of the Company’s 100% interest in the Namekara Vermiculite Mine,” Black Mountain Resources announced in February.

In March, after releasing its annual report for the year ended December 2017, Blackmountain Resources confirmed that it had “entered into a restructuring Heads of Agreement with its major creditor Richmond Partner Masters Limited under which it will dispose of its wholly owned subsidiary Namekara Mining Company Ltd and its Namekara Vermiculite Mine.” The sale of the license will see Blackmountain’s debt drop to US$460,000.

Stories Continues after ad

Analysts say that; “With vermiculite being a new source of income for Black Mountain Resources, the company is bound to face a number of challenges in the pricing of its product in order to grow its clientele, and an erratic commodity market, all of which could hit its bottom line.” The sale of the license comes less than five months after the company exited the mining industry in the United States of America, where it held some silver assets, claiming it needed to focus on developing the Namekara vermiculite mine.

The sale is bound to take the development of the Nameraka mine a couple of steps back even though some specialists consider the large flakes of vermiculite at the site to be world-class. Richmond Partners Master Limited, an investment firm that is a shareholder in Black Mountain Resources Limited, is now scouting for a mining company that can take up the Namekara vermiculite license.

When Richmond Partners Master finally lands on that company, it will cease being a shareholder in Black Mountain Resources Limited. Blackmountain Resources has now instead said it will concentrate on the phosphate resources and other minerals, at the nearby Busumbu mine for which it controls a 75 per cent interest in a mining license.
Black Mountain says it plans to invest at least $1 million each year for the next three years in the Busumbu phosphate project, taking it into commercial production within two years.

Black Mountain says its plans for the Busumbu phosphate include resource definition drilling, preliminary mine planning and optimisation studies, among others. The company considers the Busumbu project to be “one of two world-class” phosphate deposits in Uganda.

Website | + posts