Solidcore Resources plc, a company mining gold in Kazakhstan, has agreed to establish a joint venture with Omani Minerals Development Oman (MDO) for geological exploration and development of the Khabiyat copper-gold project in Oman, the mining company reported. The agreement includes the ability for Solidcore to gradually acquire a stake in the JV from 20% to 60% through an earn-in mechanism.
«We are pleased to partner with MDO on this JV which marks our first exploration venture outside Kazakhstan and fits into Solidcore’s strategy of disciplined growth and portfolio diversification. The Khabiyat Project represents an important entry point for the Company’s further expansion in the region and has the potential to become a major mining and processing hub in Oman,» Solidcore Resources plc CEO Vitaly Nesis said.
In turn, MDO CEO Mattar Al Badi said Solidcore has extensive expertise across the entire mining value chain, from geological exploration to the construction and operation of mining facilities.
«We believe our JV will help unlock the Project’s potential while supporting the development of Oman’s mining sector through the application of international best practices, technical know-how and operational excellence,» he said.
Under the agreement, Solidcore has the right to acquire up to a 60% stake in the joint venture in three stages. In the first stage, Solidcore will acquire a 20% stake. The company’s investment in the joint venture’s capital at this stage will total $8 million. In addition, Solidcore will make an initial cash payment of $500,000 to MDO. The funds will be used for geological exploration during the first two years. Upon completion of the first stage, Solidcore will also make an additional cash payment of $1.5 million to MDO.
Upon successful completion of the first stage, Solidcore will have the option to acquire an additional 25% stake in the joint venture. The company’s investment at this stage will total $20 million and will be used for further geological exploration and the preparation of a JORC-compliant mineral resource estimate over the two years following completion of the first stage.
Upon deciding to proceed to the third stage, Solidcore will also make an additional cash payment of $1.5 million to MDO.
Upon successful completion of the second stage, Solidcore will have the option to acquire an additional 15% stake, bringing its interest in the joint venture to 60%. The purchase price for the stake will be determined based on the project’s contained copper equivalent (CuEq) and the average trading multiple of an agreed peer group.
Following the completion of the third stage, MDO and Solidcore will fund further development of the project in proportion to their respective stakes in the joint venture.
The license area in Oman is considered prospective for copper-gold volcanogenic massive sulfide (VMS) mineralization. The exploration license covers an area of 84.5 square kilometers.
The project lies in Al Batinah North Governorate in northern Oman, about 29 kilometers from the city of Sohar, which serves as the country’s largest industrial port and could become an export hub for the project.
The site has good access via paved roads and is located in a well-established mining district at the foot of the Al Hajar Mountains, with well-developed infrastructure and a transport network.
Minerals Development Oman (MDO) is a state-owned mining investment and development company in the Sultanate of Oman. The company was established to support the development of Oman’s mining sector by investing in strategic projects and implementing them nationwide.
