Wits Basin Precious Minerals Inc. (OTCBB: WITM) is a minerals exploration and development company with interests in three exploration projects. The company today announced a joint-venture partnership with a leading international mining and development company for the steel industry, London Mining Plc.
Subject to due diligence and finalization of definitive documentation, the two companies will enter into a 50/50 joint venture partnership for Wits Basin’s iron ore, a project located near Maanshan, Anhui Province in the People’s Republic of China. Wits Basin CEO Stephen D. King said London Mining’s knowledge in the iron industry will benefit both companies. The company has iron ore and coal mining development projects in Saudi Arabia, Greenland, South Africa, Sierra Leone and Mexico.
“We are thrilled to be able to finance this revenue-producing and cash flow-positive project with London Mining,” King stated in the press release. “London Mining has focus on and expertise in the iron ore industry and we are excited to be uniquely positioned in acquiring this proven China-based iron ore business. Based on current iron ore spot pricing and the drill-indicated resources, we believe this project will be cash-flow positive in excess of US$30 million in the first 12 months of operation.”
Per the agreement, London Mining would provide US$45 million in exchange for a 50-percent equity interest in the project. London Mining would have appropriate board representation as well as customary and expected ownership rights in the joint venture. Following completion of acceptable due diligence the parties believe they can close the transaction within six weeks.
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