MHM Metals has entered into a merger term sheet with Alliance Mining Commodities, the owner of a 90% interest in the Koumbia bauxite project in Guinea.
The Koumbia project is located in the Boke bauxite belt in Guinea, a significant regiona for premium-quality direct shipping bauxite. The government of Guinea holds the remaining 10% interest in the project.
According to MHM, the merger provides a “unique opportunity to leverage a world class project off MHM existing management’s significant experience in the development of bulk commodity and infrastructure projects to create a substantial new ASX-listed direct shipping bauxite producing company in the short to medium term.”
AMC has spent over US$40 million to date on exploration and resource delineation, a definitive feasibility study for a 10 million tpy operations, and environmental and social impact studies.
It has been granted a mining concession from the Guinean government and has an agreed mining convention for the development and operation of the mine.
The proposed merger remains subject to a number of conditions, including the completion of due diligence, which is expected by mid-December. Assuming satisfactory completion of due diligence, the companies will execute a binding merger agreement by the end of the year followed by a meeting of MHM shareholders to approve the deal in February of next year.