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Glencore to Invest $80m in Burkina Faso Zinc Mine
iconAug 25, 2010 11:40iconCST

PERTH, Aug. 25 -- Commodities trader Glencore International would invest $80-million in the Perkoa zinc project, in Burkina Faso, to move it into production by early 2012, joint-venture (JV) partner Blackthorn Resources said on Tuesday.

Glencore would fund the remaining capital required to commission the Perkoa project, with $50-million provided in equity and the balance in project finance.

The Swiss commodities trader would effectively gain control of 50,1% of the zinc project, with ASX-listed Blackthorn and the Burkina Faso government holding interest of 39,9% and 10% respectively.

Glencore would be responsible for managing the construction at the project, with the aim of producing the first saleable zinc concentrate by early 2012.

Construction at the project was suspended in mid-2008, after global metal prices dropped sharply. In January, Blackthorn announced that it would team up with Glencore to resume development work on project.

Blackthorn and Glencore have now signed a binding JV agreement in the form of an umbrella deed.

"This is a very significant milestone for Perkoa and for Blackthorn Resources shareholders," said MD Scott Lowe on Tuesday.

"With the signing of the umbrella deed, the formation of a legally binding JV between Blackthorn Resources and Glencore is now subject only to shareholder approval and a limited number of conditions precedent."

Lowe noted that the investment by Glencore would also result in Blackthorn having two of the world's largest resources companies as JV partners, in two African base-metals projects, the other being diversified miner BHP Billiton, which is involved in the Mumbwa project.

The Perkoa project has a total mineral resource of 6,72-million tons, grading at 16,4% zinc, for a total contained resource of more than 1,1-million ounces. The project is also estimated to host around 238 000 t of contained silver.


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