AFNR Afnat Resources

 

TIDMAFNR 
 
RNS Number : 2730N 
AfNat Resources Limited 
09 June 2010 
 

 
 
For immediate release 
 
 
                            AfNat Resources Limited 
                           ("AfNat" or the "Company") 
 
  Mozambique Joint Venture Agreement signed with Rio Tinto Minerals Development 
                                    Limited 
 
AfNat (AIM.AFNR) is pleased to announce that the Company has entered a joint 
venture agreement ("Joint Venture Agreement") with Rio Tinto Minerals 
Development Limited ("Rio Tinto"), a wholly owned subsidiary of Rio Tinto Plc 
(LSE: RIO). 
 
The Joint Venture Agreement sets out the terms on which Rio Tinto will manage 
and develop the Company's exploration licenses in Mozambique (more particularly 
exploration licenses PL 1045L and PL 1046L (the "Mozambique Licenses") in 
relation to the exploration of copper, cobalt, nickel, platinum, gold and 
associated minerals and metals in the Manica Province, Mozambique, both of which 
are currently owned by the Company's wholly owned subsidiary Zambezi Níquel 
Moçambique, Limitada. 
 
Highlights: 
 
·          Rio Tinto and the Company will form a new joint venture company to 
hold, manage and develop the 
 Mozambique Licenses ("JVCo"); 
·          Rio Tinto will initially hold a 51% interest in JVCo with the Company 
holding 49%; 
·          To maintain its interest Rio Tinto must fund the first $5m of JVCo 
expenditure or deliver an "order of 
 magnitude study" within 5 years; 
·          Rio Tinto can increase its interest in JVCo to 75% if it incurs the 
following $20m of expenditure, or submits a pre-feasibility study to the board 
of JVCo for approval; 
·          thereafter, each party shall contribute pro rata to the costs of JVCo 
or face dilution; 
·          Rio Tinto shall appoint the project manager who will run JVCo 
(subject to instructions from the JVCo board) and implement programs and budgets 
agreed from time-to-time.  The project manager's fee shall be 12% of JVCo 
expenditure; 
·          JVCo shall have a board of two, with one Rio Tinto nominee and one 
nominee of the Company as long as it continues to hold a 10% interest in JVCo. 
Board votes shall be weighted with Rio Tinto's nominee director's vote worth 51% 
(increasing if the Company is diluted); 
·          all budgets, programs and plans are approved by the JVCo board by 
simple majority; 
·          there are pre-emptive rights should either party wish to transfer its 
shares; and 
·          where a participant's interest falls below 10%, the 90% shareholder 
has a call option to buy the remaining 
 shares, with the acquisition price to 
be agreed in good faith or determined by an independent expert. 
 
George Roach, Chief Executive Officer of AfNat, said: "The joint venture 
agreement signed with Rio Tinto today is an extremely positive development for 
the Company, and for its prospects in Mozambique.  Rio Tinto will provide both 
the capital and the management expertise to develop the Company's Mozambique 
assets and, we hope, further down the line bring the Company's licenses in the 
country into full production.  Additionally, the agreement significantly reduces 
the Company's liabilities in Mozambique which is in line with the Company's 
current strategy to minimise expenditure on its early stage exploration 
projects.  All of the Directors are very excited by the joint venture, which 
they believe is excellent news for the Company's shareholders, and look forward 
to working closely with Rio Tinto to ensure the success of the project in the 
years to come." 
 
 
 
Further details on the Rio Tinto Group 
 
Rio Tinto is a leading international mining group, combining Rio Tinto plc, a 
London listed public company headquartered in the UK, and Rio Tinto Limited, 
which is listed on the Australian Stock Exchange, with executive offices in 
Melbourne. 
 
The two companies are joined in a dual listed companies (DLC) structure as a 
single economic entity, called the Rio Tinto Group. 
 
The Rio Tinto Group finds, mines and processes the earth's mineral resources - 
metals and minerals essential for making thousands of everyday products that 
meet society's needs and contribute to improved living standards.  More 
information regarding Rio Tinto can be found at www.riotinto.com. 
 
 
Enquiries: 
AfNat Resources Limited 
George Roach, Chief Executive Officer 
 
Tel: +44 (0) 20 7881 0180 
 
Nominated Adviser, Seymour Pierce Limited 
Nicola Marrin/Catherine Leftley 
Tel: +44 (0) 20 7107 8000 
 
ENDS 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 JVEKKFDKPBKDBAK 
 

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