(MENAFN - ProactiveInvestors - Australia) Botswana Metals (ASX: BML) has reached a joint venture agreement with major Botswana mining and smelting company, BCL Limited, covering three of Botswana Metals' prospecting licences where discoveries have been made.
Importantly, the agreement will allow Botswana Metals' discoveries to be fast tracked and financially supported by BCL Limited, which is jointly owned by the Botswana Government and one of the world's largest nickel-copper producers, Norilsk Nickel.
Under the agreement, following an initial US4 million drilling program to earn 40% of the three licences, BCL has the option to continue to fund the projects to the completion of a Bankable Feasibility Study (BFS) to earn a 70% interest.
At that point BCL will gain the offtake rights, at commercial prices, to any ore mined.
The plan is to truck the ore to BCL's smelter operations for processing, 55 kilometres to the southwest at Selebi Phikwe.
Botswana Metals' nickel-copper ore is comparable to the ore that has been mined from BCL's Selebi Phikwe mine for over 50 years.
Botswana Metals will retain a 30% interest after the BFS is completed, at which time the management of the projects will be transferred to BCL.
The agreement is subject to Botswana Metals being granted retention licences over the prospecting licences by the Botswana Mines and Minerals Department. The company lodged retention licence applications in September 2012.
The agreement covers about 143 square kilometres of Botswana Metals' total exploration portfolio of 2,500 square kilometres.
The three licences host the Maibele North nickel-copper-platinum group elements, Airstrip copper-silver and Dibete copper-silver prospects.
BCL will have the first right of refusal to participate in any exploration activity over any of Botswana Metals' other prospecting licences.
An aggressive drilling program is expected to begin soon.