(MENAFN- ProactiveInvestors - Australia) Callabonna Resources (ASX: CUU) is moving into Morocco with the acquisition of an interest in 19 exploration tenements, 12 of which are prospective for manganese, for A$1 million in cash and shares.
The company has entered into a binding, conditional memorandum of understanding to acquire 100% of Element Morocco Limited, a Hong Kong incorporated company that holds the mining interests.
The deal will give Callabonna an 80% interest in six mining concessions and a 100% interest in 13 exploration concessions.
Morocco is emerging as a significant manganese producer exceeding 60,000 tonnes per annum of exports to established markets including China, the U.S., India and Spain.
The 306 square kilometres of tenements have shown potential for excellent manganese grades and are early stage exploration projects with potential upside.
The main work to date has been on the southern areas where the six mining concessions are located near the old Tasdremt manganese mine.
The Tasdremt concessions are well located with good road access 150 kilometres from the Port of Agadir and potential for extracting manganese oxide by open pit mining.
Tasdremt is considered the most advanced because it has had historical drilling and trench sampling by Element Morocco in 2012.
Exploration in the mid 1970s reported manganese grades typically in the range of 30% to 40%.
Trench samples from 2012 have confirmed these grades and have also reported lead values in the range of 3% to 6% along with silver contents of around 20 grams per tonne (g/t).
Exploration potential exists in two areas on the Tasdremt concessions.
Ore exists at or near surface over a large flat area near where Element Morocco conducted limited trenching in 2012, and the 'middle horizon' at a depth of around 20 metres over an area of 500 by 300 metres has been defined by previous drilling and adits in 1975-76.
Placement
Callabonna also plans to undertake a placement of up to 20 million shares to sophisticated investors at $0.04 per share to raise up to $800,000.
Of the money raised, $500,000 will be utilised for the acquisition consideration and $300,000 will be allocated to first pass exploration expenditure and costs of the transaction.
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