JOINT VENTURE FOR TETE MINERALS

The London-based companies North River Resources and Baobab Resources have formed a joint venture under which Baobab will develop North River’s exploration licenses at Mount Muande in the western Mozambican province of Tete. The project is looking for magnetite, phosphorus, uranium and gold. Baobab will earn a 60 per cent share in the project if it invests 625,000 US dollars in an initial exploration programme over a period of 12 months.According to a release from Baobab, further investment by the company can bring its share up to 75 per cent, and then to 90 per cent, if it finances a definitive feasibility study. If North River invests on a pro rata basis, it will retain its 40 per cent stake. Baobab says it will “assume technical management and operational responsibilities for the project. Compilation of historical exploration data has commenced, and drilling is scheduled for the second quarter of 2011”.Baobab is already developing iron, vanadium and titanium resources elsewhere in Tete. The release says that “With a view to consolidating its strategic position in the Tete area, the Company approached North River with the objective of entering into an unincorporated joint venture relationship for the purpose of undertaking exploration activities at the Muande project and, subject to exploration success, developing mining operations”.North River holds two exploration licences at Mount Muande, covering 338 square kilometres. The area is about 25 kilometres north-west of Tete city. Baobab’s immediate priority, it says, is to “evaluate the potential of the Muande magnetite/phosphorus deposit”.North River justifies the deal on the grounds that it frees its hands to concentrate on projects in Namibia.According to North River managing director David Steinepreis, “This agreement with Baobab will ensure that these Mozambican licences, which are contiguous with Baobab's Singore and Massamba Group projects, are advanced in order to create value for North River whilst enabling our team to remain focussed on the development of our highly prospective Namibian assets”. Steinepreis said he was confident that “Baobab's highly skilled team, which has considerable experience in the iron ore sector, will be able to realise the potential of this licence for the benefit of all stakeholders.'