Bryah Resources Limited (ASX: BYH) is a metals and mining company, which is primarily focused on copper-gold-manganese. It has two projects situated in central Western Australia namely; the 200km2 Gabanintha Project and the 880 km2 Bryah Basin Project.
On 23rd April 2019, Bryah Resources announced that it has exercised options to purchase the mining lease for the Horseshoe South Manganese Mine including the rights, with which the company can prospect, explore, mine and develop manganese ore.
These tenements are important for the Bryah Basin Manganese Project. They are subject to Farm-In and Joint Venture Agreement between Bryah and OM (Manganese) Limited (OMM), a wholly owned subsidiary of OM Holdings Limited (ASX: OMH). According to the Agreement, BYH would acquire an approximate area of 660km2 of its Bryah Basin Project. OMM is currently operating the Bootu Creek manganese mine in the Northern Territory in Australia.
Under the agreement, the company has received $250,000 as a signing fee payment from OMM which will be directed towards the working capital requirements. Another amount of $500,000 will be released by OMM (by 30th June 2019) to fund manganese exploration activities which will be managed by Bryah.
The second payment of $250,000 to the company will be made by OMM (during July 2019) if it wishes to proceed with further exploration. A drilling programme of 3,000 metres is to be initiated in the first week of May 2019.
In order to acquire a 51% stake in the joint venture, OMM will progressively offer $2 million to fund the next stage of manganese exploration. OMM may further choose to acquire another 9% stake (a total of 60%) by funding another $1.8 million of project expenditure. An additional $2.5 million can be released for the project expenditure, to acquire another 10% interest which will take the total earnings interest of OMM to 70%.
Consideration for purchasing the Horseshoe South Manganese Mine is payable as $150,000 in cash and $150,000 in Bryah Ordinary Shares based on the five days, volume weighted average price (VWAP) prior to the date of exercise (for the tenement M52/806).
For the purchase of Manganese minerals rights (under tenements E52/1557, E52/1860 and M52/1068) a total consideration of $40,000 is payable including $20,000 in cash and $20,000 in Bryah Ordinary Shares based on the five days VWAP prior to the date of exercise.
Horseshoe South Manganese Mine
Horseshoe South mine is the largest historic manganese mine in the region and has produced approximately 1 million tonnes of high-grade manganese ore from 1948-1969 and 2008-2011. The areas enriched with manganese were 3 to 4.5m thick and generally expanded up to the lengths of 400 to 500m. The recent samples of rock chips from the lease has determined the content quality up to 48.8% Mn.
The market capitalisation of the company is A$3.98 million. The stock has a 52-week high and low of A$0.17 and A$0.065 respectively. The stock has increased by a massive 23% and last traded at A$0.080 by the end of the day’s trading session, after making an intraday high of 0.081 as on 23rd April 2019. In the last six months, the stock has delivered a negative return of 40.9%, and YTD return stands at negative 18.75%.
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