Legend Mining to sell Ngovayang iron project assets to Jindal

Legend Mining to sell Ngovayang iron project assets to Jindal

Legend Mining Ltd is close to finalising the sale of 90% of its stake in the Camina SA holding company for the Ngovayang rail project in Cameroon to India-based Jindal Steel and Power Ltd. On June 17, 2014, the ASX listed company announced that it has met the requirements for its sales agreement for shares and loans struck with a subsidiary of Jindal and has set July 15, 2014 as the date for the contract to be carried out.

The conclusion of the transaction will give Legend a considerable treasure trove for finding new projects and explore its Fraser Range concession in Western Australia,” stated Mark Wilson, CEO of the Australian mining company. Meeting the project’s sales agreement conditions, in the absence of DSO (Direct Shipping Ore), is the result “of a long period of work with the Cameroonian authorities and local shareholders,” he added.

According to the terms of agreement, Jindal is going to acquire the totality of Legend Iron Ltd’s shares and loans in the Camina holding for a cash total of 17.5 million Australian dollars to be settled in staggered payments. An initial tranche of 6 million will be paid at the completion of the contract on July, 6 million after the first 12 months and 5.5 million in ten days following the fulfilment of the mining agreement Jindal and Cameroon. Situated in the South of Cameroon, The Ngovayang project includes three iron exploration licences on a vast scale covering 2,469 km2.

Ngovayang or Nkout? Thanks to the finalisation of the deal, the Indian firm, Jindal, is finally making its debut in the Cameroonian mining sector, particularly in iron exploration and, eventually, mining, after its failed partnership with Britannique Affero Mining, of which one of its Cameroonian subsidiaries, Caminex, is conducting the Nkout iron ore development project, in the South region.

According to reliable sources, Affero and Jindal signed the agreement in 2012, making Jindal the exclusive partner of Affero as a participant in the Nkout project until January 13, 2013. But having reported the heads of Jindal on December 31, 2012, while the exclusivity agreement was still in effect, Affero Mining announced on its website that it was in negotiations with another partner for the Nkout project. The company in question is IMIC, run by the former Affero Mining board member, Ousmane Kane, who ended up buying Affero’s assets. This took place on September 2013.

With a potential of 2 billion tonnes of iron that could potentially reach 4 billion tonnes, according to Caminex which explored it, the Nkout iron ore located 27 km from the Djoum district, is by far the most significant compared to initial revelations on the Ngovayang project with which the Jindal Indian company was finally reassured. Nkout has been presented as the largest iron ore deposit in Cameroon, thus far, compared to the Mbalam iron ore that stretched between Congo and Cameroon with an estimated potential yield of 3 billion tonnes of iron.