Myanmar Metals, together with its local partner Win Myint Mo Industries, has secured East Asia Power (Mining) (EAP) as a project-level investor in the development of the global tier-1 polymetallic Bawdwin Mine.
In a transaction that substantially de-risks the future development and financing of Bawdwin, MYL have agreed terms with EAP where EAP will effectively acquire a 24.5% share of the Bawdwin Concession and Mine in return for reimbursing costs MYL have incurred to date and sharing in the payment of the pending option fee that secures the tenure over Bawdwin.
EAP owns and operates a manganese mine and a coal mine in Myanmar and also manages the operations of the Longh Keng high grade zinc mine and Lashio zinc refinery on behalf of Cornerstone Resources Myanmar Limited.
As a result, the final post-option exercise ownership of equity in Bawdwin between the three parties will be MYL 51%, EAP 24.5% and current shareholders WMM 24.5%. This places total ownership by local Myanmar companies at 49%, with MYL retaining a majority interest and management control over the construction, development and operation of Bawdwin.
EAP will acquire the rights to Bawdwin in return for reimbursing MYL’s costs to date on a pro rata basis. MYL will likely be reimbursed approximately US$1.4 million in the near term as a result. EAP will contribute pro rata to all future costs including the Bawdwin option exercise fee of US$20 million. MYL’s contribution to option fee reduces to US$13.9 million. WMM’s carried interest in the project will be repaid from future dividends.
Myanmar Metals CEO John Lamb stated that the value of EAP’s investment in Bawdwin is a very significant development for MYL as it de-risked the project considerably.
“We now have two well recognised and respected local Myanmar companies that will both hold large stakes in the Bawdwin concession.
“Their participation will assist immeasurably with Bawdwin’s development, it gives us excellent in-country connections and recognition and means that a large percentage of Bawdwin’s ownership stays within Myanmar. It is the right model for a foreign company like MYL investing in such a rapidly emerging and fast-growing economy,” said Lamb.
As per MYL’s ASX release dated 6 March 2018, the total updated Mineral Resource estimate for Bawdwin is 76.9 Mt at 4.6% Pb, 2.3% Zn, 0.24% Cu and 118 g/t Ag in the Inferred category, comprising a high-grade primary resource and low-grade halo in the open-pittable zone (above 750mRL) as reported previously on 17 October 2017 and 1 December 2017.