ZincOx Resources said Monday it is selling its Yemen arm to Ansan Wikfs, its joint venture partner in Jabal Salab.
The disposal of ZincOx Resources (Yemen) Limited, which holds a 52% interest in Jabal Salab, will give Ansan Wikfs complete control of the venture.
Jabal Salab has the right to exploit the Jabali deposit in Yemen, which contains both silver and zinc.
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The consideration for the sale includes series of deferred payments to be made from cash generated from the currently undeveloped Jabali deposit once mining operations commence.
The deferred payments are completely dependent on financing of the project and sale of products.
They are further dependent on the London Metal Exchange zinc and silver prices at the time of future sales of the products and are designed to recover the company's past investments in Jabal Salab.
Ansan Wikfs will make a nominal payment of $1.0 at the time of the transfer of ownership, acknowledging that the value will be in the project once developed.
"Due to the realignment of our corporate strategy towards recycling, our interest in primary natural resources has diminished and it is right therefore that our joint venture partner takes over the management and development of this exciting project," ZincOx Chairman, Andrew Woollett, said.
"With their very strong connections in the Middle East generally and Yemen in particular we believe they are best placed to pursue the financing of the project."
Shares fell 0.98% to 25.25p at 10:08 Monday.
RD
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