Alara Resources’ Oman JV partner secures €60 million to develop Washihi-Mazzaza copper project

Alara Resources’ (ASX: AUQ) joint venture vehicle Al Hadeetha Resources has executed a €60 million Euro Investment Agreement with Qatar-headquartered SAMA Global Investment.

Emerging from a trading halt today, Perth-based Alara said the funds would be used for the development of the Washihi-Mazzaza copper project located in Oman.

The capital injection will be applied principally to fund construction of mine-site infrastructure for a 1 million tonne per annum processing plant at the project, while Al Hadeetha will also have scope to develop other projects with the funds as mutually agreed.

Under the terms of the agreement, the investment will be secured over Al Hadeetha’s mining licence and related assets with SAMA to secure a €1 million establishment fee.

Following a 24-month grace period, Al Hadeetha will pay a fee equal to 1.5% per annum of the total investment amount over a six-year term.

Alara chairman James Phipps said the investment agreement reflected the inherent value of the Washhi-Mazzaza copper project and the strength of its joint venture relationship in Oman.

“Execution of Alara’s strategy to develop and expand its project portfolio beyond Washhi-Mazzaza will also be strengthened by the SAMA investment,” he said.

Alara managing director Justin Richard also welcomed the finance deal with SAMA.

“We expect the relationship with banks and other financiers to be further strengthened by the SAMA Investment Agreement, with other finance options still under consideration for targeted project development opportunities,” he said.

Washihi-Mazzaza project

Alara is currently progressing a mixture of base metals projects in Saudi Arabia and Oman, which it hopes will lead to eventual production, starting with a copper mine.

Alara has a 70% interest in the Washhi-Mazzaza project with Al Hadeetha Resources holding the balance.

The project, which comprises three exploration licences covering approximately 80 square kilometres is located on the Semail Ophiolite belt in northern Oman.

Washhi-Mazzaza has an indicated resource totalling 6.84 million tonnes grading 0.90% copper and 0.17 grams per tonne gold and a 7.27Mt inferred resource at 0.71% copper and 0.20g/t gold.

Oman has a long and illustrious history of copper production which Alara hopes to capitalise on by establishing Washhi-Mazzaza as a low-cost production mine in the country.

The company’s other assets include the Khnaiguiyah zinc-copper project in Saudia Arabia with strategic partner Manajem, as well as the Al Hadeetha copper-gold project located in Oman.

Alara’s shares gained 60% to $0.032 in afternoon trade.