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(Sharecast News) - Tertiary Minerals announced the signing of a new joint venture agreement with local partner Mwashia Resources on Monday.
The AIM-traded firm said the agreement was intended to consolidate ownership of the Jacks, Mukai, and Mushima North exploration licences into a new Zambian company named Newco.
Under the agreement, Newco would be 90% owned by Tertiary's subsidiary Tertiary Minerals Zambia (TMZ), and 10% by Mwashia.
Currently, Mwashia holds all the licences, with Tertiary holding the right to a 90% joint venture interest in the Jacks licence and options to earn a 90% joint venture interest in the Mukai and Mushima North licences.
The options required Tertiary to meet certain expenditures and make payments totalling $60,000 to Mwashia, as outlined in previous company news releases.
Tertiary said the JVA effectively relieved the company of the expenditure obligations under its option agreements on the Mukai and Mushima North licences.
Additionally, it would bring forward the payment to Mwashia and consolidate ownership of the licences under TMZ's control.
Mwashia's 10% interest in Newco would be carried by TMZ, with incurred costs being recovered as a priority from future profits.
"This joint venture agreement is a win-win for Tertiary and Mwashia and a further example of the excellent working relationship we have developed with our local partner which enabled the recent agreement with KoBold Metals on the exciting Konkola West Project," said executive chairman Patrick Cheetham.
"This new agreement simplifies our corporate structure in Zambia, brings forward our 90% ownership holding in all three of the Licences and creates a vehicle by which the partners can better consider joint venture approaches from third parties on the licences."
At 1330 GMT, shares in Tertiary Minerals were up 5.81% at 0.08p.
Reporting by Josh White for Sharecast.com.