OM Holdings has executed a manganese joint venture agreement with Bryah Resources as the latter has purchased a mining lease including the historic Horseshoe South mine in Western Australia.
Perth-based Bryah’s acquisition includes the rights to prospect, explore, mine and develop manganese ore covering a further 154 square kilometres of ground within the Bryah Basin.
The tenements are subject to the manganese farm-in and JV agreement between Bryah and OM Manganese, a subsidiary of OM Holdings.
The JV aims to explore commercially mineable manganese, leading to near-term production.
This agreement applies to manganese mineral rights over a 660-square-kilometre area, with Bryah retaining all other minerals. It includes several manganese exploration prospects aside from Horseshoe South – the largest historical manganese mine in the region.
“The prices of manganese ore remained robust throughout 2018 and the global outlook for manganese remains positive, as it is critical and irreplaceable element in steel production,” Bryah managing director Neil Marston said.
Manganese, the fourth most consumed metal behind iron, aluminium and copper, is used in batteries, chemicals and the aluminium industry, according to Bryah. The company expects demand for manganese to grow significantly as the uptake of electric vehicles increases.
The $7.3 million farm-in agreement will see OM spend $3 million, including cash payments totalling $500,000 to earn a 51 per cent interest in the manganese mineral rights. OM can increase its interest to 70 per cent by spending a further $4.3 million at Bryah’s elections.
Bryah is the project manager until OM has earned a 51 per cent JV interest and elects to be the project manager. Stage one drilling will commence in the first week of next month.
“The execution of this agreement with the highly-regarded OMH Group is a game-changing event for Bryah and its shareholders,” Marston said.
“The OMH Group has manganese mining expertise and is seeking new resources of manganese ore to replace its Bootu Creek production (in the Northern Territory) in the near future.
“We understand the OMH Group want to maintain their own supply of quality manganese ore for their smelter in Sarawak, Malaysia so by teaming up with them via this agreement, we have substantially de-risked implementation of Bryah’s manganese production strategy.”