Lindian Resources Ltd (ASX:LIN, OTC:LINIF) has signed a Memorandum of Understanding (MoU) with Compagnie des Bauxites de Guinée (CBG), which positions Lindian’s Gaoual project as a potential contributor to CBG’s annual bauxite production through a prospective sales contract.
CBG is one of the largest single producers of bauxite in the world with operations focused in Guinea and this MoU sets the stage to bolster yearly bauxite output while providing Lindian with an opportunity to commercialise Gaoual.
The agreement outlines the initial framework for what could become a lucrative bauxite supply contract, thus paving the way for future collaborations between the two entities.
Under the MoU, Lindian will undertake a feasibility study on its Gaoual project. The study is mandated to meet CBG's specific criteria as well as adhere to the environmental and social standards to which CBG is committed.
Gaoual has a JORC 2012 indicated mineral resource estimate of 102 million tonnes with a high-grade tonnage of 84 million tonnes at 51.2% Al2O3.
Screening test work completed in 2021 confirmed that Gaoual high-grade samples showed the average alumina grade increasing by 8.6% (53.8% to 58.4% Al2O3) and the average silica grade decreasing by 71.4% (9.8% to 2.8% SiO2).
“We are delighted to be collaborating with CBG to advance Gaoual. They have exceptional pedigree as one of the world’s most respected and largest bauxite producers and suppliers,” Lindian’s executive chairman Asimwe Kabunga said.
“We have been advancing discussions with them for a number of years on the potential development of Guinea’s next conglomerate bauxite project and this MoU marks a very meaningful step in this process.
"As one of Guinea’s most established bauxite producers with extensive mining operations and infrastructure access, a potential partnership delivers obvious benefits to all stakeholders, most importantly the local community and the government of Guinea. The MoU provides an excellent framework to rapidly advance Gaoual.”
MoU framework
The MoU provides Lindian and CBG with the framework to:
- explore various methods of operating, processing and transporting ore from the Gaoual project to CBG's infrastructure;
- assess procurement, quantity/quality determination, selling prices, selling price adjustment mechanisms, penalties/bonuses and payments between the parties;
- complete a feasibility study for the Gaoual project within two years that meets CBG's JORC criteria for the publication of reserves and resources (including certain drilling density, bauxite density and does not contain any element harmful to a subsequent metallurgical process); and
- negotiate in good faith a possible contract for the sale of bauxite within two years from the start date of the MoU.