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AfriTin signs memorandum of understanding with MRI Trading
AfriTin Mining announced the signing of a non-binding memorandum of understanding with MRI Trading on Monday, for an artisanal buying operation for tin concentrate in Namibia.
The AIM-traded firm described MIR as a "world leader" in trading metals and minerals, and petroleum products, specialising in the trade of non-ferrous ores, concentrates, refined and precious metals and their related by-products for a global smelting and processing customer base.
Concurrently to AfriTin's work programme to achieve its objective of production from the Uis mine later this year, the company said it intended to explore with MRI the possibility of sourcing cassiterite concentrate from local artisanal miners to establish early cash flows.
The proposal could also add value to the people of Damaraland by providing economic opportunities to the community, the board asserted.
Additionally, AfriTin and MRI would explore establishing a buying station, which would allow for the analysis of the material offered by the artisanal miners.
The results of the analysis from such a buying station would determine whether material was purchased or rejected.
The terms of the non-binding MoU stated that MRI would provide funding of up to $200,000, interest free and repayable from AfriTin's share of the profits until extinguished, for the set-up and operations of the buying station for an initial 12-month period, which would include required equipment, working capital and an on-the-ground trader/manager.
It also called for the conditional execution of an offtake contract whereby MRI would have exclusive right to all material purchased from the artisanal miners through the buying station, with AfriTin receiving 50% of the net profits received by MRI resulting from the on-sale of the artisanal material.
Those terms remained subject to further discussion and negotiation.
AfriTin said there could be no guarantee that the buying station or the terms of the MoU would be progressed, or that any of the funding set out in the MoU and summarised in the announcement would be provided by MRI to AfriTin.
It added that further updates would be provided in due course when definitive legal agreements were executed.
"The relationship with MRI enables AfriTin to explore a number of objectives for the company," said AfriTin CEO Anthony Viljoen.
"First and foremost, we believe that by buying from local artisanal miners, we will increase the economic activity in the region and as a result contribute to the upliftment of the poverty-stricken Damaraland.
"Secondly, the sale of tin concentrate from the area into the world market will signify the first steps in the return of Namibia as a global player in the world tin market."
Viljoen said the collaboration between the company and MRI, and the commitment made by MRI to the establishment of an artisanal buying network, demonstrated "significant support" for the firm's belief that there was going to be an increasing demand for tin in the future, coupled with a global decrease in supply.
"The potential also exists to expand this relationship as the company continues on its expansion path."