Niron believes that the Zogota deposit, located in southeastern Guinea, can be brought into production on an accelerated timetable. It had been envisaged that the mine would be connected to a port in neighboring Liberia via rail, allowing for the export of the ore.
Talks are focused on the creation of an effective mining partnership between Niron and the government to mine Zogota, unlocking its potential for all stakeholders including the people of Guinea, Niron noted.
“The company looks forward to bringing this to fruition subject to the satisfactory settlement of all disputes between the parties,” Niron said, adding that an announcement will be made in due course, if appropriate.
Until recently, Zogota was part of a long-running dispute between the government and Nysco, the 100% shareholder of Israeli diamond millionaire Beny Steinmetz’ mining firm BSG Resources (BSGR). Following the resolution, BSGR relinquished its claims on blocks 1 and 2 of the Simandou iron ore project, and both parties have waived all outstanding procedures.
In April 2014, Guinea stripped the rights to mine Zogota as well as the second half of the Simandou deposit from VBG, a joint venture between Brazilian mining major Vale and BSGR, following allegations of fraud in relation to the awarding of that concession.
Vale was cleared of breaking any laws in relation to the deal and transferred its equity interest in the joint venture back to BSGR in March 2015, while BSGR - which has now reached a settlement - vigorously denied any wrongdoing.
BSGR obtained its license to mine and develop half of the Simandou project months after it was stripped from Rio Tinto by the late Lansana Conte, Guinea’s former president.
Niron is currently a non-transaction vehicle but is looking at opportunities in the metals and mining space. Its other shareholders include Varda Shine, former chief executive officer of Diamond Trading Company Limited at De Beers, and Marcos Camhis, founder and CEO of Geneva, Switzerland-based investment firm FOS Asset Management SA.
Davis was previously CEO at X2 Resources, a private mining venture set up in September 2013 after Xstrata merged with Glencore with a view to creating a mid-tier diversified mining and metals group.
The venture eventually restructured after its progress was hindered by a number of factors, including opposition from its cornerstone investors over which assets to acquire, a lack of available purchase opportunities and the withdrawal of funding from heavily-indebted Noble Resources.
Niron Metals PLC, an investment vehicle with shareholders including former Xstrata chief executive officer Mick Davis, is in exploratory talks with the government of Guinea to develop the Zogota iron ore project.