Cash-strapped Black Mountain, which in February announced its plan to sell its Namekara vermiculite mine in Uganda after just two years to refocus on phosphate and copper exploration, has taken a sudden swerve into the battery minerals space, entering into due diligence on two lithium projects.

 

Black Mountain shares jumped from A2c to 5.6c and KPC shares jumped 1c to 4.2c, a 200% gain over its six-month average in just the last two weeks, with day-traders seemingly unconcerned about recent changes to the mining legislation in the politically volatile nation that have vexed majors such as AngloGold Ashanti and Ivanhoe Mines.

 

The Michael Fotios-backed Black Mountain has an exclusive 90-day option to run the ruler over rights to earn 60% in three permits in the Manono lithium province from Crown Mining and a 45-day option to potentially earn a 75% interest in two additional licences in the region from Cooperative Miniere de Development de Dikuluwe.

 

The company, which is trying to deal with a debt problem, has raised a further $500,000 via a convertible note to fund the due diligence costs. 

 

Black Mountain stressed the new projects are about 40km south of AVZ's Manono project, and adjacent to Force Commodities' holdings in the area, and share the geological and structural setting as Manono - potentially one of the largest lithium-caesium-tantalum pegmatite deposits in the world.

 

It says its areas appear to have evidence of pegmatites up to 250m in places.

 

Specific farm-in terms are still to be negotiated. 

 

Additionally, the company is continuing to progress exploration planning for the Bukusu phosphate and Ngala Hills copper prospect in Uganda, potentially bringing in partner to help fund the work. 

 

KPC, which moved into the DRC late last month, has signed a memorandum of understanding with local firm Mining Mineral Resources to acquire a net 31.5% interest in the Malemba lithium project, which covers some 730sq.km about 90km west of AVZ, where pegmatites are mapped along a 40km trend.

 

It stands to gain all offtake rights for the minerals within the licenses, except tin and coltan, by spending US$4 million over two years and any feasibility studies if the deal is finalised.

 

The company said the new area could complement its deal with MCC Resource to earn 60% of an 88sq.km area just north of AVZ's Manono by paying $1 million and issuing 100 million shares priced at A6c.

 

KPC, which started 2018 with less than $650,000 cash, will also fund all exploration.

 

The Congolese scramble comes just weeks after the DRC government recently revised the mining code to capture more revenue for the state, in moves described as "punitive" by major miners.

 

DRC president Joseph Kabila, who has created instability by trying to amend the constitution to remove term limits, signed the new code into law early last month, affecting every project in the African country.

 

The rules remove a stability clause that has been protecting miners from changes to the fiscal and customs regime for 10 years and raising royalties and taxes. 

 

Speaking as a group, international miners last week accepted about 75% of the changes, but suggested linking a sliding scale of royalty rates to the prices of key DRC mineral commodities as being more effective than the new windfall tax. 

 

Congo is the world's biggest source of cobalt and a major copper producer, and is emerging as a major player in hard rock lithium markets.

 

Black Mountain is currently capitalised at some $9 million while KPC was valued at almost $48 million.