An agreement between AU Capital Mining and Iron Mountain Mining was done outside the government’s normal process, without the input from the Ministry of Mines.
Both are Australian companies and are eying bauxite prospecting at Nende, Temotu.
A reliable source told the Sunday Star the Mines ministry does not recognise the agreement because it was done without the ministry’s knowledge.
The source said the recent announcement through the media has nothing to do with the Ministry.
Currently, it is AU Capital that holds the two tenements and the ministry knows nothing of any transfers of the tenements to Iron Mountain Mining as reported, the source said.
Iron Mountain Mining claimed under the terms of the agreement, it would pay a nonrefundable option fee of AUD$100, 000, and if the company elected to proceed with the transaction, Iron Mountain would issue 20-million of its own shares to Au Capital Mining.
The company said it had signed an option agreement to acquire a 50 percent stake in privately-held AU Capital Mining, which held two prospecting licences in the Solomon Islands.
A further 20-million fully paid shares would be issued to Au Capital Mining on either the first commercial bauxite shipment, or within 12 months of completion of the transaction.
AU Capital Mining tenements include the Nendo project and the Choiseul project.
Iron Mountain Managing Director Robert Sebek, when announcing the takeover,said the projects provided the company with the opportunity to explore for, and potentially develop a low-cost mining operation in a region beneficially situated close to end-users in Asia.
“Our dealings with the people of Nende and officials in Honiara have so far been extremely encouraging and initial support for proposed exploration and subsequent mining operations in this region have been overwhelming.
“The Solomon Islands are ideally located close to Asian markets and potentially offer low-cost development of new discoveries,” Sebek added.
By BRADFORD THEONOMI