Besieged Africa-focused miner Sierra Rutile Ltd (ASX:SRX) – which two months ago rejected an attempted takeover by investment firm PRM Services LLC – has agreed to return to work at its Area 1 operation by the end of May, following a notice sent by the Sierra Leone government.
On Wednesday, the company informed the Australian Stock Market of its intention to begin operations again at Area 1, referencing the government notice which had accused its subsidiary Sierra Rutile Limited of breaching the 2023 Mines and Minerals Development Act.
However, Sierra Rutile stated that it ‘does not agree that it has committed the breach alleged by the GoSL (Government of Sierra Leone) in the notice’, which was itself received on Monday.
The return to operations would include Sierra Rutile Ltd securing a source of additional power generation for Area 1 – through contract negotiations – so that the existing powerhouse can be retired.
The tensions between Sierra Rutile Ltd and the government stem from negotiations around what fiscal regime will apply for the remaining production from Area 1’s operations, in particular referring to the Third Amendment Agreement.
The restart announced on Wednesday assumes that this Agreement will continue to apply to production from the existing Area 1 operations.
The Area 1 mineral resources stand at 142 million tonnes at 0.97 percent for 1.37 million tonnes of contained rutile.
Sierra Rutile Holdings has been trading at 13c, a rise of 8.33 percent since the market opened.