based Alara Resources Tuesday announced that it would buy a 50 percent interest in the Khnaiguiyah zinc and copper project, and the adjacent Mutiyah and Umm Hijja projects, in Saudi Arabia. Alara would pay United Arabian Mining (Manajem) $266,000 within five days of the execution of the agreement, and a further $7.2-million upon the achievement of certain milestones. The first $1.25-million would be payable upon the formation of a joint-venture (JV) company and the execution of a more definitive JV agreement. A further $1.75-million would be payable during November, or when Manajem was granted a mining lincense for the project. The outstanding $4.2-million would be payable in January next year, or when the JV company was granted an environmental permit for the start of mining at Khnaiguiyah. Alara said on Tuesday that a resource bonus was also payable, calculated at the rate of $0,005 per pound of contained zinc equivalent delineated at the project, in excess of 11-million tons. Alara would further fund all exploration, evaluation and developments costs in relation to the project, up to the completion of a bankable or definitive feasibility study (DFS). Thereafter, the parties would continue to all cash calls in proportion to their respective participating interests in the JV.
