Kombat Copper Inc.
TSX VENTURE : KBT

Kombat Copper Inc.

March 03, 2016 17:00 ET

Kombat Copper Signs Definitive Agreement With EBM Mining Namibia to Commence Operations at Kombat

TORONTO, ONTARIO--(Marketwired - March 3, 2016) - Kombat Copper Inc. (TSX VENTURE:KBT) ("Kombat Copper" or the "Company") has signed a definitive agreement with EBM Mining Namibia (Pty) Ltd. ("EBM") to carry out development and mining of lead/copper mineralization at the Kombat Mine while also commencing the refurbishment of the mine infrastructure and production facilities. Production is expected to commence within the year.

The key terms of the definitive agreement are as follows:

  • EBM will commence operations in the Kombat East and Kombat Central areas of the Kombat mine for a three year term. The Company's core areas of Kombat West, Asis West and Asis Far West are excluded. EBM will also focus on the lead enriched Gross Otavi Deposit located 12 km to the west of Kombat

  • EBM has committed to making an investment to refurbish certain necessary components and infrastructure, which will benefit Kombat Copper in the future. Kombat Copper will have the right to acquire all the installed components and infrastructure at the end of the three year contract for a nominal N$1 and does not have to invest any capital up front.

  • Profits will be split equally between Kombat Copper and EBM. Kombat Copper has agreed to reimburse up to 50% of EBM's capital investment from 50% of its profit share.

  • EBM will pay operating costs directly. To maintain control, Kombat Copper will collect the proceeds from the sale of materials and then pay EBM its contracting fee.

  • Kombat Copper will earn a N$150,000 (CAD$15,000) monthly retainer to cover its monthly Namibian carrying costs. EBM has also agreed to assume security costs for the site.

  • Kombat Copper also has the right to re-start mining in other areas of the mine and use its infrastructure before the three year contract expires.

  • EBM has agreed to manage all environmental compliance associated with re-starting mining operations.

  • EBM will source local skilled and non-skilled labour and will utilize local suppliers and contractors, whenever possible, from the Kombat region. In its role as contractor, EBM will be managing the hiring process to support operations.

The Company anticipates a steady flow of non-dilutive cash flow to become available towards the end of 2016 from the mining operations. The free cash flow will be used to:

  1. Focus on expanding the resource base for the western mine area, outside of the EBM contractual agreement area by funding an exploratory drilling program.

  2. Complete pre-feasibility and other studies as necessary to re-start Kombat Copper's core asset.

  3. Commence consolidation in the district and/or acquire additional land along the Kombat trend.

Paul Bozoki, President and CEO of Kombat Copper, commented: "We are extremely pleased to have finalized this landmark agreement with EBM Mining Namibia. Kombat will now be able to realize on its goal of restarting operations at the Kombat Mine with an experienced and respected contractor. This relationship is expected to not only support the Company with a steady stream of cash, but it is also a great win for the local economy as we anticipate an increase in trade with our local merchants in the town and surrounding areas. Kombat will now be able to focus on our core copper assets for future production sources while also financing the refurbishment of our infrastructure and operations in a non-dilutive way for our shareholders."

Kombat Attending PDAC 2016 at Booth #2221

Kombat Copper will be attending the Prospector and Developers Association of Canada's annual conference for two days on March 6th and 7th. Kombat will be located at booth #2221 and welcomes existing shareholders and interested investors to visit the Kombat Team. For more information on PDAC 2016 please visit their website at www.pdac.ca/convention.

About Kombat Copper

Kombat Copper is a publicly traded Canadian exploration and development company with its core operations focused on copper resources in Namibia, one of the world's most prospective copper regions, where it has substantial assets in place with significant upside. The Company continues to hold an 80% interest in five mining licenses in the Otavi Mountainlands, an area of Namibia particularly known for its high-grade copper deposits. Within these licenses are three past-producing mines including the Company's flagship property, the Kombat Mine.

Kombat Copper has contracted EBM Mining Namibia to begin mining lead/copper mineralization at Kombat East, Kombat Central and potentially Gross Otavi within the year. Concentrates will be produced at the Company's production facilities, which will be refurbished by EBM. EBM will also be evaluating opportunities to market aggregate stone and sand byproducts locally.

Cautionary Notes

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain forward-looking statements. These statements include statements regarding the drill program, possible mineralization and deposits, the anticipated timeline regarding future exploration work, availability of results and production, the Company's expectations regarding mineral resources, EBM's ability to commence operations and operate the applicable portions of the Kombat mine, EBM's ability to make the requisite investments, the Company's expectations regarding the production and sales of mineralization from the Kombat Mine and potential development work and the Company's plans for the Kombat Mine including any financial impact and community impact. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in the management discussion and analysis section of our interim and most recent annual financial statements or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. We do not assume any obligation to update any forward-looking statements, except as required by applicable laws.

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