|Brazil Minerals, Inc. has announced that it has received title to 25 percent of RST Recursos Minerais, Ltda. (RST), a Brazilian company with 10 mining concessions and 12 other minerals rights, all for diamond and gold. The concessions are near the mining concession owned by the Company's subsidiary, Mineração Duas Barras Ltda. (MDB).
BMIX paid a total of 250,000 Brazilian real (approximately US$110,000 at the then prevailing exchange rate, or US$87,000 at today's rate) for this 25 percent acquisition of RST shares (60 percent in cash and 40 percent in restricted stock of the company).
The sellers of the 25 percent stake in RST were two Brazilian citizens.
Marc Fogassa, Chairman and CEO of Brazil Minerals, commented, "The mild slowdown in the Brazilian economy has made certain local property owners need to raise cash, and that has created several likely accretive opportunities for us, as in this acquisition."
RST mining concessions and minerals rights are located on the banks of the Jequitinhonha River, a well-known alluvial diamond and gold area for the last two centuries, near MDB's areas and plant. RST has no operational plant or workers at this time, and any eventual mining in an RST area could possibly be processed at MDB's plant.
The company believes that its shareholders will benefit from this transaction as Brazil Minerals now has participation in 11 mining concessions, whereas before it had only one from MDB. Mining concessions are the highest level of mineral rights in Brazil. They permit the owner to mine and commercialize specified minerals in perpetuity, as long as continuous observance of the mining code is followed. The cost of obtaining a mining concession from scratch can reach hundreds of thousands of dollars and take in excess of five years.