Rubix targets untapped bauxite mines in Central Africa

Rubix Resources has recently signed a non-binding agreement with Nyos Metals and Yoro Metals to leverage the bauxite projects of Cameroon and the Republic of Congo. This is quite a major step, especially when Rubix is all set to expand its portfolio in untapped bauxite mines across Central Africa.

A deep dive into the projects

The deal involves two licence applications – one in Cameroon and the other involving six contiguous concessions in Congo. Practically, this is going to encompass about 3000 square kilometres of bauxite mines. Sources said these two regions are highly prospective but have been unexplored so far, especially due to no improvement in terms of exploration work post-1960s.

In this context, Rubix certainly wins a significant first-mover advantage, thus offering the company an advantage to segregate resources in places that might hold long-term strategic importance.

Under the staged acquisition terms, Rubix will:

• Pay USD 500,000 in cash on signing a formal agreement.
• Issue up to 20 million performance rights, linked to defined exploration and economic milestones.
• Provide an additional USD 500,000 in cash and shares upon the granting of licences.
• Follow with USD 200,000 cash and shares six months after approvals are secured.

However, the key concern here is that the above-mentioned performance rights will only convert to shares if the economic milestones are met perfectly. It needs to be a disciplined investment and aligned well with the shareholder’s value.

Bauxite push diversifies Rubix’s grip on aluminium supply chain

Moving its focus to bauxite gives Rubix another edge to diversify its portfolio beyond base metals and gold exploration. According to the company insiders, “this potential acquisition would provide a significant growth platform” and help Rubix to step into high-demand sectors across the world.

Industry analysts note that Africa hosts some of the world’s largest undeveloped bauxite resources, yet exploration activity has been limited to only established bauxite hubs such as Guinea. This gives early movers like Rubix the chance to secure ground in prospective areas ahead of larger competitors.

What lies ahead… 

If the acquisition is successful, in the coming years, this would sanction Rubix’s rightful entry into Central Africa. While it’s going to increase its geographical footprint, this is surely going to deliver long-term value creation for investors, as well.

However, with some approvals pending, Rubix can still hope to start off later this year.