PERTH (miningweekly.com) – Australia-listed copper miner Sandfire Resources has struck a deal with fellow listed White Rock Minerals to form a strategic relationship in relation to White Rocks’ Red Mountain zinc project, in Alaska.
Sandfire will subscribe for A$2.5-million shares in White Rock, and will be issued more than 208.3-million fully paid ordinary shares, as well as 104.1-million unlisted options. The options will have an exercise price of 2c each and will expire within three years of the date of the agreement.
Following the share placement, Sandfire will hold a 14.2% interest in White Rock.
In addition to the share subscription, the two companies will also form a technical committee to collaborate on the Red Mountain project, including identifying the best options to advance the project.
Sandfire will also have the right to enter into an earn-in joint venture (JV) agreement over Red Mountain.
Under the Stage 1 earn-in, Sandfire will fund a total of A$20-million over a four-year period to earn an initial 51% interest in Red Mountain, with a minimum expenditure of A$6-million required in the first year.
Stage 2 will see Sandfire fund a further A$10-million and deliver a prefeasibility study over an additional two-year period, to earn a 70% interest in the project.
In Stage 3, White Rock could elect to contribute to the JV, but if Sandfire was to sole-fund Stage 3, it would earn an 80% interest in the project by completing a definitive feasibility study.
In Stage 4, White Rock could either elect to contribute funding to the JV, or Sandfire could earn a 90% stake in the project, with White Rock’s 10% interest to be earned from project cash flow.
White Rock MD and CEO Matt Gill said on Tuesday that Sandfire shared the company’s vision for exploration and development of the Red Mountain project.
“Securing a high-quality partner with world leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of White Rock’s globally significant high-grade zinc VMS Red Mountain project.”