PERTH (miningweekly.com) – Diversified miner South32 has signed an agreement with Canada’s Silver Bull Resources that could result in a $100-million investment in a Mexican zinc project.
The TSX-listed Silver Bull has granted South32 the option to form a 70/30 joint venture (JV) over the Sierra Mojada project. The diversified miner would be given a 70% interest in the project in exchange for a $100-million subscription in Silver Bull subsidiary Metalin, which owns the zinc project.
To maintain the option in good standing, South32 will be required to contribute a minimum of $10-million in exploration funding during a four year period, with a minimum aggregate exploration funding of $3-million, $6-million and $8-million to be made at the end of years one, two and three of the option period, respectively.
Silver Bull president, CEO and director Tim Barry told shareholders that the transaction with South32 validated the company’s significant success in identifying high-grade sulphide zones at Sierra Mojada.
“South32 is a globally diversified metals and mining company that will bring funding and significant technical expertise to the project. We believe this agreement recognises the significant potential at the Sierra Mojada project.”
The project is currently estimated to have a measured and indicated resource of 58.7-million tonnes, grading 3.6% zinc and 50 g/t silver, for 4.67-billion pounds of zinc and 90.8-million ounces of silver.
South32 recently signed a conditional agreement to acquire a 50% interest in the Eagle Downs metallurgical coal project, in Queensland, for an initial $106-million up-front payment. A further $27-million will be payable three years after the transaction, along with a production royalty that will be capped at $80-million.
The company in April also signed an earn-in agreement over the Greater Riqueza multi-metals project, in Peru.