PERTH (miningweekly.com) – Base metals explorer Syndicated Metals plans to fast-track copper production in Queensland, while consolidating its land-holding in the region.

ASX-listed Syndicated reported on Monday it would sell its 49% interest in the Pelican joint venture (JV) to a subsidiary of fellow-listed Santana Minerals for A$100 000.

The developer would maintain an existing 2% net smelter royalty on all future production from this asset.

The sale of its interest in the Pelican JV also decreased its future expenditure commitment by A$200 000 a year, and reduced its landholding within the Southern Hub project by 229 km².

The company told shareholders that the sale of its holding continued the process of “sensible rationalisation” of its tenement holdings in the Mount Isa-Cloncurry region, and was consistent with its focus on the Northern Hub project, specifically the Barbara project.

Syndicated announced that it had signed two agreements with CopperChem to finalise a JV to explore and develop the Barbara copper/gold project.

As part of the agreement, CopperChem would fund the A$1-million purchase of Orbis Gold’s interest in some of the Barbara tenements, while it would also sole fund and manage a feasibility study through to a decision to mine.

The parties would jointly contribute to exploration within the expanded Barbara project.

In addition, CopperChem has agreed to subscribe to 26.1-million new shares in Syndicated, at an issue price of 2c each, as well as an off-market purchase of a further 12.5-million Syndicated shares currently held by Santana Minerals.

The two equity transactions would result in CopperChem becoming Syndicated’s largest shareholder, with an 18.9% stake in the company.

Furthermore, Syndicated and CopperChem have entered into a development JV agreement for the mining and processing phase of the Barbara project. Under this agreement, CopperChem would process the JV ore through its Cloncurry processing facility under a toll treatment agreement, and would also assist Syndicated to secure financing for its share of the project development costs.

Syndicated MD Andrew Munckton said on Monday that following the transactions, the company would have a dynamic and financially strong copper producer as both its cornerstone investor and JV partner.

“This deal provides a clear and secure pathway to production for the Barbara project in JV with CopperChem, which will contribute processing capacity through their infrastructure at Cloncurry, technical and operational expertise, balance sheet strength and financial capacity.”

He added that the deal gave Syndicated the corporate and financial impetus to build a significant copper business in Queensland, along with the ability to undertake a wide-ranging exploration programme to increase its copper resource inventory and to unlock value for shareholders.

“This is a tremendous outcome for shareholders in what remains a very challenging equity market environment,” Munckton said.

The Barbara project holds an indicated and inferred resource of 5.3-million tonnes grading 1.4% copper, for 74 200 t of contained metal.