PERTH (miningweekly.com) – Minerals developer Plymouth Minerals has moved to acquire an 80% shareholding in the Morille tungsten/tin project, in Spain.

Under the terms of the transaction, Plymouth would acquire all the issued shares of junior Castilla Mining for €300 000 in cash and shares, paid over a 12-month period.

The remaining 20% shareholding in the project would be held by Aurum Mining, and would be free-carried until a decision to mine was reached, at which time Aurum could elect to contribute prorata in the funding and development, or dilute to a 0.5% net smelter royalty.

Plymouth further had the right to purchase Aurum’s stake in the project for £2.5-million in cash, at any time prior to a decision to mine.

“The Morille project brings together the speciality metal and development skills of the Plymouth board and management, and combines them with an advanced tungsten project in a tungsten-producing region,” said Plymouth director Adrian Byass.

The Morille project is a brownfield exploration and development opportunity located in the Salamanca province, and Byass said that the project was an "excellent" opportunity for Plymouth, as previous production results indicated that the project produced a sought-after, high-quality tungsten concentrate until a low tungsten price forced it to close in 1985.

“The tungsten price is robust with strong fundamentals going forward. This acquisition complements other projects currently under review by Plymouth in the region and is further evidence of the company’s growing regional focus on the Iberian peninsula,” Byass said.

He added that the Morille acquisition had the potential to deliver a solid tungsten project in a mining-friendly district.

The junior would continue the exploration work lodged by Aurum, which would involve trenching, drilling and preliminary metallurgical testwork.

An initial phase of shallow drilling was planned for late 2013 or early 2014, targeting mineralisation that was proposed to be mined at the mine prior to its closure.