PERTH (miningweekly.com) – ASX-listed Variscan Mines will acquire two advanced zinc projects in Spain.

The Novales-Udias and Guajaraz projects will be acquired from a consortium of vendors, led by Slipstream Resources Investment.

Under the agreement struck with the consortium, Variscan will pay an initial A$2.2-million through the issue of 1.1-billion shares, subject to shareholder approval, while also assuming an obligation to repay a A$600 000 debt.

An additional A$2.2-million payment will be made, through the issue of an additional 1.1-billion shares, on the delineation of a Joint Ore Reserves Committee-compliant resource.

The vendors have agreed to a voluntary escrow of the consideration shares.

Variscan CEO Steward Dickson said on Monday that the board believed this to be a transformative and value accretive acquisition for the company, with the transaction representing a significant opportunity for Variscan to benefit from exposure to advanced projects in an established mining province, in a metal strategic to the company’s existing portfolio and expertise.

“This transaction provides Variscan with a fantastic opportunity to secure what we believe to be one of the most prospective zinc projects in Europe, in a low-cost and stable political environment. Both of the projects are centered around former producing mines in proven mining areas.

“In particular, the Novales project, with its close proximity to the former Reocin mine and the world’s second-largest zinc smelter at Asturias, is especially interesting.”

Dickson noted that with the mining tenements already granted, work would start shortly to evaluate production opportunities at the two projects.

To assist in this, Variscan would raise a minimum of A$3-million through a share placement, with a further A$1-million to be potentially raised through an oversubscription.

The capital raise would be undertaken in two tranches, with the first A$600 000 to be raised through a placement to two sophisticated investors. The second tranche placement would be subject to shareholder approval.