PERTH (miningweekly.com) – Junior Zenith Minerals has struck a deal with fellow-listed QMines to divest of its Develin Creek copper/zinc project, in Queensland, for up to A$4.5-million in cash and shares.
"We are pleased to advise of the divestment of the Develin Creek copper/zinc project to QMines. The divestment provides Zenith with immediate cash but more importantly allows us to continue our focus on our lithium assets,” said Zenith executive chairperson David Ledger.
“This has been a deliberate reallocation of our resources where we believe we can maximise value for our shareholders. We will continue to review the asset base and monetise projects at the appropriate times.”
Under the terms of the agreement, Zenith will receive an up-front payment of A$1.2-million in cash and A$1-million worth of QMines shares, for a 51% interest. Within 12 months, QMines must complete 500 m of diamond drilling and a detailed metallurgical study on the existing inferred mineral resource at Develin Creek.
At 12 months, QMines must also pay a further A$1.3-million in cash and issue a further A$1-million worth of shares for an additional 49% interest. The second tranche payment could be adjusted down if the zinc concentrate grades are below 50%, or a 50% zinc concentrate is not commercially achievable.
“Since listing in only May 2021, the QMines team has rapidly grown its copper resources at the Mt Chalmers project. We always believed that the Develin Creek asset was very complementary and would provide the scale required to progress the Mt Chalmers project towards sustainable copper production,” said QMines MD Andrew Sparke.
The Develin Creek project will be incorporated into the Mt Chalmers prefeasibility study, which is expected in the first half of 2024.
Meanwhile, QMines has announced a A$3-million capital raise, having received firm commitments for the placement of more than 27.27-million shares at a price of 11c each.
Capital raised from the placement will be used to fund the initial acquisition of Develin Creek, as well as the exploration at both Mt Chalmers and Develin Creek.