26th May 2016 09:20
LONDON (Alliance News) - Strategic Minerals PLC Thursday said it has agreed a deal to buy up to a 50% stake in NAE Resources UK Ltd, or Redmoor, a subsidiary of Australia-listed New Age Exploration Ltd.
Redmoor holds an exploration licence and option of 23 kilometres in the Cornish tin-tungsten-copper mining district in the UK for a period of 15 years.
Last December Redmoor, with SRK Consulting UK Ltd, undertook a detailed review of historical drilling, mining and geological data of the area.
This resulted in an updated mineral resource, as defined by Joint Ore Reserves Committee code, of 13.3 million tonnes at 0.37 tungsten equivalent. It also identified an additional high grade exploration target of 4 million to 6 million tonnes of between 0.6% to 1.0% tungsten trioxide equivalent.
This exploration target is conceptual in nature, and has had insufficient exploration to define a mineral resource, Strategic Minerals noted.
An initial drilling programme has been planned, primarily aimed at converting the exploration target to an inferred resource, and upgrading a portion of the resource from an inferred to an indicated mineral resource status.
Strategic Minerals will buy 30,973 shares, equivalent to an around 9% stake, at a price of 339 pence per share, or a total of GBP104,998. This will be split into two tranches, the first of 22,124 shares for a total of GBP75,000, and the second of 8,849 shares in Redmoor for GBP29,998.
Under the agreement Strategic Minerals has an option to buy an additional 278,864 new ordinary shares in Redmoor for a total consideration of GBP945,349 in cash.
"As part of our strategy to add value through exploration in metals expected to have good price upside potential in the next three to five years, the company has identified the Redmoor tin/tungsten project as fitting our strategy and has been able to negotiate a structured farm in approach that satisfies all parties," said Managing Director John Peters in a statement.
Shares in Strategic Minerals were up 8.2% at 0.330 pence Thursday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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