Daewoo Minerals Canada (DMC) has exercised its right to earn an additional 30% interest in Serengeti Resources’ Kwanika Copper Gold project in Canada.
The move will bring DMC’s aggregate interest to 35% in the project, which is in the Quesnel Trough of north-central British Columbia.
The increase in stake is subject to finalising and executing the full joint venture (JV) agreement in relation to the project.
Serengeti Resources president and CEO David Moore said: “POSCO Daewoo’s commitment provides financial stability and I believe significant value to both the Kwanika project and Serengeti as a company.
“Today’s announcement provides a clear path forward that will begin with the initiation of a pre-feasibility in the short-term.”
The parties will form a JV company over the next two months, in addition to finalising the JV agreement.
Towards advancing the Kwanika property, DMC will pitch in with its current 5% interest, as well as $7m in cash, while Serengeti will offer an additional 30% interest to the new JV company.
Alongside the completion of pre-feasibility study (PFS), the companies will contribute funding towards a drilling programme set to start in September.
Once the deal is complete, Serengeti will continue as project operator, with the right to charge a 10% operator’s fee on expenditures.
Under the findings of a preliminary economic assessment, the project was found to have pre-tax and post-tax net present value (NPV) at 7% of C$324m ($259.23) and C$191.2m ($152.97) respectively, with a 21.1% and 16.6% internal rate of return (IRR) and a mine-life of 15 years.