Australian exploration and mineral development company Sunstone Metals has signed a letter of intent to divest the Viscaria copper project in northern Sweden to Copperstone Resources.

The sale will be implemented through the sale of Sunstone’s wholly-owned subsidiary Avalon Minerals Viscaria, which is the owner of the copper project.

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“Sunstone is pleased to be partnering with Copperstone with the vision of building a significant copper company in Scandinavia.”

Following the closure of the transaction, which is valued at around A$41m ($30m), Sunstone will become the largest shareholder in Copperstone with a stake of around 30%.

The transaction will be completed in two parts, including a cash payment of around A$6m ($4.3m) and issuance of 160 million Copperstone B-shares worth A$25m ($18m) in the initial stage. A further A$3m in cash and 46 million Copperstone B-shares worth A$7m ($5m) will be payable in the second stage.

Sunstone Metals managing director Malcolm Norris said: “Sunstone is pleased to be partnering with Copperstone with the vision of building a significant copper company in Scandinavia.

“We are excited about the future opportunities generated from this transaction. Sunstone will retain significant exposure to the upside presented from the Viscaria Copper Project, and we look forward to working with the experienced and strong Copperstone team”.

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Through the Copperstone shareholding, Sunstone will continue to hold significant exposure to Viscaria as well as exposure to Copperstone’s existing exploration projects in Sweden.

Copperstone Resources chairman Michael Mattsson said: “Copperstone and Viscaria constitute an excellent strategic fit; Copperstone being the local partner, well placed to bring the project forward and providing the Copperstone large scale potential and its Granliden, Svartliden and Eva assets to be combined with a potential significant copper producer, providing further employment opportunities to Norrbotten, our own region.”

The transaction is slated to be wrapped up in November this year, subject to shareholder and regulatory approvals and completion of due diligence by both companies.