White Rock Minerals and Sandfire Resources have signed a A$30m ($21.2m) earn-in and joint venture (JV) option agreement to explore and develop the Red Mountain zinc-silver-lead-gold-copper project in central Alaska, US.

The Red Mountain tenement package comprises 760 mining claims over a total area of 475km².

Under the terms of the agreement, White Rock will permit Sandfire to farm-in to its interests in the Red Mountain project including high-grade zinc-rich VMS mineralisation at the Dry Creek and West Tundra deposits and the newly discovered Hunter prospect.

Sandfire needs to spend A$20m ($14.1m) on exploration over four years to earn up to 51% of White Rock’s interest in Red Mountain as part of stage one.

The company can opt to increase its interest in the project to 70% by sole-funding a further A$10m ($7.07m) and delivering a pre-feasibility study with an ore reserve within a further two years.

In order to retain its 30% interest, White Rock can then elect to contribute its percentage share of expenditure.

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By GlobalData

White Rock Minerals managing director and CEO Matt Gill said: “The prospectivity of the Red Mountain project was well illustrated by last year’s field season activities that included drill hole results returning in excess of 17% zinc, 6% lead, 1,000 g/t silver, 6 g/t gold and 1.5% copper and the discovery of new massive sulphide mineralisation at the Hunter prospect.

“The prospectivity of the Red Mountain project was well illustrated by last year’s field season activities.”

“The 2019 field season promises more exciting results with plans for a modern airborne EM survey, ahead of a 24-man field camp being established with surface crews completing mapping, geochem sampling, CSAMT geophysics and drilling.”

A US organised limited liability company (LLC) will operate the JV.

Sandfire’s wholly-owned subsidiary will initially hold a 15% membership interest in the LLC in exchange for the commitment to provide the minimum contribution of about A$6m ($4.24m).

A wholly-owned subsidiary of White Rock will hold the remaining 85% interest.