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.
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 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.