White Rock Minerals has entered a subscription agreement with Australian copper producer Sandfire Resources to formalise a strategic relationship over its high-grade zinc volcanogenic massive sulphide (VMS) Red Mountain Project in Alaska, US.
The deal will allow White Rock to leverage Sandfire’s technical expertise and strategic support to develop the Red Mountain project.
Under the terms of the subscription agreement, A$2.5m ($1.86m) equity placement will be conducted following which Sandfire will have around 14.2% ownership in White Rock.
According to White Rock, the proceeds from the placement will be mainly used to advance exploration activities at the Red Mountain project, while a portion of the funds will be allocated for general working capital purposes.
The companies will set up a technical committee to jointly collaborate on identifying best options for advancement of the project.
The agreement also grants an exclusive option to Sandfire to sign an earn-in joint venture deal over the project.
Initially, Sandfire can earn 51% interest in the project by investing an aggregate amount of A$20m ($14.91m) over a period of four years and then increase the stake to 70% by funding a further A$10m ($7.45m) and delivering a pre-feasibility study.
In case White Rock chooses not to invest in the joint venture, Sandfire can solely fund a definitive feasibility study to earn up to 90% interest in the project.
White Rock Minerals managing director and CEO Matt Gill said: “White Rock welcomes Sandfire as a strategic partner and cornerstone investor that shares White Rock’s vision for the exploration and development of the Red Mountain project.
“Securing a high-quality partner with world-leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of White Rock’s globally significant high-grade zinc VMS Red Mountain project.”
Located 100km south of Fairbanks in the Bonnifield Mining District, the project consists of 224 mining claims over a total area of 143km².
The inferred mineral resource for the project includes 678,000t of zinc, 286,000t lead, 53.5 million ounces of silver and 352,000 ounces of gold.