Argent Minerals (ASX: ARD) is set to earn up to 90% of a “significant” historic gold, silver, zinc and copper tenement after inking a joint venture agreement over the Sunny Corner exploration licence in New South Wales’ Lachlan Fold Belt.
The licence is close to tenements owned by major explorers Freeport-McMoRan and Alkane Resources (ASX: ALK).
Last year, Argent had sold the licence to Sunshine Reclamation for it to undertake rehabilitation activities where historic mining had taken place at the licence.
However, with the licence remaining highly prospective for economic mineralisation, both companies have agreed to a joint venture to continue rehabilitation activities while also unlocking potential discoveries.
“The Argent board is pleased that a win-win position was agreed by Sunshine and Argent, which allows the derelict Sunny Corner mine to be rehabilitated while co-existing with exploration over one of Australia’s oldest direct shipping mining localities at Sunny Corner silver mine,” Argent managing director and chief executive officer George Karageorge said.
“This is also a great outcome for the NSW Government, Sunshine and Argent shareholders in cleaning up the old Sunny Corner mine site and allowing exploration over the larger tenement area,” Mr Karageorge added.
Sunshine director Matthew Huggan said his company’s primary business was mine site reclamation and rehabilitation. However, he noted the company considers the tenement are to be “highly prospective” for “significant base and precious metals discoveries” that are supported by historical records.
“Sunshine has been looking for an appropriate partner to properly explore the opportunities within the exploration licence,” Mr Huggan explained.
“Argent’s expertise and track record make it the logical choice to partner with Sunshine on this and other exploration opportunities in the future,” he added.
Sunny Corner joint venture terms
Under the agreement with Sunshine, Argent will explore areas of the licence not requiring environmental rehabilitation.
As part of the deal, Argent will spend $1.5 million on exploring these areas over three years to secure 90% ownership.
Sunshine will have a 10% free-carried interest in the tenement and receive a $110,000 option fee.
Additionally, a $400,000 sum that Sunshine owed to Argent will be cancelled under a previous Sunny Corner sale agreement dating back to September 2019.
The new joint venture agreement will also allow Argent to explore in Sunshine’s rehabilitation area after paying a $25,000 access fee. Sunshine will receive a 40% free-carried interest in the area.
Sunshine will also have the right to place a tailings storage facility or processing plant on the licence to support its ongoing reclamation activities.