Graphite focussed-Battery Minerals (ASX: BAT) has inked a binding agreement to sell off the remaining interest in its Kroussou zinc project in Gabon to Trek Metals (ASX: TKM) for US$400,000.
Trek has been in the process of earning a 70% stake in Kroussou since late 2016 and acquired its first 30% interest in September last year after spending US$1 million on exploration and paying US$240,000 to Battery.
Since then, Trek has been in the process of earning a further 40% in the project by spending US$3 million on exploration over two years.
Under this latest agreement, Trek will acquire the entire project and will pay Battery US$400,000 in cash and shares and grant Battery a 2.5% net smelter royalty. As part of the agreement, Trek will also pay a deferred consideration amounting to US$2.5 million once it achieves a 250,000-tonne combined lead and zinc resource for Kroussou.
According to Battery executive chairman David Flanagan, the transaction timing was “perfect” for one ASX listed company to wholly-own the project – particularly while Battery focusses on advancing its two high-grade, low cost graphite Montepuez and Balama projects in Mozambique.
“At the same time, Battery will retain significant upside to the Kroussou project through the mineral resource estimate based deferred consideration and the net smelter royalty,” Mr Flanagan added.
Meanwhile, Trek managing director Bradley Drabsch said the acquisition was a “magnificent” opportunity for the company, especially with the zinc price soaring to “near record levels”.
Kroussou comprises 1,500 square kilometres in tenements with about 84km of strike. Historic drilling of the Dikaki prospect within the product returned 2.3m grading 21.2% zinc and lead from near surface as well as 8.3m grading 7.8% zinc and lead, and 7m grading 8.2% zinc and lead.
Trek’s own drilling program at Dikaki returned much thicker intersections, which were also near surface including 24.7m grading 2.9% zinc equivalent, which includes a 2.8m interval with 20.1% zinc equivalent. Another intersection was 37.1m grading 2% zinc equivalent with a 12.5m interval containing 4% zinc equivalent.
Earlier this week, Trek reported its geophysical exploration program had resumed after stopping for a short period due to wet weather.
To-date the program has identified several anomalies for follow up drilling.
Shares in Trek had slipped almost 3% to A$0.035 by mid-afternoon trade, while Battery’s stock price remained unchanged at A$0.065.