Firetail Resources increases copper exposure with earn-in deal at York Harbour project in Canada

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By Imelda Cotton - 
Firetail Resources ASX FTL York Harbour acquisition Newfoundland Canada

Firetail Resources (ASX: FTL) has signed an earn-in agreement with York Harbour Metals to acquire up to 80% of the historic York Harbour copper project in Canada.

Under the terms of the four-stage deal, Firetail will make an immediate cash consideration of $100,000 and progressive payments upon completion of pre-determined milestones.

Staged commitment

Stage 1 will cost Firetail $200,000 plus 100 million shares to earn a 49% project interest, while Stage 2 will involve a $100,000 payment plus 25 million shares and 5 kilometres of drilling to earn an additional 11%.

Upon completion of Stage 1, Firetail has agreed to grant York Harbour Metals a 2% net smelter returns royalty on all ores, resource estimates and related concentrates or metals containing precious metals, base, industrial and other minerals found on the project acreage.

Stages 3 and 4 will each require a consideration of $100,000 plus 25 million shares and the completion of 7.5km of drilling (for Stage 3) and 10km of drilling (Stage 4) to earn a combined 20% equity.

At the end of Stage 4, York Harbour Metals will retain a 20% free-carried interest in the project until the completion of a pre-feasibility study.

Strategic assets

The York Harbour transaction builds on Firetail’s aim of finding strategic copper assets in world-class locations to complement its existing suite of battery metals projects.

York Harbour is a Cyprus-style volcanogenic massive sulphide exploration project, located 180km from FireFly Metals’ (ASX: FFM) Green Bay copper development in Newfoundland.

The underground mine produced 10,000 tonnes of ore between 1898 and 1913 at grades of up to 12% copper, 7% zinc and 3 ounces per tonne silver.

Limited exploration

Modern exploration has been limited to shallow drilling around historic workings, including the No 4 Pond target.

The work returned “exceptional” copper intercepts with extensive drill data for over 40,000 metres of surface and underground diamond drilling.

Best assays were 29m at 5.25% copper and 9 grams per tonne silver from 147m, including 3.24m at 9.54% copper, 3.5% zinc and 10g/t silver from 167.8m.

Copper exposure

Executive chair Brett Grosvenor said the York Harbour earn-in would broaden Firetail’s copper exposure and complement the early-stage Picha copper project currently being explored in Peru.

“York Harbour presents an advanced brownfield opportunity in a proven district for copper mineralisation,” he said.

“The near-term potential to define a mineral resource and expand the footprint is clear from our due diligence, and our team is very excited to get on the ground and start exploration.”

Capital raising

Firetail has launched a $1.56m share placement and entitlement offer to help advance exploration at York Harbour.

The placement will see the issue of 24 million shares at $0.04 each to sophisticated investors to raise $973,000.

The non-renounceable entitlement offer will issue one share for every ten shares held on the record date by existing eligible shareholders to raise an additional $595,622.

Mr Grosvenor said the proceeds would be used for electromagnetic geophysics work; channel and geochemical sampling; and ground activities including the laying of tracks and pads in preparation for a maiden drilling program at York Harbour.