Inca Minerals (ASX: ICG) has executed an agreement with BHP Billiton (ASX: BHP) spin-off South32 (ASX: S32) that allows South32 to earn an initial 60% interest in Inca’s Greater Riqueza zinc, silver and lead project in Peru.
The exclusive option agreement allows South32 to secure a 60% in Riqueza project by funding a work program under phase one.
Phase one exploration will involve South 32 spending US$275,000 on geophysical work across Riqueza including aeromagnetic, radiometric and digital terrain model surveys. The work will also incorporate interpretation and generation of targets.
By undertaking this work, Inca affords South32 an exclusive option to secure a majority stake in Riqueza and the ability to match another other offer to farm-in from an outside party.
Through phase two, South32 will be able to collar a further 10% interest in Riqueza by funding a pre-feasibility study.
At this stage, Inca will remain the project operator unless South32 elects to become operator after completing phase one exploration.
“South32 is a globally recognised sector leader,” Inca managing director Ross Brown said, adding, “We’ve found working with them to date to be extremely productive and I hope and expect they will become a highly valued partner with a big-end-of-town commitment and energy to Riqueza.”
A first phase drilling program at Riqueza was completed during the December quarter last year as well as trenching.
Drill holes intersected many high-grade zinc mineralised zones exceeding 10% zinc across the Humaspunco and Humaspunco South deposits with notable intersections if 0.3m grading 20.77% zinc, 95.7 grams per tonne silver, 6.73% zinc, 1.5m grading 7.40% zinc, 99.1g/t silver and 1.44% lead, and 3m grading 4.31% zinc, 81.2g/t silver and 1.21% lead.
In late February, channel samples from the recently identified Rastrillo deposit returned up to 13.38% zinc, 350 grams per tonne silver and 16.93% lead.
Inca has firmed up multiple targets across the project including Colina Roja, Pampa Corral, Alteration Ridge in addition to those already explored.
Inca’s share price had shot up 20% at A$0.006 by midday on today’s news.