Diversified mineral explorer Jadar Resources (ASX: JDR) has inked a deal to purchase a silver mine and five exploration tenements in the Southern Queensland Granite Belt from liquidating junior miner Moreton Resources (ASX: MRV).
Jadar today announced a binding term sheet with embattled Moreton, which entered voluntary administration in June, to acquire the tenement portfolio for a cash consideration totalling $500,000.
The assets include the Twin Hills silver mine and associated in-situ crushing, screening, stacking, treatment and refining facilities located in Queensland’s highly prospective Silver Spur Basin.
The operations have been on care and maintenance since late 2019 due to funding and production difficulties largely stemming from water quality issues.
Jadar chairman Luke Martino regarded the acquisition as a “major development” for the company and a strategic fit for its business model.
“Given the economic cycle and the demand for silver and other metals, these projects have the potential to deliver enormous value to the company as we apply our expertise and funding,” he said.
A non-refundable deposit of $120,000 is payable within three days of execution of the term sheet.
Jadar is currently carrying out due diligence, which is expected to be completed “in the coming month”.
Completion of the transaction remains subject to Jadar obtaining all third party, regulatory and shareholder approvals, and meeting ASX requirements.
Granite Belt portfolio
The assets are located about three hours south-west of Brisbane, about 7km east of the rural town of Texas, and comprise five exploration permits and one mining lease.
The tenements were previously owned by Moreton subsidiary MRV Metals and prior to that, the now-delisted Alcyone Resources, which originally commenced silver production on the site in 2011.
Mining ceased in 2014 then MRV started heap leach silver operations in 2016 before operations were suspended late last year.
From July to December 2019, Moreton recorded selling 32,582 troy ounces of silver from the project.
In addition to the mine, the 190sq km project contains advanced silver and polymetallic base metal exploration targets including the Mount Gunyan, Hawker, Harrier and Hornet deposits but only minimal exploration has been completed.
However, historical exploration has shown indications of high-grade silver and copper, as well as zinc and lead, with walk up targets ready for testing.
Through the proposed acquisition, Jadar will also obtain an extensive historical drill data and associated analysis data package covering the large prospective project area.