MetalsTech shoulders into gold space with Sturec acquisition
MetalsTech has an option to acquire Sturec which has a historic reserve of 873,000oz gold.
MetalsTech (ASX: MTC) is the latest battery mineral explorer to jump on the gold bandwagon after announcing this morning it had entered an option to acquire 100% of the advanced Sturec project in Slovakia.
According to MetalsTech, Sturec is an advanced gold asset with a pre-feasibility study completed on it in 2013.
The asset hosts a 2004 JORC measured and indicated resource of 1.01 million ounces of contained gold with an average grade of 2.05 grams per tonne.
It also includes a historic inferred resource of 9.7Mt at 0.99g/t gold for 310,000oz and a 2004 reserve of 13.965Mt at 1.90g/t gold for 873,000oz.
Historic production at the mine has comprised more than 1.5Moz gold and 6.7Moz silver over hundreds of years.
“Assuming we are satisfied with our due diligence, Sturec has the potential to deliver strong shareholder value given the current outlook for the gold sector and the advanced nature of the asset,” MetalsTech chairman Russell Moran said.
He said a $1.75 million refund from the Canadian Government plus a further $200,000 would help fund the transaction and initial activities.
Additionally, Mr Moran said the company had received more interest in its Canadian lithium projects which could potentially produce further cash inflows from partnership agreements.
Acquisition terms
Under the option agreement, MetalsTech has 45 days to carry out due diligence on the asset and confirmed a “significant amount” of desktop evaluation had already been completed.
If MetalsTech elects to proceed with the acquisition, it will issue the project’s vendors $450,000 in cash plus a further $300,000 in cash in six months.
The vendors will receive resource upgrade royalty of A$2/oz above a measured and indicated estimate of 1.5Moz with a grade higher than 2.5g/t gold equivalent.
This royalty is payable between two-to-five years after the agreement has been executed and capped at a 7Moz resource.
Sturec gold project
Sturec is located in central Slovakia and comprises an 11.8 square kilometre mining licence and a 6.1sq km exploration licence.
MetalsTech noted the project has access to paved roads and a network of old mining and forestry tracks.
Additionally, high voltage power lines pass through the mining licence enabling connection to the main grid.
Sturec has been mined for gold since the 8th century with production mostly coming from underground workings and a few small open pits.
Due to a 2014 cyanide ban in Slovakia, MetalsTech claims the previous owners were hampered from developing the project further.
However, since then, MetalsTech said there have been “significant developments” in using non-cyanide processing technology that is also cost-competitive.
MetalsTech plans to investigate alternative processing options for the asset in an updated pre-feasibility study.
Investors reacted optimistically to the news, spurring MetalsTech’s share price up over 607% to hover at $0.099 by mid-afternoon.