Previously known as New World Cobalt, New World Resources (ASX: NWC) emerged from a trading halt today with news it was acquiring the Antler copper project in mining-friendly US jurisdiction of Arizona.
The recently renamed company now has the right to acquire a 100% interest in the project, which hosts the historic Antler mine and previously produced 70,000 tonnes of high-grade ore between 1916 and 1970.
Ore was extracted from surface to a 150m depth and had an average grade of 2.9% copper, 6.9% zine, 1.1% lead, 31 grams per tonne silver and 0.3g/t gold.
A historic resource for the remaining mineralisation exists of 4.66 million tonnes at 1.95% copper, 4.13% zinc, 0.94% lead and 35.9g/t silver.
New World managing director Mike Haynes said the strategic acquisition offered the company an “excellent opportunity” to fast-track the historic Antler deposit back into operation within a “very supportive jurisdiction” and at a time when global markets have a “very positive view on copper”.
“Mineralisation has been mapped at surface over a strike length of 750m, and thick, high-grade mineralisation has been intersected in drilling more than 400m down-dip from the historically mined ore.”
Mr Haynes noted that nothing has been done at the project since 1975 despite exploration delineating “considerable” high-grade mineralisation in the lower levels of the underground workings.
“This provides us a near-term production opportunity. And we expect to be able to delineate additional thick high-grade mineralisation through a concerted drilling program that will be supported by modern geophysics, including ground electromagnetic (EM) surveying.”
New World has secured the right to acquire the project and its related claims from SW Metals Inc via a four-year option agreement.
The company has until 8 March 2020 to undertake due diligence and will make a US$50,000 for this exclusive right.
If due diligence is successful, New World will make a further US$50,000 payment, giving it the right to maintain the option for another 12 months.
Thereafter, New World will be required to pay US$75,000 each year to lock-in the option for each 12-month period.
Additionally, New World will take up the vendor’s payment schedule for the project’s mining claims with the first US$25,000 due by 1 February.
Other payments amounting to US$550,000 are to be made on the 1 August and 1 February in the following years – ending on 1 August 2023, with the final US$100,000 to be handed over on achievement of a measured and indicated resource of 5Mt with minimum grades of 1.9% copper, 6% zine, 1% lead and 1oz/t of silver on the patented claims.
Under the arrangement, New World’s exploration expenditure commitments will include US$500,000 within the first 12 months of the agreement and US$3.5 million in total to be spent on advancing the project within four years.
At any time during the four-year period, New World can exercise its option to acquire 100% of the project by paying SW Metals US$1 million plus commercial production payments.
If New World is satisfied with its due diligence at Antler, then its immediate plan will be to begin a drilling program in March or April.
The company will also commission a ground EM survey to help identify the thicker high-grade zones away from historically mined areas.
New World will also carry out metallurgical testwork on representative core samples.
“Given the project’s location – on private land in a remote region of north-western Arizona – a state, which accounts for 70% of US copper production, the Antler project offers a streamlined permitting framework, which should see us gain rapid access for drilling, which is scheduled to commence later this quarter,” Mr Haynes said.
“We anticipate commencing initial mine design work shortly thereafter,” he added.
This is part of New World’s strategy to fast-track to project into production by developing a low-CAPEX, high-grade operation.
Investors reacted positively to the acquisition, pushing New World’s share price up more than 14% to $0.016 by mid-afternoon trade.