White Rock Minerals inks JV with Sandfire Resources to advance Red Mountain
Sandfire Resources is set to spend a minimum $6 million in exploration work at the Red Mountain project this year.
White Rock Minerals (ASX: WRM) has teamed up with gold-copper miner Sandfire Resources (ASX: SFR) under a joint venture agreement to fund the exploration of new high-grade zinc and precious metals volcanogenic massive sulphide (VMS) deposits in central Alaska.
Under the $30 million earn-in and joint venture option agreement, White Rock has given Sandfire the greenlight to farm-in to its interests in the Red Mountain project, including high grade zinc-rich VMS mineralisation at the Dry Creek and West Tundra deposits and the newly discovered Hunter prospect.
The Red Mountain project in central Alaska encompasses a 475 square kilometre tenement package covering numerous historic VMS prospects with little modern exploration, providing Sandfire and White Rock with a large strategic footprint over a potential new VMS district.
There are already two high-grade deposits at Red Mountain with an inferred resource of 9.1 million tonnes at 12.9% zinc equivalent for 1.1Mt of contained zinc equivalent.
Commenting on the agreement, White Rock chief executive and managing director Matt Gill welcomed its new Alaskan joint venture partner.
“Securing a high-quality partner with world leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of our globally significant high-grade zinc VMS Red Mountain project,” he said.
Sandfire, which operates the DeGrussa gold-copper mine near Meekatharra in Western Australia, has an established exploration portfolio overseas which includes the Black Butte copper project in Montana, US.
JV terms
Under the deal with White Rock, Sandfire’s JV funding obligations will be structured across four stages and include an option to spend a minimum of $20 million over four years to give it a 51% interest in the Red Mountain project.
As part of stage one, a minimum of $6 million will need to be spent on the asset in 2019, enabling Sandfire to then elect to increase its interest in Red Mountain to 70% by sole-funding a further $10 million and by delivering a pre-feasibility study with an ore reserve within a further two years.
White Rock can then elect to contribute its percentage share of expenditure to retain its 30% interest.
Mr Gill said it was particularly significant for White Rock shareholders that the JV terms provided a funding pathway to advance the Red Mountain project through exploration to the point of advanced development studies.
“It also allows White Rock to retain a 30% interest in any project development at the point when the economics of a project are well defined by a pre-feasibility study,” Gill added.
Upcoming work
The prospectivity of Red Mountain was well illustrated by encouraging field work last year that included drill hole results returning in excess of 17% zinc, 6% lead, 1,000 grams per tonnes silver, 6g/t gold and 1.5% copper.
White Rock said the upcoming field season promised “more exciting results” with plans underway for a modern airborne EM survey.
This will take place ahead of a 24-man field camp being established with surface crews completing mapping, geochem sampling, CSAMT geophysics, and drilling.
“We look forward to working with our strategic partner Sandfire and progressing this highly prospective project with the commencement of this program and the subsequent news flow that will result,” Mr Gill said.
White Rock shares jumped 20% to $0.006 at market opening.