Zenith Minerals reports expansion of Earaheedy zinc, sells scandium rights to American Rare Earths
Drilling will focus on the zinc-lead strike potential at Chinook and Magazine prospects.
Diversified explorer Zenith Minerals (ASX: ZNC) has reported two advances — one, the 150km expansion of its Earaheedy zinc project, the other a cash and shares deal to sell scandium and other rights at its advanced Split Rocks gold project.
In the first development, Zenith will expand its wholly-owned part of the Earaheedy zinc project, which is outside the adjoining joint venture with Rumble Resources (ASX:RTR).
In the latter, Zenith will receive a stake in American Rare Earths (ASX: ARR) by selling scandium, nickel and cobalt rights at Split Rocks.
Both projects are in Western Australia.
At Earaheedy, Zenith has now secured seven 100%-owned exploration licences totalling 150 linear kilometres of what the company says is a prospective zinc-hosting sequence within the Earaheedy Basin.
This ground surrounds the joint project with Rumble.
New ground selected based on exploration work
Zenith says the new ground was selected based on previous exploration by it looking for both zinc and manganese.
It also follows work at the joint venture ground with Rumble, 110km north of Wiluna, where exploration is targeting between 40 million tonnes and 100Mt of resource, and there is 40km of completely open prospective strike.
Apart from a 25% in the joint venture, Zenith also holds about 3 million Rumble Resources shares, those acquired as part of the initial joint venture deal.
Both parties hold a pre-emptive right over the counterparty’s respective equity stakes.
In respect of today’s announcement, chairman Peter Bird said Zenith has a long history of exploration activity in the Earaheedy Basin and used prior experience to select the newly acquired ground.
Scandium deal follows Zenith discovery
In a separate announcement, American Rare Earths has acquired the scandium rights to Zenith’s Split Rocks gold project.
The Split Rocks project is located south of Southern Cross in WA and lies to the south of the Marvel Loch 3 million ounce mine and the Yilgarn Star deposit (2Moz) and north of the 2Moz Bounty gold deposit.
In 2018, Zenith announced to the ASX that it had identified the presence of elevated scandium at shallow levels based on drilling encompassing an area approximately 3km by 1km.
Sydney-based American Rare Earths, which is focused on rare earths and scandium exploration in the US, has diversified into Australia with the Zenith deal.
Zenith has the potential to earn $150,000 in cash and $400,000 in American Rare Earths shares in the initial stages of the scandium deal, with a further 5 million shares if a mining lease is issued.
The rare earths explorer says the Split Rocks agreement is consistent with its global objectives of creating a rare earths and scandium supply chain.