Sandfire Resources is expanding its North American presence with plans to work with White Rock Minerals to explore and develop the multi-commodity Red Mountain project in central Alaska, United States.
The companies have signed a $30 million earn-in and joint venture option agreement that will allow Sandfire to farm-in to White Rock’s interests at Red Mountain, a high-grade zinc and precious metals project.
Sandfire’s farm-in opportunity will focus on Red Mountain’s zinc-rich mineralisation at the Dry Creek and West Tundra deposits and the newly-discovered Hunter prospect.
Perth-based Sandfire can earn a 70 per cent stake in Red Mountain by spending $30 million on exploration and delivering a pre-feasibility study (PFS) with an ore reserve within a six-year period.
In stage one, Sandfire can earn 51 per cent of Red Mountain by spending $20 million on exploration over four years, including $6 million in the first year.
Sandfire can increase its interest in Red Mountain to 70 per cent during stage two by funding a further $10 million and delivering the pre-feasibility study within the following two years.
If Sandfire reaches this point, White Rock can contribute its percentage share of funds towards a definitive feasibility study (DFS) in stage three to retain a 30 per cent interest.
The companies would launch a development phase towards production in stage four following approval of the DFS by the project management committee.
White Rock managing director Matt Gill said the agreement was significant as it provided a funding pathway to advance Red Mountain through exploration to the point of advanced development studies.
“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 (volcanogenic massive sulphide) Red Mountain project,” Gill said.
Gill said the prospectivity of Red Mountain was “well illustrated” by last year’s field season activities that included drill hole results and the discovery of new sulphide mineralisation at the Hunter prospect.
“The 2019 field season promises more exciting results with plans for a modern airborne EM survey, ahead of a 24-man field camp being established with surface crews completing mapping, geochem sampling, CSAMT geophysics and drilling,” Gill said.
White Rock returned drill hole results in excess of 17 per cent zinc, 6 per cent lead, 1000 grams a tonne silver, six grams a tonne gold and 1.5 per cent copper from last year’s field season at Red Mountain.
The project includes a 475 square kilometre tenement package covering numerous historic VMS prospects with little modern exploration.
Red Mountain could become Sandfire’s next major venture in North America. The company is also advancing the Black Butte copper project in Montana, United States through its American subsidiary.