Antofagasta commits to Encounter Resources’ Yaneena project

THE DRILL SERGEANT: Encounter Resources (ASX: ENR) has kicked off the New Year in style with conformation from one of the world’s largest copper producers, Antofagasta, that it will be continuing the Yeneena earn-in agreement into a second year.

“Following a series of positive exploration results in the first year of the earn-in agreement we are delighted that Antofagasta has extended into the second year,” Encounter Resources managing director Will Robinson said in the company’s announcement to the Australian Securities Exchange.

“We look forward to working with Antofagasta in escalating exploration activity in 2014.”

Encounter signed the earn-in agreement in April last year with a wholly owned subsidiary of Antofagasta.

Under that agreement, Antofagasta may earn a 51 per cent interest in two tenements within the Yeneena project by incurring expenditures of US$20 million over a five year period.

 

Yeneena project leasing and targets areas. Source: Company announcement

Encounter is, no doubt, happy to hear Antofagasta intends continuing the earn-in agreement at Yeneena into the second year.

Antofagasta is required to spend a minimum of US$4 million in the second year to maintain the earn-in.

The second year of the earn-in commences in April 2014 and Encounter indicated the majority of the year-two expenditure will be completed in the upcoming field season during April to November.
 
In the first year of the earn-in agreement Antofagasta is funding a US$3 million exploration program at Yeneena.

Exploration programs carried out so far under the earn-in agreement have basically tripled the footprint of the regolith copper anomaly at BM7.

They have also achieved the highest grade primary copper sulphide intersection at the project.

Encounter explained the continuation of the Antofagasta earn-in ensures a highly active and fully funded exploration program of diamond, RC and aircore drilling in 2014.

Exploration at Yeneena will recommence following the completion of the summer cyclone season, which is generally around March/April.

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