Argonaut increases stake in Lumwana West project

THE BOURSE WHISPERER: Argonaut Resources (ASX: ARE) has upped its ante in Zambia via its wholly-owned subsidiary, Lumwana West Resources, which has increased its shareholding in Mwombezhi Resources from 51 per cent to 90 per cent.

Mwombezhi Resources holds a 100 per cent interest in the Lumwana West copper project in Zambia.

Argonaut increased its ownership in the project after completing US$2.4 million in exploration expenditure under phase two of the underlying Lumwana West joint venture agreement.

The company also made the required payment of US$1.1 million to the initial Mwombezhi Resources shareholders.

Argonaut explained its 90 per cent shareholding facilitates a recently announced overlying option agreement the company struck with a wholly-owned subsidiary of global copper company Antofagasta PLC.

The agreement covers all phases of the project’s development from regional exploration to the completion of a feasibility study.

Should the project continue to develop and Argonaut elects not to fund its pro-rata share of construction expenses, it will be either carried into production or bought-out at the value of its interest.

“The acquisition of a 90 per cent interest in the Lumwana West project is a significant milestone for Argonaut,” Argonaut Resources director Lindsay Owler said in the company’s announcement to the Australian Securities Exchnage.

“The company has completed this earn-in well ahead of schedule despite tough market conditions.

“This reflects the company’s commitment to realising the value of Lumwana West.

“This rapid progress is a direct result of effective and well considered exploration which has defined the first major deposit as well as massive copper potential within the project area.

“Argonaut’s 90 per cent interest provides the headroom required for the new overlying earn-in by Antofagasta.

“The project is now fully funded and on a development timeline which, subject only to continued technical success, will see the project’s value increase exponentially.”