Argonaut signs on Antofagasta at Lumwana West

THE BOURSE WHISPERER: Argonaut Resources (ASX: ARE) has executed an option agreement with a wholly-owned subsidiary of global copper giant Antofagasta PLC for the exploration and development of the company’s Lumwana West project in Zambia.

 

The Domes Region in North Western Zambia showing the Lumwana West
licence, 2014 drill targets and surrounding mines. Source: Company
announcement

 

The deal means the Lumwana West project is fully funded to production with Antofagasta able to earn 70 per cent by spending US$18.9 million on exploration plus the amount required to complete a feasibility study to international standards.

If the project is feasible, Argonaut can be either carried into production or bought-out prior to construction.

Antofagasta is to become a cornerstone shareholder in Argonaut via a US$1.1 million placement, with funds to be used to increase Argonaut’s interest in the Lumwana West project to 90 per cent.

Argonaut explained the agreement covers all phases of the project’s development from regional exploration to the completion of a feasibility study and, in the event the project is moved forward and Argonaut decides not to fund its pro-rata share of the project, it will be either carried into production or be bought-out at the value of its interest.

“The implications of this agreement are considerable,” Argonaut Resources director Lindsay Owler said in the company’s announcement to the Australian S3ecurities Exchange.

“The Lumwana West project is now fully funded with a timetable for development.

“Project funding provided via the agreement together with recently announced capital raising programs sees Argonaut’s capital requirements met.”

Owler said the company anticipates major exploration work will commence at Lumwana West in May 2014.

“This work will include diamond-core drilling targeting extensions and repetitions of the Nyungu deposit plus discovery phase drilling at the West Mwombezhi and Kavipopo prospects,” he said.

“The tenor of these targets, the scarcity of emerging copper mines and the global decrease in exploration activity makes this work internationally significant.”

Email: adelaide@argonautresources.com

Website: www.argonautresources.com