THE BOURSE WHISPERER: Caravel Minerals (ASX: CVV) has received a pat on the back from one of its main shareholders, First Quantum Minerals, in the form of a Farm-in Agreement for the company’s flagship Calingiri copper-molybdenum project in Western Australia.
Under the terms of the agreement, First Quantum has the right to contribute $3.6 million to ongoing exploration activities to earn a 50.1 per cent interest in the Calingiri project.
First Quantum Minerals is a global resources group with an impressive market cap in excess of $13billion.
The group currently operates seven mines producing copper, nickel, gold, zinc and platinum group metals from locations across Australia, Africa and Europe.
It also has five developmental projects located in Zambia, Peru and Panama, from which it expects to increase annual copper production capacity to more than 1.3 million tonnes per annum.
The Farm-In agreement is the third investment by First Quantum in Calingiri, which Caravel considers to be a demonstration of its confidence in the project’s potential.
“This is a tremendous vote of confidence in the quality and potential of the Calingiri project by one of the world’s most successful copper mine developers and producers of the past 15 years,” Caravel Minerals chief executive Marcel Hilmer said in the company’s announcement to the Australian Securities Exchange.
“The proceeds from the FIA will be used to execute the next phase of exploration activities at Calingiri that will significantly advance the project.
“Our recent successful drilling programs have already established Calingiri as potentially one of the largest bulk tonnage deposits for copper and molybdenum in Australia, with an endowment potential well in excess of 1.4 million tonnes of copper metal.
“Our focus now is to increase our exploration targets, establish JORC compliant resource for the project and to advance Calingiri towards a Scoping Study.
“With this additional funding injection, we will be well placed to move towards achieving these objectives.
“Caravel is looking forward to continuing its long and successful relationship with First Quantum Minerals.