THE BOURSE WHISPERER: Encounter Resources (ASX: ENR) has entered into an earn-in agreement in relation to two tenements at the company’s Yeneena project located in the Paterson Province of Western Australia.
The agreement is with Antofagasta Minerals Perth, a wholly-owned subsidiary of London Stock Exchange-listed Antofagasta PLC, one of the world’s largest copper producers and explorers.
The deal covers tenements E45/2658 and E45/2805, which cover an area of 433 square kilometres of the Yeneena project and will result in Encounter joining forces with the financial and technical resources of Antofagasta to advance the company’s BM1-BM7 copper discoveries.
Yeneena Project leasing, key structures and target areas. Source: Company announcement
“We are delighted to welcome Antofagasta, a subsidiary of one of the world’s largest copper producers and explorers, onto our share register and into an earn-in agreement over two tenements within the Yeneena project,” Encounter Resources managing director Will Robinson said in the company’s announcement to the Australian Securities Exchange.
“The transaction is a significant endorsement of the large scale copper potential at Yeneena.
“Antofagasta brings considerable financial, technical and operating resources to progress the exciting copper discoveries made by Encounter at BM1 and BM7.
“This relationship will ensure a fully funded exploration programme and if successful, provides a path towards production with a major copper producer.”
Under the terms of the agreement Antofagasta may earn a 51 per cent interest in the tenements by spending US$20 million over a five year period.
Encounter will maintain its 100 per cent interest in the majority of its ground holding at the Yeneena project (approx. 1,000sqkm) which includes the BM2 and T4 copper discoveries as well as a number of other untested targets it considers to be highly-prospective.
Encounter will continue to manage all exploration at Yeneena throughout the earn-in period including the tenements subject to the Antofagasta earn-in agreement.
Antofagasta will complete a private placement of 9.24 million shares at 21 cents per share that will inject $1.94 million (US$2 million) into Encounter.
Existing Encounter shareholders will have the opportunity to subscribe for additional shares at the same price as the Antofagasta placement through a Share Purchase Plan to eligible shareholders, which will be announced soon.
Encounter has commenced a 5,000 metre RC drill program at Yeneena and expects first assay results in May.