Royalco Resources looks at East African projects

Melbourne-based Royalco Resources has executed Memoranda of Understanding (MoU) with two, geotechnically qualified Ethiopian entities, over two separate project areas approximately 450 kilometres north of the capital city of Addis Ababa.

The MoUs signal the company’s initial foray into acquiring gold and base metal exploration leases within Ethiopia.

The company has flagged these to potentially be the first of what could be a number of East African transactions.

The first of the MoUs signed is for an Exploration Licence covering what is known as the Sarkaysa project, which the company said is, “highly prospective for gold and base metals”.

Royalco can earn a 60% interest in the tenement for the expenditure of US$1 million.

Initial exploration at Sarkaysa will entail soil sampling and geophysical interpretation to be completed over coming months with a view to drilling identified targets by the last quarter this year.

The second MoU, signed with a separate local Ethiopian entity, encompasses the Kilaj project, located in the same region as Sarkaysa.

Targets include both precious and base metals with Royalco earning an 80 % interest in the project area for an expenditure of US$750,000.

Proposed exploration activities at Kilaj will again encompass soil sampling and geophysics.

“Ethiopia has recently enacted mining legislation, including fiscal obligations, considered to be globally competitive,” Royalco said in an announcement.

“Other mining groups active in the country include BHP Billiton (potash), AngloGold (precious metals), Nyota (precious metals), as well as a handful of Canadian and UK junior exploration groups focussing on either potash or precious metals.”
Royalco’s expects it exploration to involve a blend of advanced and grass roots prospects where access is straight forward with selected targets offering a higher risk-higher reward outcome in a short time frame.

Both the Sarkaysa and Kilaj projects fall into the grass roots category.

Royalco is currently in negotiations regarding additional projects in Ethiopia as well as in countries nearby.