Aruma Resources (ASX:AAJ) is expanding its exploration portfolio with the addition of a copper and uranium project in the well-known Olympic Dam precinct of South Australia and two copper projects in Queensland’s fertile Mt Isa region.
The junior explorer has inked a share acquisition agreement with NHM Holdings for the Wilan Iron Oxide-Copper-Gold (IOCG) and Uranium Project in South Australia and the Bortala and Fiery Creek copper projects in Queensland.
The news edged shares up over 31% to an intra-day high of $0.025 this morning (27 May).
To settle the acquisition, Aruma will issue 26.5 million shares and 24.5 million options. The options will be exercisable at no cost to NHM once Aruma reports a drill intercept of 3m at over 600 parts per million (ppm) uranium, or at least 20m at over 0.8% copper or metals equivalent at one of the new projects.
Aruma will also pay a 2% net smelter royalty to NHM shareholders over any minerals extracted and sold from the tenements.
Managing Director Glenn Grayson says Aruma assessed a number of projects against key criteria designed to drive market support for the company and value accretion for shareholders.
“We see the combination of a quality exploration asset portfolio in high-demand commodities, located in active tier-one mineral belts in progressive mining jurisdictions as the clear right-fit for Aruma Resources,” he says.
The 1,993km2 Wilan Project is situated on the eastern side of South Australia’s Gawler Craton, which plays host to BHP’s Olympic Dam Mine – the fourth largest copper deposit globally and one of the largest known single deposits of uranium in the world.
The Wilan Project is also located immediately south of Copper Search’s Paradise Dam prospect. Aruma says the main basement structures hosted within Paradise Dam continue onto the Wilan ground.
Meanwhile, the Bortala and Fiery Creek Projects are located in the northern area of the Mt Isa copper belt, which hosts several major copper mines and where global mining heavyweights like Rio Tinto (ASX:RIO), Anglo American and Teck are active.
Aruma has completed due diligence over the projects, but the acquisitions are still subject to shareholder approval.
Up to now, Aruma – which has a market capitalisation of $3.7 million – has been focused on lithium and gold.
“The company views the ability to acquire this IOCG, uranium and copper prospective asset portfolio at a time of prevailing strength in these commodity markets underpinned by a bullish long term outlook as being potentially transformational,” Grayson says.
The copper price is up more than 20% since the start of this year to US$10,324 ($15,569) per tonne on the London Metal Exchange. Last week it edged very close to the US$11,000-per-tonne mark, as mine closures create greater supply constraints and demand for the red metal in energy transition continues to rise.
This has prompted industry watchers like Macquarie to revise their copper price predictions upwards.
Meanwhile, the uranium price is up over 67% over the past year to US$91.65 per pound, according to Trading Economics. This has been helped along by several factors, including the United States’ ban on Russian uranium imports.
Once the acquisition is approved by shareholders, Aruma plans to undertake targeted field work, including detailed gravity surveys, to define priority targets for first-phase drilling.
Write to Angela East at Mining.com.au
Images: Aruma Resources & iStock
