Australian mineral exploration company Belararox (ASX:BRX) has executed a binding agreement to acquire privately held Fomo Ventures No 1, which holds the Toro-Malambo-Tambo Base Metals and Copper-Gold Project (TMT Project) in Argentina.
As part of the agreement, Belararox has paid Fomo US$75,000 following execution of the binding agreement, and US$25,000 as an exclusivity fee following execution of the non-binding agreement. At settlement of the acquisition Belararox has agreement to pay Fomo 2.5 million shares and 1 million options exercisable at $0.95 which expire on 6 June 2024.
The company will also issue 10.5 million performance shares in 3 stages, with 2.5 million performance shares to be issued within 2 years after the issue of an approved drilling permit from the San Juan Mines Department, and achieving a drilling intersection of at least 30m @ 1% zinc equivalent (Zn-Eq)
The second stage will consist of 4 million performance shares being issued within 3 years after the issue of an approved drilling permit, and upon achieving a JORC compliant inferred resource of 25 million tonnes or more than 1% Zn-Eq @ 0.80% Zn-Eq cut-off.
The third stage will see another 4 million performance shares issued within 4 years after the issue of an approved drilling permit, and upon achieving a JORC compliant inferred resource of at least 50 million tonnes or over 0.5% copper-gold equivalent @ 0.30% Cu-Au-Eq cut-off.
The agreement also stipulates a 1% net smelter royalty (NSR) on all minerals extracted and recovered from the tenements will be paid to Fomo. Belararox will have the right to buy-back the royalty at any time in 2 stages, with the first stage consisting 50% of the royalty for US$2 million, and the remaining 50% for US$5 million.
Settlement of the acquisition is subject to conditions precedent including the company obtaining shareholder approval to issue the consideration shares, options, performance shares, and the shares to be used pursuant to the services.
Other conditions include confirming the transfer and registration at the Ministry of Mining in the Province of San Juan, confirming Fomo is the majority shareholder in GWK, and the minority legal holder of GWK shares agreeing to transfer its shares to an individual nominated by the company.
Another condition is Belararox entering into a service agreement with Condor Prospecting and geologist Jason Ward to provide exploration management and marketing services relating to the exploration and mining of ore from the tenements.
Both parties will also execute a royalty agreement to govern the terms of the royalty. If these conditions are not satisfied or waived by 31 May 2023, the binding agreement will be terminated.
Settlement of the acquisition will occur 7 business days after the satisfaction or waiver of the conditions precedent. Subject to settlement occurring, Belararox will procure that Fomo and GWK will incur a minimum of $1 million in exploration and expenditure on the tenements per annum for 3 years following settlement.
Commenting on the agreement, Belararox Managing Director Arvind Misra says: “Our due diligence has identified historic core drill results undertaken at the southern end of the TMT Project. These finds add further credence to our belief that this asset, located in a region known to be mineral rich, is highly prospective for zinc, an in-demand clean energy metal used in processes to reduce carbon emissions.
“We will continue to progress our Toro-Malambo-Tambo acquisition process over the coming weeks with the aim of closing the transaction soon after obtaining shareholder approval”
We will continue to progress our Toro-Malambo-Tambo acquisition process over the coming weeks with the aim of closing the transaction soon after obtaining shareholder approval. Once this work is done, the on-the-ground team we have assembled with Condor to undertake exploration activities in Argentina will get to work.
For now, we look forward to further updating the market on the process and exploration activities over the coming weeks.”
Belararox reports the Toro target in the south of the TMT project was the focus of historical exploration activities completed by unlisted companies Sonoma Resources Development Argentina from 1995 to 1999, and Votorantim Metals Argentina from 2012 to 2014.
The company inspected drill cores from diamond holes ARRLSDD00001, ARRLSDD00002, ARRLSDD00003, and ARRLSDD00004 with logistical and onsite support provided by the Condor Prospecting SA exploration team. Mineralisation observed in the due diligence process ‘strongly’ supports the potential for the project to contain a ‘significant’ system rich in base and precious metals.
‘Significant’ results recorded in historic drilling include ARRLSDD00001 with 266m @ 0.76% Zn, 14.6 parts per million (ppm) silver (Ag), 0.05ppm gold (Au), and 0.09% lead (Pb) from 56m.
Belararox reports several environmental impact assessments (EIA) have been submitted and the remainder of EIAs are being finalised for submission. The company also plans to upgrade the existing access track to the Toro target then progressively establish access to the Malambo and Tambo targets, along with refitting camp facilities and existing dome structures at the Toro target base camp, and expanding infrastructure to support planned exploration activities.
The company also says surface mapping and sampling, a magnetic survey, and an induced polarisation (IP) survey are proposed for the Malambo and Tambo targets. Diamond drilling at the Toro target to twin existing holes and extend mineralisation, as well as inaugural diamond drilling at Malambo is also planned.
Belararox is an Australian mineral explorer focused on securing and developing resources to meet the surge in demand from the technology, battery, and renewable energy markets. The company’s portfolio includes the Belara Project in New South Wales, and the Bullabulling Project in Western Australia.
Images: Belararox Ltd & iStock
