Codrus Minerals (ASX:CDR) has executed a binding sale agreement with private investment organisation FMR Investments for the Silver Swan South Project in Western Australia.
Silver Swan is prospective for nickel, base metals, and gold mineralisation and sits 2km from FMR’s Gordon Sirdar gold mine, which hauls gold ore for processing to its Greenfields Mill in Coolgardie.
As part of the binding agreement, Codrus will divest the gold rights of Silver Swan while retaining the base metal rights, including nickel.
Codrus reports the agreement with FMR provides it with a key partner to explore for and potentially mine any gold discovery.
According to Codrus, the bolstered cash balance will underpin ongoing exploration activities at its key rare earth element (REE) and gold projects. Exploration activities include ongoing ground geophysics at the Karloning REE Project.
Codrus Minerals Managing Director Shannan Bamforth says the divestment of the gold rights is a ‘sensible’ and ‘logical’ rationalisation of Codrus’ portfolio.
“As an operating mining company with a gold mine situated close by, FMR is the logical partner for us to team up with to explore for and develop any gold discoveries at Silver Swan South.
The transaction crystallises $300,000 in cash to strengthen our treasury position to $1.9 million to underpin ongoing exploration activities, with Codrus also retaining exposure to future upside from production via a 2.5% NSR royalty. At the same time, Codrus retains the rights to explore for nickel and base metals at Silver Swan South.”
Codrus Minerals has secured a ‘significant’ landholding and is well positioned to capitalise on the increasing global demand for rare earths.
The company’s assets include the Karloning REE Projects in Western Australia’s Wheatbelt, as well as gold and copper projects in Western Australia and Oregon, US.
As of 30 December 2023, Codrus Minerals had $1.601 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Codrus Minerals