Krakatoa Resources (ASX:KTA) has entered into a binding term sheet with JSC Caucasas Minerals to acquire 80% of the Zopkhito Antimony-Gold Project in the Racha region of Georgia.
Zopkhito, which covers 1,779 hectares, contains an estimated 225,000 tonnes of antimony at a grade of 11.6%, representing 26,000 contained tonnes, and 7.1 million tonnes of gold at 3.7 grams per tonne, representing 815,119 ounces.
Krakatoa says there are 27km of previous exploration adits — or tunnels — that have defined antimony and gold mineralisation. To date, 16 out of more than 60 mineralised veins within the project have been investigated, which the company says provides substantial exploration upside.
The company intends to continue collating and quantifying historical data, and will evaluate the area covering the resource estimate, while also preparing for the exploration field season early next year.
During the initial 12-month option period, Krakatoa will work on increasing the confidence in the geological model and geochemical database to a JORC 2012 standard.
Krakatoa says this will comprise additional surface mapping, geochemical sampling, adit sampling, drilling from adits or surface, surface geophysical and airborne geophysical surveys. The company will also look to evaluate the processing solutions for antimony and gold.
Under the “transformational” agreement, Krakatoa will pay an initial US$100,000 ($156,430) option fee, as well as an additional US$100,000 if the company chooses to extend the option period for another 12 months.
At any time during the option period, Krakatoa can acquire the 80% interest by paying US$7 million. The company must also undertake financial and legal due diligence, and allocate a minimum of US$2 million to exploration and mine development studies.
Subject to shareholder approval, JSC may elect to take 50% of the acquisition consideration in Krakatoa shares at $0.01 each, up to the amount of 532 million shares.
In addition, Krakatoa has agreed to pay a facilitation fee of 20 million shares and 20 million options at $0.05, which can be exercised within two years.
To fund the acquisition and exploration activities at Zopkhito, Krakatoa is conducting a placement to raise $1.28 million. Participants can purchase shares at $0.01 each, which represents a 10% discount to the last traded price of $0.011.
Krakatoa Resources is a diversified mineral explorer focused on exploring, developing, and acquiring projects considered prospective for rare earths, gold, copper, and lithium.
Write to Aaliyah Rogan at Mining.com.au
Images: Krakatoa Resources
