Sandfire buys into Alaska project

Sandfire Resources has entered into a strategic relationship with Victoria-based White Rock Minerals, which includes a $2.5 million equity investment and an option to earn-in to the junior explorer’s Red Mountain zinc project in Alaska.

Under the share placement, White Rock has issued 208 million shares at 1.2 cents each to give Sandfire a 14.2 per cent stake in the company.

The proceeds from the investment will be used to progress exploration at the Red Mountain project.

The agreement also includes an earn-in option for Sandfire, which would entail a capital expenditure of up to $30 million over the next six years to gain up to 90 per cent of the project.

Under the first stage of the deal, Sandfire would fund $20 million over four years to earn a 51 per cent interest, with a minimum spend of $6 million in the first year.

Sandfire would invest a further $10 million under the second stage of the agreement and deliver a pre-feasibility study over a two-year period to take a 70 per cent stake in the project.

Sandfire will end up with either an 80 or 90 per cent share of the project, depending on whether White Rock decides to contribute to the joint venture in the final stages of the deal.

The strategic relationship also includes a technical collaboration agreement, which entails the formation of a technical committee for the Red Mountain project.

White Rock managing director Matthew Gill welcomed Sandfire as a strategic partner.

“Securing a high-quality partner with world leading expertise in the exploration and development of base metals projects is a strong endorsement to the quality and potential of White Rock’s globally significant high-grade zinc Red Mountain Project,” he said.

“White Rock looks forward to collaborating with Sandfire Resources as part of this new strategic relationship.”

Shares in Sandfire were up 0.33 per cent at $9.19 each at 3.20pm AEDT, while White Rock shares were up 20 per cent at 1.2 cents each.