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[Ferro-Alloys.com]New Age Exploration's preliminary mineral processing review indicated that Redmoor is a coarse grained, simple to process ore with expected high recoveries and low processing costs.
Strategic Minerals PLC (LON:SML), the minerals production and development company, has provisionally agreed to take an interest in a tin/tungsten project in Cornwall.
It is to acquire a stake in NAE Resources (UK) Limited, otherwise known as Redmoor, from Aussie firm New Age Exploration Limited.
Strategic Minerals will initially acquire just under 31mln new Redmoor shares at £3.39 a share, giving it roughly a 9% stake, for a total cash outlay of £105k. It has an option to increase that stake to 50% by paying a further £945k.
Redmoor holds an exploration licence and option over 23km2 in the Cornish tin-tungsten-copper mining district in the UK.
The exploration licence provides the rights to explore over the entire licence area for a period of 15 years and the mining lease option provides the right for Redmoor to enter into a 25-year mining lease (renewable for a further 25 years) over any part of the licence area.
During the exploration licence period, a modest annual licence fee is payable to the vendor which reverts to a 3% net smelter return vendor royalty on mining commencement, Strategic Minerals said.
A review of historical data by an independent consultant indicated a JORC-compliant mineral resource of 13.3mln tonnes @ 0.37% tungsten equivalent, or WO3Eq, which is 0.56% in tin equivalent (SnEq) terms.
A number of high grade lodes were identified at Redmoor and a high grade sub-set of the above inferred mineral resource of 2.3Mt @ 0.80% WO3Eq (1.19% SnEq) was defined.
There was also identification of an additional high grade exploration target, of four to six million tonnes with an estimated grade of between 0.6% and 1.0% WO3Eq (0.9% to 1.5% SnEq).
Strategic Minerals added the caveat that the exploration target as defined by the consultant is “conceptual in nature” and there has not been enough exploration to define a mineral resource.
In the year ended 30 June 2015, Redmoor generated revenue of £2,100 and a loss before tax of £4,506. Redmoor had net liabilities of £69,256 as at 30 June 2015.
“As part of our strategy to add value through exploration in metals expected to have good price upside potential in the next three to five years, the company has identified the Redmoor tin/tungsten project as fitting our strategy and has been able to negotiate a structured farm-in approach that satisfies all parties,” said Strategic Minerals’ managing director, John Peters.
“Our partner in this endeavour, NAE, has undertaken considerable research on the licence areas and has progressed to the point where a proposed drilling programme, to demonstrate additional underlying resource potential, has been planned and awaits the company's review.”
Peters said Strategic Minerals’ involvement lies principally with injecting funds to undertake the drilling exercise that would most likely be conducted over the year after exercise of its option to increase its stake in Redmoor.
"The Cornwall area is an established tin/tungsten mining area and the company welcomes the opportunity to undertake a UK-based project, which could potentially result in a significant increase in Strategic Minerals' value if exploration success is achieved," Peters said.
Shares rose 5% to 0.32p on the news in the first hour of trading.
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