Ortac Resources (LON:OTC) has unveiled a strategic tie-up with a private exploration firm, which has a portfolio of “very prospective” high grade copper and gold projects in Eritrea.
The mining firm has struck a subscription agreement with Andiamo Exploration to acquire up to 26.75% of the firm by subscribing for shares in three equal tranches for US$1.5mln.
The deal includes an option to acquire a further 10 million shares for US$2.0mln for a total interest of up to 42.2% in Andiamo, it said.
Andiamo holds the 252 sq km Haykota exploration licence in Eritrea, which is 50 km south west of the producing Bisha Mine, which is a high-grade volcanogenic massive sulphide deposit and one of the highest grade open pit copper mines in the world.
The funds will be used to kick off a drill programme in the first quarter of this year at the recently discovered high grade copper mineralisation at the Yacob Dewar deposit, where 63 metres of mineralisation from surface has been intersected – at an average grade of 2.4% copper.
A second drill programme is set to begin later in the quarter to target the high grade oxide gold VMS occurrence at Yacob Dewar, in a bid to expand the deposit along the known 800 metre strike, where recent drilling has returned intercepts including 9m a 22.5g/t of gold.
Ortac will provide full support to deliver assessments for a mining licence application by Andiamo by June 30, 2015, it said.
Ortac’s chief executive Vassilios Carellas said the investment into Andiamo was the result of an exhaustive process of project reviews.
“Andiamo has, in our view, a stand out portfolio of very prospective high-grade copper and gold exploration projects, which will broaden our portfolio and deliver an additional margin of investment safety for our shareholders, as we continue to progress our proven Šturec gold project in Slovakia.
“We now look forward to working closely with the Andiamo team to unlock near term value from these exciting Eritrean projects”.
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