White Rock Collaborates with Sandfire on Red Mountain

- July 10th, 2018

White Rock Minerals and Sandfire Resources have formed a strategic relationship for both companies to get the most out of White Rock’s Red Mountain project in central Alaska.

White Rock Minerals (ASX:WRM) has entered into a strategic relationship with Sandfire Resources (ASX:SFR), specifically regarding White Rock’s Red Mountain zinc project in Alaska.

Through the relationship, White Rock will “benefit from Sandfire’s significant technical expertise” in developing the Red Mountain project. It also includes a AU$2.5 million equity placement, which upon completion will give Sandfire approximately 14.2-percent ownership in White Rock. The proceeds will go towards exploration activities at Red Mountain and general working capital purposes.

“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 VMS Red Mountain project,” White Rock managing director and CEO Matt Gill said in a statement.

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The partnership also provides the option for Sandfire to enter into an earn-in joint-venture (JV) agreement with regards to Red Mountain, where the first stage of the process would entail the company funding AU$20 million over four years to earn 51 percent in the project.

Following that, Sandfire would have to fund an additional AU$10 million and provide a pre-feasibility study over an additional two years to earn 70 percent. Stages 3 and 4 would depend on White Rock’s decision to contribute to the JV; if the company chooses against it, Sandfire can earn 80 or 90 percent in the project, respectively.

Located in the Bonnifield mining district of central Alaska, Red Mountain’s tenement package spans 143km2. The project’s high grade inferred mineral resource sits at 9.1 million tonnes at 12.9 percent zinc equivalent at a 3 percent cut-off, which was estimated in April 2017. Red Mountain also hosts base and precious metal content with estimated resources of 286,000t of lead, 53.5 million ounces of silver and 352,000 ounces of gold.

Both companies closed higher at the end of trading on the ASX on Tuesday (July 10), with Sandfire growing 0.44 percent to AU$9.20 and White Rock boosting 10 percent to AU$0.011.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

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