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Firetail Resources Limited (ASX: FTL) (“Company” or “Firetail”) is pleased to announce that it has executed a binding terms sheet (“Terms Sheet”) with Valor Resources Limited (ASX: VAL) (“Valor”) to acquire up to 80% of the issued share capital of Kiwanda S.A.C. (“Kiwanda”) in consideration for the Purchase Price (defined below) (“Acquisition”).
Highlights:
- Binding Terms Sheet executed for the acquisition of up to 80% of the issued share capital of Kiwanda, being a wholly owned subsidiary of Valor that holds the mining concessions comprising the Picha and Charaque Copper Projects in Peru (“Picha” and “Charaque”, together, the “Projects”).
- Picha is an exciting copper-silver project with multiple drill-ready targets to be tested in coming months.
- Firetail to receive the partial benefit of the Charaque farm-in deal recently executed by Valor with Barrick Gold Corporation (“Barrick”).
- Experienced in country management and technical team with proven track record.
- Valor Executive Chairman, George Bauk, to be appointed to the Board of the Company as a Non- Executive Director and Frank Beirlein is to resign from his current role as a Non-Executive Director of the Company upon completion of the Acquisition.
- The Company proposes to raise up to $5,000,000 in connection with the Acquisition to commence drilling and associated costs relating to the Projects.
Executive Chairman, Brett Grosvenor, commented:
“This acquisition has strategic importance to Firetail as it complements our existing assets and provides near term exposure to the copper market with drilling commencing in the short term with an experienced ‘ready to go’ team in Peru.
“The Picha Project is drill ready following a significant exploration program undertaken over the past 18 month which has identified large numbers of significant targets through surface work coupled with IP/Resistivity surveys.
“The structure of the deal is complementary to all parties involved and ensures that development of the assets is aligned with the Vendor and Company strategic directions whilst providing a cash neutral purchase position to FTL shareholders as we receive a portion of the Charaque farm-in payments over the next four years.
“Firetail, in conjunction with the Vendor and local Peruvian team will build upon relationships and partnerships in the region to deliver a portfolio of opportunities, as we commence drilling at Picha in the near future.
“I travelled to Peru with FTL Board Member Simon Lawson, and we were impressed by the Picha Project and the local team. Sampling and work to date is a clear reflection of the potential for a large-scale resource in an existing mining province. I am very excited about the future opportunities these assets will provide for FTL and its shareholders."
Plate 1: Firetail Resources Executive Chair, Brett Grosvenor, onsite at the Picha Copper Project in Peru
Projects
Kiwanda is a wholly owned Peruvian subsidiary of Valor and owns mining exploration concessions that are prospective for copper in Peru, South America comprising the Picha and Charaque Project (“Projects”).
Further details on the Projects are set out below.
Picha Project
The Picha Project is a copper-silver exploration project, located in the Moquegua and Puno Departments of southern Peru. The Project comprises 27 mining concessions covering an area of around 200km2 and is prospective for multiple styles of copper mineralisation including epithermal, stratabound, CRD and porphyry related. Picha is located approximately 17km east northeast of the San Gabriel Au-Cu-Ag Project, owned by Compania de Minas Buenaventura S.A.A. (“Buenaventura”), which hosts Reserves of 14.9 MT with 4.04 g/t Au and 6.43 g/t Ag, representing 1.94MOz Au; and resources: 24.86 MT with 2.10 g/t Au and 8.46 g/t Ag1.
Charaque Project
The Charaque Project is located 30km north-east of the Picha Copper Project and comprises eight claims covering an area of around 6,000 hectares (60km2). The area around Charaque is an active exploration area with major mining companies including Barrick, Teck Resources Ltd and Fresnillo Plc have significant landholdings around the project area. The Project lies along a regional northwest-southeast geological trend which encompasses several deposits, including the Arasi and Jessica Gold mines (owned by Aruntani), the El Cofre polymetallic mine (owned by CIEMSA), and several other prospects and historical mine workings (see Figure 1 below).
On 26 June 2023, Valor executed an earn-in agreement with Barrick covering the Charaque Project. Under the terms of the earn-in agreement, Barrick:
- has been granted a 5 year option to acquire a 70% interest in Charaque for cash payments totalling US$800,000 and US$3 million of exploration expenditure;
- during the first two years, guarantees a minimum exploration expenditure of US$500,000; and
- once it has acquired a 70% interest, can earn an additional 10% by exercising a second option with a US$1 million cash payment and the delivery of a sole-funded pre-feasibility study, taking its interest to 80%.
All future cash payments associated with the earn in agreement will be split between Valor and Firetail on a 50:50 basis.
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