Inca and South32’s Riqueza Earn in Officially a Go

After months of crossing t’s and dotting i’s, Inca Minerals (ASX:ICG) and South32 (ASX:S32,OTC Pink:SOUHY) have executed an earn-in agreement (EIA) for Inca’s Riqueza zinc-silver–lead asset.

The agreement was first announced just less than a year ago when South32 agreed to help fund a geophysical survey for Riqueza, located in Peru. Since then, the companies have worked out the finer details, including South32 providing US$9 million in exploration funding over four years.

As part of the earn in, all of Riqueza’s concessions will be transferred from Inca to its new, wholly owned subsidiary Brillandino Minerales. South32 has the option to acquire a 60 percent equity interest in Brillandino through its US$9 million funding contribution.

The company can earn an extra 10 percent interest by providing all additional project fees necessary to complete a prefeasibility study. However, Inca is to remain the operator of Riqueza unless South32 opts to take over after fulfilling its exploration funding obligations.

“I would like to thank all those involved in the EIA negotiations. Our shared objective of identifying porphyry and skarn mineralization at Riqueza can now begin,” Inca Managing Director Ross Brown said in a statement.

“I also thank Inca’s shareholders for their patience and understanding of the process. We may all now share in the potential rewards of an exploration program commensurate with the Inca-South32 partnership.”

Going forward, the companies plan to send their respective exploration teams to Riqueza in May as the start of the earn-in agreement now gives Inca access to South32’s exploration funding. The work will begin with remote sensing and an “extensive” geochemical survey with an initial focus on northeast priority targets.

While a maiden resource has yet to be established at Riqueza, work like the geophysics report completed in October 2018 has given the company faith in the asset’s potential. The work at Riqueza uncovered that a large- to giant-sized carbonate replacement deposit could be present within Yanacolipa, one of the project’s three large target centers.

Located in Peru’s Miocene porphyry-skarn mineral belt, the project is said to be highly prospective for porphyry and porphyry-related mineralization.

At the end of trading on the ASX on Monday (April 1), South32’s share price remained relatively unchanged, up 0.54 percent to AU$3.75. However, Inca’s share price jumped 25 percent to close at AU$0.005.

As of March 29, zinc was trading at US$2,999 per tonne on the London Metal Exchange.

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