Zeus Resources (ASX:ZEU) to acquire Diaguili copper gold project in Mauritania
Zeus Resources has entered into a definitive share sale agreement to acquire up to 100% of Sab Metals Mauritania SARL, the holder of exploration permit 2475B2 covering the Diaguili copper gold project in the Guidimaka region of southern Mauritania.
The project is fully permitted for drilling and has a documented exploration history extending back to the late 1960s, including 49 recorded drill holes.
Highlights
Acquisition of up to 100% of Sab Metals Mauritania SARL through a staged transaction over 24 months.
Total consideration of US$2.0m, comprising US$1.0m cash and US$1.0m in Zeus shares.
Historical drilling previously reported intercepts including 22.25m @ 2.10% Cu from 48m, including 11.25m @ 3.36% Cu.
Historical drilling comprises 49 recorded holes, with the great majority terminated within 100m of surface.
Reprocessing and 3D inversion of the 2008 VTEM data are underway ahead of a proposed drilling programme.
Firm commitments received for an A$2.0m placement at A$0.006 per share, before costs.
The Diaguili project is located approximately 750km south east of Nouakchott, approximately 36km from Selibaby and approximately 6.5km north east of Diaguili village.
Mineralisation outcrops along Colline Nord and Colline Sud, each approximately 300m to 400m long and standing up to approximately 20m above the surrounding plain.
The surrounding plain is covered by alluvial and aeolian material, which the company says has limited the effectiveness of historical surface geochemistry and left substantial parts of the permit effectively untested.
According to the announcement, the project lies within the Mauritanides orogenic belt, which hosts the operating Guelb Moghrein copper gold mine.
The reported geology comprises chlorite schist, micaschist, prasinite, carbonate, quartzite and jasperoid with serpentinite lenses, while historical drilling recorded pyrite, chalcopyrite, bornite and chalcocite within the mineralised sequence.
The company states that geological features identified at the project are consistent with, but do not confirm, an iron oxide copper gold origin, and that the deposit model remains unconfirmed.
Historical exploration at Diaguili was undertaken by BRGM, General Gold International, BHP Minerals, Shield Mining and Gryphon Minerals.
Historical drill intersections referred to in the announcement include 35m @ 1.44% Cu from 1m, including 20m @ 2.10% Cu, 33m @ 1.43% Cu from surface, including 21m @ 2.02% Cu, and 6m @ 2.83% Cu and 1.4g/t Au from 106.7m, ending in mineralisation.
These exploration results were previously reported by Gryphon Minerals on 12 December 2014.
Zeus states that it is not reporting new exploration results, has not independently validated the historical exploration results and is not to be regarded as reporting, adopting or endorsing them.
The company also notes that original drill chips, core and assay certificates are no longer available, the historical results have not been reported in accordance with the JORC Code 2012, and no Mineral Resource, Ore Reserve or Exploration Target has been defined for the project.
The announcement also outlines historical airborne geophysical work completed in 2008, with a VTEM conductor spatially coincident with the Diaguili mineralisation.
Zeus has commissioned reprocessing and 3D inversion of the historical survey data through an independent geophysical consultancy to define the geometry of the conductor and identify drill targets.
The company states that the historical VTEM dataset has not been independently authenticated and remains preliminary.
Subject to completion of the acquisition, funding and the seasonal access constraints described in the announcement, Zeus proposes a staged work programme comprising reprocessing and 3D inversion of the VTEM data, followed by RC and diamond drilling directed firstly at confirming the historically reported mineralised zones and subsequently at testing the conductor at depth and along strike.
The indicative programme also includes structural and geological mapping, trenching, ground geophysical surveys, air core drilling and geochemical sampling.
Under the terms of the transaction, First Completion would provide Zeus with a 51% interest in Sab Metals, with subsequent stages increasing ownership to 70%, 90% and ultimately 100% over 24 months.
First Completion remains subject to completion or waiver of the conditions precedent contained in the Share Sale Agreement, including due diligence, shareholder approval for the issue of consideration shares and the required Mauritanian regulatory approvals.
Separately, the company has received firm commitments for an A$2.0m placement, before costs, to fund the acquisition and the proposed work programme.