Centerra Gold elects new Swedish gold project
Erris Resources Plc / EPIC: ERIS.L / Market: AIM / Sector: Mining
17 January 2018
Erris Resources plc
("Erris" or the "Company")
Centerra Gold elects a new gold project: Brännberg, Sweden
Erris Resources plc, the European focused mineral exploration company with a portfolio of zinc prospects in Ireland and gold projects in Sweden, is pleased to announce that Canadian mid-tier mining company Centerra Gold (as defined below) has nominated the Company's Brännberg gold project in northern Sweden as an elected designated project area ("DPA") under its existing agreement with Erris (the "Centerra JV Agreement").
Overview
● Centerra Gold may invest US$1,000,000 in exploration funding over two years to earn a 51% interest
● Erris continues as operator of the six licences covering the 53 km2 of the Brännberg DPA
● Work programme planned to include surface till sampling, and geophysics in H1 2018 prior to a new diamond drilling campaign in H2 2018
Erris CEO, Merlin Marr-Johnson, said, "We are delighted that Centerra Gold has elected to earn-in to the Brännberg DPA under the terms of our strategic alliance with this US$1 million investment. It endorses our ability to generate high quality projects that are attractive to major mining companies, and is in-line with the Company's strategy to create shareholder value through early generative exploration and discovery.
"The new deal allows us to accelerate the work programme at this high priority gold project. Historic drilling at Brännberg returned several intersections of broad gold mineralisation from surface, and we look forward to testing the open targets along strike and at depth to determine the size of the mineralised system.
"With Centerra Gold now funding our generative gold exploration and three key projects in Sweden, Erris will see US$1,850,000 of exploration funding in 2018 on this portfolio and we have exposure to significant upside with no corporate dilution.
"Having been admitted to trading on AIM at the end of 2017 with a £4.0m fundraise supported by our 18.9% shareholder, Osisko Gold Royalties, we are looking forward to advancing our existing portfolio, whilst also identifying additional opportunities that have the potential to create shareholder value."
Brännberg Gold Project, Sweden
Erris entered into the Centerra JV Agreement with Centerra Gold KB Inc, a wholly owned subsidiary of Centerra Gold Inc. a TSX listed gold and copper producer ("Centerra Gold") in January 2016. Under the terms of the Centerra JV Agreement, Centerra Gold has the option to elect ("Election") to earn a 51% interest in a DPA by funding further exploration and development expenditures in the aggregate amount of US$1 million over a period of two years from the date of Election ("First Option Earn-In"), including US$400,000 on, or before the first anniversary of the Election, and US$600,000 on, or before the second anniversary of the Election. Such amount will include any previous funding relating to that DPA.
On 17 January 2018, Erris countersigned the new Election for the Brännberg DPA and it has been agreed by both parties to have an effective date of 1 January 2018. Erris will be the initial operator of the DPA and will be entitled to receive a management fee, comprising 10% of eligible expenses, which for the calendar year 2018 is expected to be $40,000.
Following the First Option Earn-In, Centerra Gold shall have the right to acquire an additional 19% (total 70%) by spending an additional US$2,000,000 on the project on, or before the second anniversary of the First Option Earn-In. Thereafter, Centerra Gold and Erris will contribute pro-rata to further exploration and development or be diluted as per a standard dilution formula. Should either party's interest be reduced to 10% or less, then such party's interest will automatically be converted to a 1.5% net smelter return royalty in the applicable DPA or joint venture company.
Brännberg lies 84 km west-northwest of Skellefteå and 28 km east of Malå in Västerbotten County Northern Sweden. The project area is accessible by a sealed public road and consists of lithologies formed in a marine volcanic-arc environment dominated by intermediate to felsic volcanics and volcaniclastics with overlying sediments, mainly greywackes.
Gold mineralisation at Brännberg was first documented in the 1990s by Scanex-Mirab Exploration in a joint-venture with Barrick. Beowulf Mining plc ("Beowulf") then took up the licences when they became available in 2003. Various phases of drilling were carried out, with many holes intersecting gold mineralisation.
There has been a total of 1,660m of drilling in 21 holes and most holes have encountered mineralisation. Most of the drilling was undertaken between 2004 and 2007. The drilling outlined a northwest-trending mineralised zone over a distance of 800m, which is open along strike and at depth. The zone is coincident with an IP chargeability anomaly.
Erris plans to carry out a short exploration programme to augment the existing data set at Brännberg prior to instigating a new diamond drilling campaign. It is too early to define the nature and the extent of that diamond drilling campaign although Erris does not consider it unreasonable to justify a programme to drill deeper on the areas of known mineralisation and also to extend drilling further to the south where the inferred structure is thought to lie. Drilling will better test the structural corridor that appears to be associated with mineralisation. The Brännberg work programme includes:
● Continued mapping, float sampling and prospecting, especially on the central structural corridor;
● Surface till sampling;
● Revision of existing core and submission of samples for assay; and
● Remote sensing data acquisition and interpretation.
The technical information in this announcement has been compiled on behalf of Erris by Aiden Lavelle. Aiden Lavell (BSc (Hons), MSc, MIGI, P.Geo ) is Erris' chief operating officer. Mr Lavelle has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking to qualify as a Competent Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies, which outlines standards of disclosure for mineral projects. Mr Lavelle consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
*ENDS*
For further information, visit www.errisresources.com or contact:
|
Merlin Marr-Johnson |
Erris Resources plc |
+44 (0) 7803 712 280 |
|
David Hart/Liz Kirchner |
Allenby Capital (Nominated Adviser) |
+44 (0) 20 3328 5656 |
|
Damon Heath /Erik Woolgar |
Shard Capital (Joint Broker) |
+44 (0) 20 7186 9952 |
|
Andy Thacker |
Turner Pope Investments (TPI) Ltd (Joint Broker) |
+44 (0) 20 3621 4120 |
|
Isabel de Salis/Gaby Jenner |
St Brides Partners (Financial PR) |
+44 (0) 20 7236 1177 |
Notes
Erris Resources plc (EPIC: ERIS.L) is an AIM quoted, European focussed, discovery driven exploration company. Supported by Canadian mining majors, Osisko Gold Royalties, which has a 18.9% interest in the Company, and Centerra Gold KB Inc, a wholly owned subsidiary of TSX listed Centerra Gold Inc., the Company has an established portfolio of zinc assets in Ireland and gold projects in Sweden, which it is looking to further build on. Led by a highly qualified team with extensive corporate and sector experience, Erris' strategy is to create shareholder value through commercial discovery of base or precious metal assets in proven mineral districts and in favourable European jurisdictions.
This information is provided by RNS
Latest directors dealings
- 2 hours ago Frasers Group
- 2 hours ago Cavendish Financial
- 2 hours ago Diaceutics
- 2 hours ago AB Dynamics
- 15 hours ago Johnson Matthey