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Ferrum's bargain hunt turns up option deal in Spain

Ferrum has signed an option agreement to acquire GoldQuest, which owns two lead-zinc exploration projects in the provinces of Leόn and Galicia - two historic Spanish mining areas.
Ferrum's bargain hunt turns up option deal in Spain
Keep on trucking: Ferrum is looking for new opportunities.

Ferrum Crescent (LON:FCR) freely admits it is using depressed valuations in the mining sector to identify potential bargains.

A case in point is GoldQuest Iberica, owned by a private Swiss firm called TH Crestgate.

Ferrum has signed an option agreement to acquire GoldQuest, which owns two lead-zinc exploration projects in the provinces of Leόn and Galicia - two historic Spanish mining areas.

The option, which runs to the end of July, comes at a cost of up to £22,500.

If the Ferrum team, led by Tom Revy, likes what it sees then it will stump up £465,000 paid mainly in cash, although there is a paper element to the deal.

The company recently found a partner for the Moonlight iron ore project in South Africa’s Limpopo Province that will help develop Ferrum’s main asset.

So the group is on the look-out for new opportunities.

“The board is seeking to take advantage of the prevailing deep trough in asset prices to acquire additional low-cost assets in an attractive sector and region to augment the group's asset portfolio and provide the opportunity to create shareholder value over the medium and longer term,” said Managing director Revy.

"In our view, the fundamentals for lead-zinc are extremely attractive, despite the generally depressed global commodity markets.

“Therefore, we have secured the option over these attractive assets, which have historically had significant exploration work performed on them and are located in a stable, mining-friendly region.

“For a relatively small outlay, we believe that a focused work programme including geological and metallurgical reinterpretation, could significantly progress these Iberian exploration projects towards development readiness and diversify our project risk whilst we continue to progress our flagship Moonlight Project."

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