-- adds broker comment, share price --
Bezant Resources (LON:BZT) shot higher as it unveiled a move into Colombia with an option over 2,750 hectares of alluvial platinum and gold licences.
According to house broker Sanlam, the deal is game–changing and made the more significant by chairman Ed Nealon’s involvement. He founded Aquarius Platinum and Sylvania Resources.
Sanlam adds that alluvial mining can be started on a small scale, which suits the current mine finance climate where development capital is scarce and with around £1.7mln at its last year end Bezant has sufficient cash to complete the deal.
Initially, Bezant will pay US$50,000 for the option and provide vendor Leeward a US$350,000 loan facility.
If it goes ahead it will pay a further US$2mln, split between cash and shares, by the end of 2015.
Leeward’s licences are in the Choco district of Colombia.
Operations in the area have traditionally involved dredging and Bezant believes that even though platinum prices are currently depressed, it can make good margins.
Nealon said: "I have spent considerable time assessing these attractive project licences over the course of the last few months and believe that the licence areas afford the opportunity to yield significant future value.
“Near surface platinum assets such as these in Colombia should be capable of yielding real future cash flow following the successful application of modern mining development practices."
Bernard Olivier, Bezant’s chief executive, added that problems at its Mankayan copper-gold project in the Philippines had also encouraged it to look elsewhere.
Mankayan has been affected by possible tax law changes in the Philippines and its significant capex requirement, which has affected talks over either a sale or joint venture.
“We believe that securing the Leeward Option will allow us to potentially unlock a valuable development cycle in future platinum mining." Olivier added.
Shares climbed 25% to 2.67p.