Carnavale Resources (ASX:CAV) has entered into an option to acquire 65% of the Essex copper tailings project in the historically copper-rich province of Milford, Utah.
The project contains tailings from a processing facility that extracted high grade copper, gold and silver from the early 1960’s to 1976.
Carnavale, through its Joint Venture Partner, Consolidated Copper & Metals Inc (CCM), will have the right to use a proprietary process for the extraction of copper, gold and silver.
Carnivale will deliver funding up to US$500,000 to earn an exclusive option to acquire 65% of the project, and will have 100 days from option election to raise US$7,000,000 should it decide to exercise.
This commitment amount is the estimated expenditure necessary to advance the Essex Project into production.
From first production, the company will be entitled to 80% of profits until the $7 million has been fully recovered, thereafter reverting to the 65/35 ratio.
The agreement also provides for an “area of influence” arrangement which could give the parties the potential to exploit other projects in this historically rich mineral province.
A capital raising to raise $900,000 through an underwritten non-renounceable entitlement issue and private placement is planned to satisfy the initial option cost.
The Essex Project consists of 72 acres of land and a 2 acre processing facility, directly in between Las Vegas and Salt Lake City, on private land close to water, electricity and sealed roads.
This is an interesting new development for Carnivale, potentially providing an ongoing source of positive cash flow to fund other exploration or acquisition activities.
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