Liontown Resources (ASX: LTR) has secured a new copper-zinc project in northern Tanzania after entering option agreements to acquire a contiguous ground package known as the Ibaga Project.
Rock chip samples by Liontown have returned up to 39.2% copper, 45.8% zinc, and 136g/t silver, with other results of 34.6% copper, 15% copper and 11.3% zinc.
The project incorporates 34 tenements held by three independent owners, and represents a valuable addition to Liontown's exploration portfolio in Tanzania.
Notably, there has been no previous drilling or modern exploration within the Ibaga Project area.
Mineralisation is hosted by at least two trending, steeply dipping, massive sulphide horizons up to 4 metres thick which have been exposed in small, 20-40 metre deep open pits being mined by local operators.
The distribution of workings currently mined by local groups indicates a main zone with a minimum strike length of 300 metres and a hanging wall zone of open length.
Following acquisition of geophysical and geochemical data, Liontown intends to undertake a reverse circulation drill program in mid-2014 to test for immediate strike and depth extensions of the mineralisation exposed in the pits.
Consideration payments, assuming all options are exercised, include an initial fee of US$230,000 payable after satisfaction, and annual payments of US$125,000 on the first anniversary reducing to $15,000 by the 5th year.
A maximum of US$2.7million with option periods ranging between two and five years will be paid by Liontown, as well as various royalties ranging up to a 1% gross royalty in addition to the statutory government royalty of 4%.
Liontown is capitalised at about $10 million, and drilling below rock chips of 39% copper and 45% zinc is bound to attract some market interest.
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