Variscan Limited (ASX:VAR) is heading back to Europe with the acquisition of two zinc projects in Spain.
The projects - Novales-Udias and Guajaraz - sit in established mining jurisdictions and complement the existing portfolio of base metals interests in France and Chile.
They represent an opportunity to acquire two of the most prospective zinc projects in Europe, said Stewart Dickson, chief executive.
Both projects are centred around former producing mines in proven mining areas, while Novales is also close to Glencore’s zinc smelter at Asturias.
Mining tenement rights have already been granted, Dickson added.
Slipstream Resources is the vendor and will receive shares in Variscan as its consideration for the two licences.
An issue of A$2.2mln worth of shares at A$0.002 per each will form the initial payment.
A similar amount will be issued once a JORC compliant resource has been delineated.
To fund its work programme, Variscan is raising A$3mln also in two tranches with an over-allotment option of up A$1mln.
Of this, the first tranche of A$0.6mln has already been subscribed by a European investment fund and a family office.
Dickson told Proactive that the Spanish assets are two potentially very high-quality projects, while Slipstream has a track record of acquiring assets and growing with partners such as Variscan.
As a mine, Novales-Udias was quite unique he says and historically ran on high grades of zinc contained within “ore bags”.
Multiple widths of between 20-30m at bonanza zinc grades of between 18-35% were intersected.
The aim is to use modern mining and exploration techniques to find more of these to get production going quickly.
Mississippi-Valley (MVT) zinc-lead deposits of the type found at Novales rarely occur in isolation and are generally found in clusters, says Dickson.
“The simple mineralogy typically makes them straight forward to process and at the lower end of the cost curve.”
At Guajaraz, the pace will be more measured as it is at an earlier stage of development with mapping planned to firm up drill targets.
Slipstream had already identified six target areas with 'excellent potential for zinc dominated polymetallic mineralisation'.
“We were looking for base metals in the right geographies in the right places with the right infrastructure and Spain ticks a lot of those boxes,” added Dickson.