Deep South Resources Inc has announced a definitive earn-in agreement with Word Class Minerals Venture Ltd (WCMV) to acquire up to 80% of three large exploration licences in the prolific Zambian copper belt - one of the globe's most prolific metals belts.
The company has paid US$15,000 to WCMV on signing and will pay a further US$15,000 on approval of the transaction by the TSX Venture Exchange (TSX-V).
Deep-South will also issue 500,000 of its shares to WCMV on approval of the exchange. On the second anniversary of the agreement, Deep-South will pay US$30,000 and issue 250,000 of its shares to WCMV.
"While reinstating the licence over the Haib copper project in Namibia remains our number one priority, we are very enthusiastic about the option to acquire these strategically well situated licences in the heart of one of the most prolific copper belts in the world," said John Akwenye, chairman of Deep-South, in a statement.
The Luanshya West project (LEL 23247) sits in the center of the Zambian Copper belt and covers 5,423.26 hectares (54.24 square kilometres) and an NI 43-101 technical qualifying report is currently under review by the TSX-V.
Airborne geophysical data in 2007 to 2009 was evaluated by the geophysical consultant K. P. Knupp and identified 11 targets for vein-hosted copper, lead, zinc, zinc, cobalt, nickel, silver and gold mineralisation and one target for stratiform copper-cobalt mineralisation.
READ: Deep-South Resources requests judge to render decision in review case with High Court of Namibia concerning Haib copper license refusal
The Chililabombwe project (LEL 23247) sits in the north of the Zambia Copper belt near the DRC border and covers 2,200 hectares (22.5 sq km) .
Thirdly, the Mpongwe project (LEL 23248) is situated in the center of the Zambian Copper belt and covers 67,500 hectares (675 sq km).
Under the agreement, before the end of the second anniversary, Deep-South will complete the collection and analysis of 100 soil samples over the identified anomalies on Licence LEL 23246 and 350 soil samples over the identified targets on each of Licences LEL 23247 and LEL 23248 before deciding whether to proceed with more intensive sampling or to evaluate any drilling targets. At that point, Deep-South will have acquired an undivided interest in 51% of the licences.
To buy the remaining 29% of the licences, Deep-South, at the end of the third, fourth and fifth year of the agreement, will pay to WCMV US$30,000 every year for a total of US$90,000 and spend a minimum of US$1 million in exploration programmes every year for a total of US$3 million in exploration expenditure.
Contact the author at giles@proactiveinvestors.com