Sunrise Resources PLC (AIM:SRES) said it granted a unit of Tolsa SA, the world's largest producer of sepiolite, an exclusive six-month option to buy its wholly owned Pioche sepiolite project in the US for US$1.25mln (£1.02mln) in cash.
Tolsa, a privately owned specialist clay mining and processing company, may extend the option on the Nevada-based project for a further 12 months for US$50,000.
Sunrise will retain a 3% net revenue royalty for a 25-year period from the start of commercial production. A nominal advance royalty of US$50,000 per year will be paid to Sunrise if production is not started within five years.
The largest market globally for sepiolite is for use in cat and pet litters. It is also used in industrial absorbents, chemicals and animal feedstuffs and can be found in paints, medicines, pharmaceuticals and cosmetics.
“There are very few commercial sepiolite deposits in the world and whilst the Pioche project is at an early stage we are expecting Tolsa to move quickly with its evaluation following the signing of this agreement,” said Sunrise executive chairman Patrick Cheetham.
“There is a large market that can be targeted in North America that is currently served by alternative clays or imported sepiolite.”
In addition to the Pioche project, Sunrise’s royalty portfolio includes the Stonewall and Garfield projects, the Junction gold-silver project and the Jacksons Wash project.
“We also hold a portfolio of 100% owned industrial mineral and precious metal projects and continue to seek valorisation of these assets whilst maintaining our focus on pozzolan and perlite," added Cheetham.
Sunrise is seeking to develop the CS pozzolan-perlite project, also in Nevada.