Deep-South Resources Inc (TSX-V:DSM) reported it had closed a previously reported option deal with World 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.
WCMV has granted Deep South the exclusive right to acquire the stakes over five years following the execution of the option deal, which covers licences LEL 23246, LEL 23247 and LEL 23248.
The Luanshya West project, which sits on licence 23247 lie 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.
READ: Deep South Resources announces deal to buy up to 80% of three projects in world-renowned Zambian Copper belt
Airborne geophysical data in 2007 to 2009 was evaluated by the geophysical consultant KP 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.
Meanwhile, the Chililabombwe project, also on licence 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, on licence 23248, is situated in the center of the Zambian Copper belt and covers 67,500 hectares (675 sq km).
Deep-South will pay cash of US$150,000 to WCMV and issue 1.75 million shares. It must also spend US$3 million on work commitments.
The company has already paid US$30,000 and issued 500,000 shares.
As reported in April this year, 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 and upon completion of payments due in the second year, 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 programs every year for a total of US$3 million in exploration expenditure.
Deep-South's growth strategy is to focus on the exploration and development of quality assets in significant mineralized trends and near infrastructure in stable countries.
Contact the author at giles@proactiveinvestors.com