Europa Metals has signed a letter of intent for an option and joint-venture arrangement over the Toral project in Spain with Canadian group Denarius Metals.
Through the agreement, Denarius will have the right to acquire up to an 80% ownership interest in Toral in two stages.
Initially, Denarius can take a 51% stake by spending US$4mln over three years including completion of a PFS, drilling and also acquiring the nearby Antonina concessions to expand the project.
Stage 2 will see Denarius take a further 29% interest by completing a PFS for the enlarged project including Antonina making a cash payment of US$2m to Europa Metals,
Myles Campion, executive chairman and acting CEO of Europa Metals said: "The board has for some time been evaluating a range of options to advance the Toral Project towards development in a manner that minimises dilution for the company's shareholders as far as possible whilst also providing exposure to the significant future value inherent in the project.
“This proposed investment by Denarius is a significant step forward in the advancement of not only Toral, but also our ambition to secure potential further concessions in the surrounding region.
Serafino Iacono, executive chairman and CEO of Denarius, added: “The high-grade concentrates that could be produced at Toral in the future make this a unique opportunity for Denarius to seek to develop a high-quality base metal project in the heart of western Europe.”
Shares rose 42% to 4.15p.