Empire Resources increases sale price of Penny’s Find to $3m; focus on Yuinmery copper gold project

Empire Resources (ASX: ERL) has renegotiated a sale agreement for the Penny’s Find Gold Project, with the sale price for a 100% interest in the project increasing to $3 million from $2 million.

The agreement, with unlisted company Brimstone Resources, was originally formed in September 2010.

Penny’s Find has a JORC Resource of 314,000 tonnes averaging 5.2 grams per tonne (g/t) gold down to a vertical depth of 150 metres.

Under the new terms of the agreement, the sale consideration now comprises either:

- A total cash payment of $3 million by June 2013 for a 100% interest.

- A royalty payable on any gold produced in excess of 52,500.

OR

- Expenditure of $750,000 by September 30, 2012 to take up a 51% stake in the project.

- A commitment to drill 4 reverse circulation holes before the end of March 2012.

- An option to increase this stake to 75% by the expenditure of a further $750,000 by June 2013.

A non-refundable payment of $500,000 has already been made.

Under the second option, Empire’s costs would be carried and repayable from production.

The sale of Penny’s Find will allow Empire to focus on its core Yuinmery copper gold project in Western Australia.

Empire managing director David Sargeant said: “These changes to the agreement are positive for both parties. Brimstone will have additional time to devote to the project while Empire will benefit from either an extra $1 million for a total of $3 million in the event of a full sale or an additional 5% interest to 25% interest in the event of a partial sale.

“Exploration activities will now pick up with Brimstone drilling four new RC holes below the proposed pit in the current quarter in an area where we anticipate high gold grades.”

Deep, high grade copper at Yuinmery

Empire announced yesterday that drilling at the Yuinmery project had confirmed the continuation of high grade copper at depth.

Assays from two holes drilled to test depth extensions to previously outlined copper-gold-zinc mineralisation at the A Zone prospect returned an intersection of 3 metres at 4% copper, within a broader intersection of 6 metres at 3% copper.

Gold assays from the holes are pending.

Significantly, copper mineralisation appears to increase in grade with depth, and remains open down plunge.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24960/empire-resources-increases-sale-price-of-pennys-find-to-3m-focus-on-yuinmery-copper-gold-project-24960.html